Balwin Properties plans debut listing on JSE

INVESTORS will soon have another residential property offering to choose from when Balwin Properties, believed to be SA’s largest home builder, makes its debut on the JSE’s main board.

A successful listing, planned for mid-October, will bring the JSE’s tally of new real estate listings over the past 18 months to 11. There have been three new property listings so far this year: UK-focused mall owner New Frontier Properties; SA-based Lodestone; and Arrowhead spinoff IndluPlace Properties, the JSE’s first pure housing fund.

Other residential-focused listings include Visual International and Freedom Property Fund. Unlike IndluPlace, which is predominantly an income play, Visual International and Freedom are capital growth plays. The Balwin listing will offer a dividend, albeit at a relatively low yield of between 3.5% and 4% versus the average 6.5% from income-paying property stocks. Balwin plans to build a sizeable rental portfolio of R2bn- R3bn by 2020, in addition to its build-to-sell model.

Balwin is known for its largescale sectional title developments in high-growth areas across SA’s major cities.

The company was founded in 1996 by Stephen Brookes and has developed, marketed and sold more than 70 residential estates comprising about 13,500 individual units. The company’s apartments, priced from R600,000-R1.7m, are targeted at middle-income buyers and investors.

Mr Brookes, who is also CEO of Balwin, said yesterday the company expected to sell more than 1,600 units across developments this year and deliver after-tax profit of about R550m for the financial year ending February next year (excluding one-off listing costs).

He said a listing will grant Balwin access to the capital markets and support the company’s strong development pipeline and geographical expansion.

“The demand for new, smaller-sized, higher-density apartments and townhouses remains robust ... ”