PLEASING PERFORMANCE Balwin Properties’ The Polo Fields, which was launched in February, reached more than 300 presales
Residential property developer Balwin Properties will soon announce details of the rental model that the group will use in Boksburg, Linbro Park, and Pretoria, in Gauteng.
Balwin Properties CEO Stephen Brookes noted during the developer’s results presentation in Johannesburg earlier this month that the developer had about 5 000 apartments that could be included in the rental model.
Green Park, in Boskburg is expected to be Balwin’s first rental development.
“[Balwin’s] business is good and we believe that the rental business will add a sparkle to it,” he said, but noted that the group’s build-to-sell model would remain its primary business.
The developer had achieved a solid financial performance in the year ended February 28, with headline earnings per share and earnings per share up by 7% to 141c.
The group’s profit for the period improved by 18% year-on-year to R661-million, while revenue rose 30% to R2.7-billion.
A final dividend of 31c was declared, which represents an 18% increase on the prior year.
“Balwin has produced excellent results despite the challenging macroenvironment characterised by political volatility, strict mortgage lending, rising consumer inflation, low household disposable income and lower-than-expected gross domestic product,” Brookes told Engineering News earlier this month, stressing that Balwin had delivered what was promised in the prelisting statement.
He added that the “excellent“ performance was underpinned by the company’s high-quality, affordable product offering, coupled with “exceptional project-cost management”.
“The fact that we operate in diverse locations across high-density urban nodes ensures the sustainability of our business and ability to create shareholder value,” he said.
Balwin had 13 developments under construction during the period and sold 2 711 apartments at an average selling price of R995 000 a unit. Solid demand for the apartments continued, with 1 283 apartments presold for the 2018 financial year.
The group has a secure pipeline of 33 786 apartments across 24 locations in the key target nodes of the Western Cape, such as Somerset West, and in Johannesburg and Pretoria, in Gauteng, with ten-year development horizons.
“Our developments continue to be in high demand. [Several] first-phase developments were launched during the review period and have had strong sales,” he said, adding that it was encouraging to see that the latest developments launched near year-end were also achieving record presales figures, despite economic uncertainty.
Balwin launched six new developments during the financial year, including Malakite and Amsterdam, in Johannesburg; Grove Lane and The Blyde, in Pretoria; The Sandown, in the Western Cape; and The Polo Fields, Balwin’s first development in Waterfall.
Brookes also noted that presales at the Westlake and The Sandown developments had been pleasing, reaching more than 25 and 30 apartments a month respectively.
All Balwin estates are built to a standard specification, comprising a unique Balwin design, standard finishes, no customer changes, and in not more than four-storey blocks, with 10 or 12 apartments comprising one-, two- and three-bedroom apartments per block. This enables the group to benefit from significant economies of scale.
Brookes added that demand for one-bedroom apartments was “exceptional”, provided the smaller apartments were well designed, constructed and finished.
Meanwhile, Balwin’s acquisitions during the financial year also included obtaining the development rights of the Waterfall properties, in Gauteng. The total value of the developments acquired amounted to R1.5-billion.
Kikuyu, Balwin’s first development in Waterfall Fields, reached more than 200 presales.
Further, The Polo Fields, which was launched in February, reached more than 300 presales. The first phase is expected to be handed over in August.
“The Waterfall node we see as an enormous attractive proposition going forward. It is a significant growth node, with the likes of major corporates establishing offices there,” noted Balwin CFO Jonathan Weltman.