JSE-listed Balwin Properties has concluded an agreement to buy, from Tongaat Hulett Development, Portion 3 & 4 of Erf 3465 Umhlanga Rocks; Portion 6 of ERF 3465 Umhlanga Rocks; the remainder of Erf 3434 Umhlanga Rocks; and the remainder of Erf 3465 and 3457 Umhlanga Rocks, measuring 64 ha in extent, for R167.26-million.
The properties are situated within the Izinga Precinct north of Umhlanga Ridge and above the town of Umhlanga Rocks, and is close to the commercial hub of Umhlanga.
A portion of the properties is zoned and will be serviced for immediate construction of 335 residential apartments.
Balwin intends to obtain rights for a minimum of 1 286 residential apartments which will be built on the remainder of the properties and all phases will be linked into one development.
Balwin has been negotiating with Tongaat since 2018 to acquire the properties which are the last remaining significant portion of developable land with an Umhlanga address.
The acquisition is aligned with the strategic objectives highlighted in Balwin’s 2019 Integrated Annual Report to expand its development operations in KwaZulu-Natal.
The purchase consideration will be funded from a combination of existing cash reserves and new bank debt. The bank debt will be ring-fenced to the development to be completed on the properties being acquired.
Subsequent to the new bank debt being obtained, Balwin’s total debt to equity ratio will remain within the 50% target threshold as mandated by the board.