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Balwin Properties debuts on the JSE main board at a Market cap of R5.2 billion

Stephen Brookes, CEO of Balwin Properties Limited & Aarti Takoordeen, CFO of the JSE Limited


Balwin Properties Limited, South Africa’s largest homebuilder focusing on large scale sectional-title residential estates in high-growth, high-density metropolitan nodes in South Africa’s major cities, this morning successfully made its debut on the main board of the Johannesburg Stock Exchange in the “Real estate holding and development” sector.

Balwin’s first trade opened at R11.00, giving it a sizeable market capitalisation of R5.2 billion.

Stephen Brookes, Chief Executive Officer and founder of Balwin said: “I am very excited about today’s listing! It marks the next chapter in our growth path and paves the way for us to accelerate our delivery of around 17 000 homes in the next 8 years. In addition, the capital raised through the listing will allow us to acquire and secure land for future development in order to maintain our development pipeline. To this end, we are currently in discussions to acquire an additional land parcel in the Kyalami node on which a further 15 000 sectional-title residential units could be developed.”

Balwin is differentiated from other JSE listed property entities or REITs as its business strategy is underpinned by the generation of profits through the development and sale of large-scale residential estates averaging between 500 and 1,000 units and offering secure, affordable, high-quality and environmentally friendly one, two and three bedroom apartments ranging in size from 45m2 to 120m2.

The Company will re-invest 70% of after tax profits back into the business to support superior NAV uplift and will distribute the remaining 30% of profits to shareholders, providing a strong projected immediate dividend yield of 3.5%.

Balwin’s attractive investment proposition is backed by a robust, proven, business model and strong market fundamentals to deliver sustainable returns for investors.

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. In addition, the Company plans to develop, retain and manage a rental portfolio of 2,000 to 3,000 units by 2020, generating up to R3 billion in revenue.

As the market leaders in sectional title estate development, Balwin is on track to sell over 1,600 units this year and deliver an after tax profit of around R550 million for the financial year to 29 February 2016.

“We are very proud to have developed various iconic residential estates in recognised middle-to-high income, high-density and high-growth residential nodes. The numerous international awards we’ve received for these developments is a sure sign of the passion we have and our commitment to remain at the top end of international trends.

A lot of hard work went into building our business and today is an opportunity to recognise the dedication and perseverance of our management team, staff, partners and family.

“I would also like to welcome our new shareholders to Balwin. I look forward to your continued support as we accelerate our growth plans and deliver on an exciting pipeline,” Brookes concluded.

On 9 October 2015 Balwin announced that it successfully placed 178,238,798 shares with invited investors at R9.88 per share, being at the upper end of the pricing range. A total of R1.76 billion was raised in the significantly over-subscribed offer. Investec Bank Limited acted as the corporate advisor, bookrunner and sponsor for the offer.