Real Estate Investor Magazine South Africa September 2016 | Page 12

STEPHEN BROOKES
and three bedroom apartments ranging in size from
45m2 to 120m2.
Balwin Properties reported revenue of R2.1 billion
for the 12 months ended 29 February 2016, a 54%
increase on the prior year and operating profit of R768
million, up 69%. Headline earnings per share rose
68% to 131 cents with profit after tax of R559 million
exceeding the pre-listing forecast of R542 million by
R17 million.
The financial year saw a record number of
registrations totalling 2 087 units. In addition, several
first phase developments that were launched during
the period, sold out within a few weeks of coming to
market.
“Despite a rising interest rate cycle and continued
pressure on disposable income, interest in our offering
remains resilient. We offer a premium product at
market related prices, with tenants finding the
lifestyle element including recreation and gym
facilities, free wi-fi, a restaurant and spa on the estate
very appealing,” added Brookes.
In line with its growth strategy, Balwin concluded
several strategic land acquisitions in key nodes such
as Bryanston, Olivedale, Linbro Park, Modderfontein
and Kyalami during the financial year. The Company
also increased its operating footprint in Pretoria East
through the acquisition of two land parcels for the
development of the Grove Lane (136 units – sold
out) and River Walk (6 300 units) estates as well as
in the Western Cape through the acquisition of land
for the development of The Sandown. At year end,
Balwin’s secured pipeline stood at 16 200 homes to
be developed across Johannesburg, Pretoria and the
Western Cape over approximately seven years.
“In addition to our existing pipeline, we concluded
an agreement providing us the right to develop
approximately 15 300 more units in the Waterfall
node. This development will consist of three different
developments in close proximity to the newly opened
Mall of Africa. I believe our developments will
change the way people live, shop, work and play in the
node,” said Brookes.
Balwin’s investment proposition is backed by
a robust, proven, business model supported by
urbanisation and growth of the middle class which
should see strong demand continuing. The Company

STEPHEN BROOKES TOP FIVE INVESTMENT TIPS
1 Property……..Property…….Property.
2 Invest in a good developer with a good track record.
3 Buy middle range property that gives a good yield.
4 Keep involved in all property developed.
5 Ensure you invest in good quality clients.

mitigates risk by matching construction to pre-sales
and rolling out developments over several phases
which are separately financed. “This phased approach
to development provides us with an exceptional cash
generating ability and scalability that protects the
business from macro-economic impacts to some
extent,” explained Brookes.
Cash flow generated is closely monitored to ensure
that proceeds are reinvested into the business in
order to create long term value for shareholders as
well as ensuring an appropriate margin of safety is
maintained.
Balwin’s policy is to re-invest 70% of its after tax
profits back into the business to support development
growth, with the remaining 30% of profits distributed
to shareholders.
Balwin Properties’ long-term goals are to
continually provide good quality affordable
apartments of the highest standard, which exceeds
their client’s expectations. Brookes primary goal is to
ensure that the company develops a strong national
foot-hold in the major metropolitan areas. They
also have plans to shift their focus to creating and
building up a substantial residential portfolio. Ba