Nearly half provincial government rental buildings standing empty — Mvoko
The Eastern Cape government is losing millions in rental revenue, because almost half, or 451, of the 1,069 properties managed by the Eastern Cape Development Corporation remain vacant and vulnerable to vandalism.
Across the province, the corporation manages 319 industrial units and 750 commercial units which are in the provincial government’s portfolio.
Responding to questions from the Bhisho legislature, economic development, environmental affairs and tourism MEC Mlungisi Mvoko recently revealed that 618 units were occupied and yielding rent for the province, while 451 units remained vacant and vulnerable to vandalism at the end of September.
That is a vacancy rate of more than 42%.
The provincial government is also struggling to collect rent from some of its tenants, with the occupants failing to pay more than R15m in the second quarter of this financial year, between July and September.
Commercial units provide rental space for small, medium and large commercial businesses, while the industrial units provide factory rental space for industrial tenants, with the province forking out more than R10m a month in operational costs.
Mvoko, replying to parliamentary questions from DA MPL Nqaba Bhanga, told the legislature that “reasons for vacancies vary from there being no demand, to [buildings] being in a condition where they cannot be occupied due to vandalism”.
He said vandalism had occurred mostly in the Dimbaza, Butterworth and Fort Jackson industrial parks, and included the removal of roof sheeting, side sheeting, fittings and in some cases the structural steel elements of the buildings.
Asked by Bhanga whether his department had any plans to refurbish any of these units, how much had been set aside for their refurbishment, and what criteria were used in deciding which ones to renovate, Mvoko said the corporation had developed a property refurbishment programme with a required budget of R546m.
“The first phase includes refurbishment of 32 commercial and industrial sites located in Mthatha, Butterworth, Buffalo City Metro and the Enoch Mgijima municipalities.
“A total of R208.9m will be allocated to these refurbishments.
These properties were identified for their high incomeearning potential, strategic locations with high visibility and in areas where demand for quality rental property is high,” he said.
However, Mvoko was cagey when Bhanga asked him to provide the legislature with a list of tenants that had defaulted on their rent payment, and the amount they owed to the provincial government.
“The ECDC has a commercial property management system that tracks rental performance per property per tenant.”
Bhanga said on Thursday that serious questions needed to be put to Mvoko after he refused to reveal details of tenants who owed his department millions in unpaid rent.
He also raised concerns about the high vacancy rate in some of these state properties.
He said his party would soon lodge a Promotion of Access to Information Act application to obtain the list of present and previous tenants occupying the corporation’s properties, as well as the current and historic debt, per tenant.