“Corporate South Africa has R600 billion in property assets,” says  Sibongile Bapela, the OMIGPI executive heading the division. “Our aim is to help business and government make the most of those assets. There is a corporate mindset that says owning property assets is the right way. But there are other options which can relieve pressure on balance sheets, align corporate strategy with best deployment of assets, ensure tenure of space and reduce risk associated with ownership.”

She says increasing shareholder activism is likely to focus pressure on investment returns and the impact of property assets on these returns. 

“For some businesses, this may mean offloading property assets to restructure balance sheets. For others, shrinking or closing a division, or changing business focus may mean a need for alternative space, or a development to suit the strategy and productivity requirements. “

Bapela says transport costs and travelling time for staff are becoming increasingly important in location and space assessment.

“Businesses need to carefully consider all aspects of any proposed relocation and its impact on productivity. The division recently researched a relocation proposed by a people-intensive business from what it perceived to be an expensive office park to a more decentralised address.  The research showed relocation would mean a loss in productivity through longer travelling times for most staff who would also be paying more to get to work.

“Our aim is to understand client strategy and requirements and to co-create property solutions. “

She says offloading property assets does not mean necessarily mean a business will lose the long-term benefits of property investment.

“Where appropriate, investments in unitised funds, such as the Triangle suite established by OMIGPI, can tap into the performance of direct property and provide predictable and growing income streams. “

Bapela says governments are increasingly adopting public private partnerships as a recognition that they are best positioned to focus on governing a country and the private sector is best positioned to maximise value for money in the provision of certain facilities and services. 

“An example is the new Pretoria head office for the Department of Education in what is South Africa‘s first public private partnership  based on the National Treasury’s standardised provisions for PPPs.

The  PPP agreement with the department  for the design, construction, finance, operation and maintenance of the head office was concluded by a company in which OMIGPI is a shareholder.

“In South Africa, PPP projects are also providing a strong tool for government to encourage BEE participation in large property and infrastructure projects. “