Gauteng province on secret buying spree.

Posted On Friday, 25 April 2003 02:00 Published by eProp Commercial Property News
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The Gauteng provincial government is quietly buying properties in central Johannesburg. It appears to be assembling ownership of as many as five city blocks, an action that looks like the first phase of a multibillion-rand precinct development.

Property-Housing-ResidentialThe buying radiates from the Johannesburg city hall, which houses the Gauteng legislature. Government already occupies many buildings in the area and has some space in others.

A private consultant is overseeing the sales and sellers are committed to strict confidentiality. Gauteng is believed to have bought five properties from Sage and a few from a bank, but nobody will discuss the matter.

In combination, these acquisitions would give the Gauteng government a precinct stretching from the library to the old post office, and from Commissioner Street to Kerk Street - a recommendation, incidentally, made in 1994 by Neil Fraser of the Johannesburg Central Partnership when he led a successful campaign to get the provincial government to move from Pretoria.

The mystery is why officials are being so secretive. Private companies commonly use secret site assemblies to buy up a parcel of properties, in order to keep prices low before the owners are aware of the plans. The minute word gets out that an assembly is taking place, owners push their prices up, with the last few holdouts trying to win a king's ransom.

But government is empowered to expropriate the properties en masse, transparently and at the market price. One lawyer's opinion is that government is in fact obliged to expropriate, to prevent speculation and market distortion.

No Gauteng officials or politicians have been available to say why the properties are being bought. It could just be to secure the properties they already occupy or for future needs.

Even so, it will almost certainly prove to be a smart move whatever its motive, timed just as the inner city is beginning to revive after 15 years of decline. Property prices are still low, but are set to rise substantially over the next few years.

Fraser guesses that, if government is doing a major assembly, it may not have the funds to do the resulting development. A private-sector partner which would develop it would not be entitled to expropriate.

 

Last modified on Friday, 16 May 2014 10:58

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