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Pre-close Operational Update
BALWIN PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/028851/06
Share code: BWN ISIN: ZAE000209532
(“Balwin” or “the Company”)
Pre-close Operational Update
This operational update is based on the five months to 31 July 2017.
- Despite South Africa experiencing a recession and severe trading conditions, Balwin has
continued to receive strong demand for its high quality apartments with pricing and sales
volumes tracking in line with the previous comparable period.
- Costs during the period have increased as a result of gearing up of resources for the
delivery of the increased pipeline, including Waterfall. The creation of a procurement
department which centralises the procurement process has however resulted in significant
efficiencies and cost savings in the business.
Encouragingly, the recent interest rate cut should support a traditionally stronger second
half performance.
- As announced on SENS on 21 August 2017, Balwin and Transcend have signed a
memorandum of understanding for a strategic alliance with the intention to bring to market
up to 8,900 quality affordable rental apartments across five developments in key Gauteng
nodes over the next six years.
Regional Overview
Johannesburg
- There are six developments currently under construction in Johannesburg.
- Amsterdam (Olivedale) is progressing well with sales of an average of 20 apartments per
month being achieved. All delays on the development had been resolved in the prior
period, and registrations have occurred in line with hand overs within the current period.
- Sales at Westlake (Modderfontein) are performing in line with targets reaching between
20-25 apartments per month. The development is progressing well with no delays being
experienced.
- The Cambridge (Bryanston) and Malakite (Greenstone) for which construction is
complete, are mostly sold out with the developments expecting to be fully sold out by the
end of the calendar year. Construction of these developments had been completed.
- The Reid (Linbro Park) is currently being zoned to specification and is expected to be
launched in the 2019 financial year.
- Balboa Park (Oakdene) is progressing well with an average of 20 sales being achieved
per month. The development is expected to be sold out within the 2018 financial year.
Construction of the development had been completed.
- Delays have occurred in the construction of The Whisken (Kyalami) due to the regulatory
approval process. Management is focused on resolving the delay in a timely manner and
through engagement with the council.
- Waterfall
o The Polo Fields (Waterfall) has been exceptionally successful during the period
under review with sales in excess of 350 apartments having been achieved to
date. The regulatory approval process is on track with proclamation having been
obtained. The first phase of the development was handed over to residents
during June and the second phase is scheduled for hand over during the end of
August.
o Kikuyu (Waterfall) has also been highly successful with over 200 sales being
achieved to date. The first three phases of the development are scheduled to be
handed over within the 2018 financial year. Proclamation is expected to be
obtained in September/October 2017.
o Due to the success of the developments launched at Waterfall, Balwin will soon
be launching a new development in Waterfall Fields (Tambuki). The development
will be launched before the end of the 2018 financial year but for which the first
phase hand over is planned for the 2019 financial year. Proclamation of Tambuki
is expected to be received in November 2017.
- The Green Park (1200 apartments) (Boksburg), Green Lee (Formerly The Clulee) (1712
apartments) (Linbro Park) and Green Hill (2500 apartments) (Kempton Park)
developments have been earmarked for the Balwin Transcend strategic alliance. Subject
to the requisite approvals, Green Park, comprising of approximately 1,200 apartments, is
the first development earmarked for this alliance. Located in Boksburg, the first phase of
144 apartments is expected to be delivered to Transcend in early 2018. Green Hill is
expected to commence construction in late 2018 and to be handed over by the end of the
2019 financial year.
Pretoria
- There is one development under construction in Pretoria.
- The Blyde (Pretoria East) is the first development in Sub-Saharan Africa to feature a
Crystal Lagoon. Construction of the lagoon is in progress and it is expected to be
completed in early 2018. Greater than 100 apartments were sold to date at The Blyde.
Management believes that further interest in the development will be received once the
Lagoon is constructed and is operational.
- Green Creek (Pretoria East) and Green Wood (Pretoria East), which each comprise of
approximately 1500 apartments are situated adjacent to The Blyde and have been
earmarked for the strategic alliance with Transcend. Both Green Creek and Green Wood
is part of the larger River Walk estate. Construction in Green Wood is expected to
commence in the 2019 financial year and the first phase to be handed over by the end of
the 2019 financial year.
Western Cape
- Balwin is continuing to grow in the Western Cape and currently has four developments
under construction in the region.
- The Jade (Somerset West) (Previously The Boulevard) and De Zicht (Plattekloof) were
launched for sales during the period. The regulatory process is on track with phase one
of both developments expected to be handed over within the 2018 financial year. ‘
- Sales at The Sandown has been progressing well with sales of between 25-30
apartments being achieved per month.
- The Paardevlei developments which comprise of Paardevlei Square, Crescent Houses,
Duplexes and Assisted Living remain on track. The first phase of Paardevlei Square was
registered during the period.
- The Paarl land is currently being zoned to the specification and is expected to launch in
the 2020 financial year.
- Management is continuously seeking opportunities to acquire land in the Western Cape
in order to expand Balwin’s presence in the geographical area. Balwin is in the process of
purchasing a new land parcel in Milnerton in order to ensure continuation of development
in the strong area, the development will comprise 900 apartments and the development
will be named “The Fynbos”.
KwaZulu-Natal
- As per the communicated strategy, Balwin has expanded into the KwaZulu-Natal region
having concluded the purchase of land in Ballito. Balwin’s new KZN regional office in
Umhlanga was accordingly opened during June 2017.
- The land acquired can accommodate approximately 3500 apartments. Ballito Hills (1600
apartments) is the first development to be constructed on the land acquired. The
development was launched for sales with exceptional interest being received. Sales of
over 100 apartments have been recorded to date. The first phase is to be handed over
during the 2019 financial year.
29 August 2017
Johannesburg
Sponsor
Investec Bank Limited
Date: 29/08/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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