State property firm on the cards

Posted On Wednesday, 15 August 2001 03:01 Published by
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Parastatal will handle R120bn portfolio

Property-Housing

The public works department plans to establish a property management parastatal for its R120bn property portfolio.

This is part of the broad transformation of the department, says public works director-general Thami Sokutu.

High on its list of priorities is unlocking value in government-owned property, and the department is hoping the private sector can help, advising it on how to deal with its property portfolio.

Sokutu says setting up a governmentowned property management company will enable government to make appropriate decisions in its property business.

He says government does not have the required expertise in the property industry, and setting up the company, which will be done with the aid of consultants, will address this.

The parastatal will be formed by a team of people with deeper understanding of the property industry, he says.

The department will try to offer incentives in line with those of the private sector to draw the requisite skills.

Malcolm Felling, a director of property management company Domayne Property Solutions, says the establishment of a state-owned property management company could smooth private sector dealings with government.

He says business with government will be easier to handle with the help of people who have deeper understanding of the property industry. The company will have to draw appropriate skill and expertise to be effective. Felling is looking forward to such an establishment as there are huge opportunities to come from the public works department.

The move does not rule out suggestions that government should outsource all property management activities in the next five years and dispose of other properties, as the parastatal will oversee such activities, Sokutu says.

The department, considering tender bids to advise on its portfolio, is looking for a multidisciplinary team with backgrounds and experience in fixed-asset management, property finance structuring, property management, knowledge of asset management systems and general project management.

The team that wins the tender will have to review legislation and deal with policy development, and establish national guidelines, norms and procedures for fixed-asset management for government. The winning bidder will have to advise the department on the financial structuring, engineering, property and financial aspects of a pilot project involving 10 buildings.

The department says the successful bidder will have to devise an asset management plan that obtains quantifiable functional, economic and social returns from the state's property portfolio.

The tender has generated a lot of excitement in the property management industry as the job will be the largest single one the industry has seen.

The portfolio covers more than 100000 properties, including buildings and vacant land. The bulk of the properties are occupied by the SA National Defence Force and the police, justice and correctional services departments.

Last modified on Saturday, 08 March 2014 09:38

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