Acquisition of prime property in Umhlanga Rocks Balwin Properties Limited (Incorporated in the Republic of South Africa) Registration Number: 2003/028851/06 Share code: BWN ISIN: ZAE000209532 (“Balwin”) ACQUISITION OF PRIME PROPERTY IN UMHLANGA ROCKS 1. INTRODUCTION Shareholders are hereby advised that Balwin has concluded a Sale Agreement (the “Agreement”), with Tongaat Hulett Development Proprietary Limited (the “Seller”) in terms of which Balwin has agreed to purchase Portion 3 & 4 of Erf 3465 Umhlanga Rocks; Portion 6 of ERF 3465 Umhlanga Rocks, Remainder of Erf 3434 Umhlanga Rocks, Remainder of Erf 3465 and 3457 Umhlanga Rocks, measuring 64 hectares in extent (collectively the “Property”) for a total purchase price of R167,264,956.96 (the “Transaction”). 2. OVERVIEW OF THE PROPERTY 2.1. The Property is situated within the Izinga Precinct north of Umhlanga Ridge and above the town of Umhlanga Rocks. The Property is designed for clients looking for affordable living combined with the tranquillity of coastal life and a rich natural environment. The Property is minutes away from the commercial hub of Umhlanga. 2.2. A portion of the Property is zoned and will be serviced for immediate construction of 335 residential apartments. Balwin intends to obtain rights for a minimum of 1286 residential apartments which will be built on the remainder of the Property and all phases will be linked into one development. 3. RATIONALE FOR THE TRANSACTION Balwin has been negotiating with the Seller since 2018 to acquire the Property which is the last remaining significant portion of developable land with an Umhlanga address. The acquisition of the Property is aligned with Balwin’s strategic objectives highlighted in its 2019 Integrated Annual Report to expand its development operations in Kwa-Zulu Natal. In addition, one of Balwin’s plans for 2020 as well as the “Boards focus Area” in the 2019 Integrated Annual Report was to investigate opportunities and increase its presence in Kwa- Zulu Natal following the success of Balwin’s Ballito Hills Estate. Balwin believes that the acquisition of the Property will assist it to achieve its goal of expanding within the Kwa-Zulu Natal region. 4. PURCHASE CONSIDERATION 4.1. The total consideration payable by Balwin to the Seller in terms of the Agreement is R167,264,956.96 (excluding VAT) (“Purchase Consideration”), which is to be paid by Balwin on date of registration of transfer of the Property. 4.2. The Purchase consideration is payable as follows – 4.2.1. R16,726,495.70 refundable deposit payable into the Conveyancer’s Trust Account by 6 March 2020; 4.2.2.R117,085,469.87 to be secured by way of a bank guarantee by 6 March 2020 ; and 4.2.3.R33,452,991.39 to be secured by guarantee or paid in cash to the Conveyancer’s Trust Account by 6 March 2020. 4.3. The purchase consideration will be funded from a combination of existing cash reserves and new bank debt. The bank debt will be ring-fenced to the development to be completed on the Property being acquired. 4.4. Subsequent to the new bank debt in 4.3 above being obtained, Balwin’s total debt to equity ratio will remain comfortably within the 50% target threshold as mandated by the Balwin board. 5. VALUE OF THE NET ASSETS AND PROFITS ATTRIBUTABLE TO THE NET ASSETS The value of the land to be acquired is R167,264,956.96 (excluding VAT). The land will not generate profits in isolation as the land will be developed into sectional title residential apartments and profits will be attributed to the sale of the respective apartments. 6. CONDITIONS PRECEDENT TO THE TRANSACTION 6.1. Balwin to obtain board approval by 28 February 2020; 6.2. Balwin to obtain bank funding approval by 28 February 2020; 6.3. The Seller to obtain consent from the Mortgagee to sell the Property by 28 February 2020; 6.4. The Seller to obtain a Water-Use License by 13 March 2020; 6.5. The Seller to obtain Local Authority approval for rezoning of Portion 6 of Erf 3434 Umhlanga Rocks to “Education” by 28 February 2020; and 6.6. The Seller to obtain the necessary Local Authority certificates to transfer the Property by 28 February 2020. 7. EFFECTIVE DATE OF THE TRANSACTION In terms of the Agreement, the effective date of the Transaction will be the date that all Conditions Precedents are fulfilled or waived. 8. JSE CATEGORISATION The Transaction is categorised as a category 2 transaction in terms of paragraph 9.5(a) of the JSE Listings Requirements and accordingly no shareholder approval is required. Johannesburg 19 February 2020 Sponsor and corporate advisor: Investec Bank Limited Date: 19-02-2020 12:08:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.