Failure to sign leases has cost the state R3bn over three years
Each year the state has lost R1bn because it has not signed a long-term rental framework which offered rentals at lower rates than it pays
The department of public works has cost itself and taxpayers R3bn since 2016 because it has been tardy in signing new leases, which would have been at lower rental rates and with longer terms. Chief investment officer at Bridge Fund Managers, Ian Anderson, said the government was leaking money unnecessarily. “The new leases would be at lower rentals and that would result in savings of approximately R1bn a year. These proposals have been on the table for some time now so government has paid a few billion rands of extra rental by not signing these leases timeously,” he said.
The department has been slow to sign more than 2,550 leases since 2016, only signing 40, Delta Property Fund said in a briefing to investors. Lower rentals Many landlords had signed leases with state tenants that had terms of at least 10 years, in the mid-2000s. In 2016, as a number of the leases were coming up for renewal, the landlords began to present new 7-10 year leases at lower rentals, given the larg...