Publications
Partners
- Residential estate developer Balwin has passed the R3bn revenue mark for the first time.
- The company handed almost 3 000 apartments to buyers in the year ended on 28 February.
- It's planning over 51 000 more in the next 15 to 20 years as it expands its more affordable brand.
After handing over almost 3 000 apartments, residential estate developer, Balwin Properties' revenues surpassed R3 billion for the first time in the company's 26-year history.
The company's revenue grew 16% to R3.1 billion in the financial year ended on 28 February from R2.7 billion in 2021.
"Breaking through the R3 billion revenue barrier for the first time is a huge achievement that we're very proud of. When I started this business 26 years ago with a 50-apartment development, I never imagined that we would achieve this milestone," said Balwin CEO, Steve Brookes.
Balwin's strategy is to develop large-scale residential estates in high-density nodes that are attracting middle-class and high-income earners. The company is currently developing about 3 000 apartments per year and its estates are more "lifestyle centres" than traditional apartment blocks, offering spas, restaurants, and gyms.
Balwin handed over 16% more apartments to buyers than a year earlier. The group has been selling 337 apartments month on average. This has recovered materially from 2020 when this fell to just 203 apartments a month.
51 000 apartments and 28 more developments in the pipeline
Balwin also pre-sold 2 386 apartments for future years and has another 51 803 in the development pipeline. Even though it looked like Balwin was no longer too convinced about the prospects of its industry when it cancelled the planned R1.6 billion affordable living Wedgewood development in Sandton last year, it is still planning 28 developments.
"A core focus for the team is the execution of the existing pipeline to unlock value. Considering that zoning in our main operational areas can take anything from five to seven years, strategic land acquisitions remain important, however, we will place greater emphasis on accelerating the unlocking of the existing pipeline going forward," added Brookes.
Balwin is pouring in billions of rands into these developments, which it has going simultaneously. In the financial year under review, the company increased developments under construction by R698.2 million to R4.8 billion to build and expand Izinga Eco Estate in KwaZulu-Natal, Thaba Eco Village in Gauteng, Mooikloof Mega City in Tshwane, and the Greenbay and The Huntsman developments in the Western Cape.
Balwin is planning to build almost 38 000 apartments in Gauteng over the next 18 years. It has already sold 1 205 of those. And its bias toward Gauteng is not surprising since the province remains Balwin's most significant contributor to regional revenue at 60%.
YOU MIGHT ALSO LIKE | Beach life coming to Joburg South as Balwin builds its third lagoon in Gauteng
Growing in new markets
But Balwin is increasingly spreading its footprint across SA's commercial triangle. It has planned more than 8 500 for KwaZulu Natal over the next 17 years. The Western Cape will get over 5 500 apartments in the next five years.
And the company has started targeting slightly lower-income consumers with its Green Collection developments with apartments starting from under R500 000. Even though Balwin's main source of revenue is still the middle-class focused Classic Collection, the Green Collection is growing noticeably. The Green Collection developments contributed 31% of all apartments handed over in 2022, increasing from 23% a year earlier.
"In line with the ongoing strategic focus of the group, there was an increased roll-out of the Green Collection developments in the year, a popular product due to the lower selling price," wrote Balwin in the financial results booklet.
The company has more Green Collection estates planned in its long-term development pipeline than the high-end Signature Collection it is rolling out in areas like The Waterfall, Umhlanga and Somerset West.
Get the biggest business stories emailed to you every weekday.
Go to the Fin24 front page.
