Balwin Properties upbeat for growth as earnings double

ALISTAIR ANDERSON

NEWLY listed Balwin Properties, which focuses on sectional title residential estates in highdensity metropolitan nodes, doubled its headline earnings per share in the six months to August, as it benefited from strong demand for lock-up-andgo accommodation.

CEO Stephen Brookes said yesterday the listing last month on the JSE had also led to a boost in new sales and the group was set to continue its strong growth path. The group also grew its revenue 71% to R823m, while its net asset value rose 45%.

“We are very pleased with these results, produced at a time when we were gearing up towards our listing. It effectively underscores what we committed to deliver to the market in terms of leveraging our increased economies of scale, expansion into various strategic nodes and launching several first phase developments during the review period,” said Mr Brookes.

He said the market’s response to the company after it listed had been positive.

“Most first phases sold out within a couple of weeks from launching as we expanded into Pretoria for the first time. “We also launched new developments in Cape Town, Somerset West, Sandton, Randburg, Modderfontein and Oakdene, south of Johannesburg.”

Balwin builds residential estates with 500 to 1,000 units per complex.

These units have a price range of R600,000-R1.7m and target buyers in the mid to high living standards measures.

Balwin’s strategy is to reinvest 70% of after-tax profits back into the business and distribute the remaining 30% of profits to shareholders.

Mr Brookes said the company would weather difficult economic conditions next year as he expected it to benefit from homeowners downscaling from houses in the suburbs to sectional title estates.

Balwin is not a speculative builder as it constructs and sells its developments in several phases according to demand. This phased build-to-sell model has high barriers to entry and is easily scalable.

The company also plans to develop, retain and manage a rental portfolio of 2,000 to 3,000 units by 2020.

“Balwin has a strong track record where it executes its projects efficiently. Its pipeline is impressive and it is well- positioned in an attractive segment of SA’s residential market and is expected to continue its strong performance,” said Investec Asset Management portfolio manager Peter Clark.

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