Unlocking Land Wealth in South Africa: Why Leasehold Development is the Smart Choice for Landowners
- Warren Brusse
- Dec 4, 2024
- 3 min read
Updated: Jun 29
By Warren Brusse, Chief Executive Officer, Zebinvest Real Estate Development
Introduction
In South Africa, land is more than a financial asset, it is a legacy, a symbol of identity, and a pathway to long-term empowerment. For traditional leaders, private landowners, institutional landowners, and community trusts alike, the question is how to unlock value from land without losing control.
Leasehold development offers a powerful solution. This model allows landowners to enter into long-term partnerships with developers - driving income, jobs, and infrastructure while retaining ownership of their land. With rising demand for housing, retail hubs, commercial hubs, and logistics corridors, leasehold is increasingly being used as a tool for wealth creation, transformation, and sustainable development.
1. Retain Ownership, Build Legacy
Under a leasehold arrangement, landowners grant developers the right to use and improve their land for a defined period, typically 99 years, while ownership remains in their hands.
This is especially important in the South African context, where:
Customary and communal land rights are tied to identity and tradition.
Generational wealth and land restitution are key to redress and equity.
Family trusts, community property associations (CPAs), and traditional councils seek development without dispossession.
2. Generate Long-Term, Inflation-Proof Income
Leasehold allows landowners to earn passive income through:
Annuity rentals (indexed to inflation or market value).
Upfront premiums or signing bonuses.
Revenue sharing or profit participation.
In a volatile economic environment, this provides stable and predictable cash flow - a critical asset for families, communities, traditional authorities, and institutions managing land for public benefit.
3. De-risk Development with Expert Partners
Many landowners lack the capital or technical expertise to develop land on their own. Leasehold enables partnerships with experienced and best-of-breed developers who fund and manage the entire project from approvals to construction while the landowner shares in the benefits.
Well-structured deals can include:
Reversion of all improvements at the end of the lease.
Employment and enterprise development targets for local communities.
Joint venture or profit-sharing mechanisms for equity participation.
4. Unlock the Value of Underutilised Land
Large portions of South Africa’s land especially rural, peri-urban, and restitution land are sitting idle due to a lack of investment. Leasehold transforms these into income-generating and job-creating assets without the need to sell.
Ideal sectors include:
Residential housing (including RDP, affordable, and GAP).
Retail and mixed-use developments in township and peri-urban nodes.
Agri-processing, logistics, and renewable energy projects in rural areas.
5. Support Empowerment, Land Reform and Sustainability
Leasehold fits seamlessly into South Africa’s transformation goals. It enables:
Broad-Based Black Economic Empowerment (B-BBEE) participation.
Community benefit models for land reform beneficiaries.
Sustainable land use aligned with municipal IDPs and SPLUMA frameworks.
It empowers landowners to shape how land is used, ensuring alignment with social, environmental, and economic goals.
Conclusion
For South African landowners, leasehold development represents more than a business model, it’s a bridge between tradition and transformation. It allows landowners to unlock the full value of their land, create generational wealth, and drive development without surrendering ownership.
Whether you are a traditional authority, private landowner, or community trust, or traditional leader, now is the time to explore leasehold as a strategy to develop wisely and preserve your land for generations to come.
Warren Brusse, Chief Executive Officer, Zebinvest Real Estate Development
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