Balwin Properties plans to raise up to R1,6bn through JSE listing

Posted On Sunday, 04 October 2015 18:10 Published by
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Balwin Properties is looking to raise between R713 million and R1.6 billion ahead of its listing on the “Real estate holding and development” sector of the JSE main board on Thursday, 15 October 2015.

De Velde, Somerset West

The capital will be raised through a private placement of new ordinary shares in a range of between R8.51 and R9.88 per share with qualifying institutional investors, invited investors and private clients of selected stock broking companies in South Africa. The offer opened on Thursday, 1 October 2015 and closes on Thursday 8 October 2015. Investec Bank Limited is the corporate advisor, bookrunner and sponsor for the offer.

Stephen Brookes, Chief Executive Officer and founder of Balwin said: “We are pleased to be progressing with Balwin’s listing to enhance our public profile, provide improved access to capital and support our overall growth objectives.

“The listing also offers the opportunity for new investors to participate in the long-term growth of Balwin as we deliver on our eight year secured pipeline of residential developments in desired South African nodes.”

The proceeds from the listing will be used to settle existing debt facilities and provide the Company with added balance sheet capacity for future development activities and land acquisitions. The Company is currently negotiating to acquire additional land parcels for 15,000 units in Kyalami, Johannesburg.

“Balwin offers an attractive investment proposition backed by a robust, proven, business model and strong market fundamentals to deliver sustainable returns for investors.”

“Our current build-to-sell model has high barriers to entry and is easily scalable. In addition, we plan to develop, retain and manage a rental portfolio of 2000 to 3000 units by 2020, valued at up to R3 billion.”

“As the market leaders in sectional title estate development, we are on track to sell over 1,800 units this year and deliver an after tax profit of around R550 million for the financial year to 29 February 2016,” added Brookes.

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 1000 units and offering secure, affordable, high-quality and environmentally friendly one, two and three bedroom apartments ranging in size from 45m2 to 120m2.

Apartments are priced between R599,900 and R1,699,000 and targeted at the middle income population category, which includes first time, move-up, active adults, young professionals, families, retirees and buy-to-let investors.

“Our developments represent affordable luxury, security and convenience and appeal to a wide range of buyers.

“The apartments we specialise in are in high demand, driven by factors such as urbanisation, growing middle class, safety concerns with standalone housing, land scarcity and high building and property costs,” concluded Brookes.

Since establishment in 1996, Balwin has successfully developed, marketed and sold over 70 prominent residential estates comprising some 13,500 residential units, the bulk of which were delivered since large scale operations began in 2005. Balwin controls and manages the entire development process, from land identification, acquisition and zoning to pre-sales and marketing, construction and construction management, sourcing of materials and fittings, safety and quality assurance, and the final handover to homebuyers.

Balwin’s developments are located in key nodes and have on-site lifestyle amenities including restaurants, a club-house, sport and entertainment facilities. Balwin which has been recognised as the national homebuilder of choice in South Africa has received various awards and industry recognition, the most recent being the Residential category (Africa and Middle East) of the International Property Awards (2014/15) for its De Velde development in Cape Town.

Balwin is currently owned 70% by management and 30% by its private equity partner, Buffet Investments. The founding directors of the company will remain the largest shareholder group post-listing.

The JSE has granted the Company a listing in respect of up to 483,835,710 ordinary shares under the abbreviated name “Balwin”, share code “BWN” and ISIN ZAE000209532.

Last modified on Sunday, 04 October 2015 19:59
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