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BALWIN PROPERTIES LIMITED - Pre-close Operational Update

Release Date: 29/08/2017 07:05
Code(s): BWN     PDF:  
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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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