Balwin Properties, the JSE’s only national large-scale developer of turnkey sectional-title apartments and surrounding infrastructure aimed at the mid- to upper market segment, today reported strong financial growth for the interim financial period ending 31 August 2018.
“Despite tough economic conditions and an increase in the VAT rate, we reported strong growth during the period. This was mainly as a result of continued demand for our unique product and lifestyle offering.“Our continuous development approach, nodal diversification and ability to respond to market demands supported this remarkable growth.”
A total of 1 058 units were handed over and recognised as revenue during the period, translating into a 33% growth in revenue to R1.19 billion. The average selling price per unit remained consistent at R1 125 488 (2017: R1 218 089.)
Due to the flexibility of the block configuration, management can easily, and cost effectively respond to market demand and conditions, increasing the number of apartments from between 10 and 14 units per block. During the period, new design one-bathroom, two-bedroom units and two-bedroom, two-bathroom units were introduced in a more competitive price bracket without impacting the Company’s overall gross profit margin.
“Our model of continuous development means we remain active across numerous sites, rotating artisanal skills as we progress with the different phases of each development,” explains Brookes.
The Company targets sales of approximately 30 to 35 apartments per location per month across developments in Gauteng, the Western Cape and KwaZulu-Natal, retaining pricing tension.
“With challenging market conditions prevailing, cost management and improved efficiencies are key focal areas for us,” said Brookes.
The Company indicated that it has engaged with strategic partners to explore the unlocking of annuity income opportunities such as renewable solar energy and fibre infrastructure.
At the same time Balwin is developing a rent-to-buy product, where it will secure lease agreements for these apartments before selling them to a strategic partner.
These apartments – to be developed in phases based on demand – will have a distinctive architecture but will retain the quality and innovativeness Balwin is known for. The rent-to-buy model could further act as a catalyst for the accelerated development of Balwin’s land bank.
“We expect that our strong performance will continue in the medium term, based on consistent demand for our unique offering and the early stages of most of our current developments.
“We continuously investigate opportunities to enhance our offering, adding to the lifestyle experience of our customers, such as with Crystal Lagoons at The Blyde development,” Brookes concluded.
Post the reporting period, on 8 September 2018, Balwin launched The Blyde, a R4.2 billion residential development in Pretoria East which includes of the first clear-water lagoon in sub-Saharan Africa. At 1.5 hectares – slightly larger than two rugby fields – the lagoon provides a beach setting for residents. Demand has been exceptional with phases one to four sold out and pre-sales remaining strong on the back of the unique lifestyle concept piloted by Balwin.
The Company’s innovation and attention to quality have been recognised internationally at the Africa & Arabia Property Awards where Balwin was awarded with two awards in the categories of “Apartment, for South Africa” for its Paardevlei Square development in Somerset West, Western Cape and the five star “Leisure Interior” award for The Polo Fields club house, Waterfall, Johannesburg. Polo Fields club house will now compete in London for the honours of best “Leisure Interior” in the world.