Demand for Balwin Properties’ high-quality apartments remained firm in the year to February 28, despite losing three months’ construction time to Covid restrictions. Photo: File
Demand for Balwin Properties’ high-quality apartments remained firm in the year to February 28, despite losing three months’ construction time to Covid restrictions. Photo: File

Balwin Properties’ apartments selling well

By Edward West Time of article published May 18, 2021

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CAPE TOWN - DEMAND for Balwin Properties’ high-quality apartments remained firm in the year to February 28, despite losing three months’ construction time to Covid restrictions.

A total of 2 546 apartments were recognised in revenue, compared to 2 715 apartments in the prior financial year, the annual results released yesterday showed.

Chief executive Steve Brookes said yesterday a range of pragmatic solutions were implemented during the lockdowns, including the launch of an online sales platform, promotions and other incentives to continue to drive sales.

The 275-basis point reduction in the prime lending rate and an increased preference to work from home had further supported demand, he said.

As a result, revenue of R2.7 billion had only declined by 7 percent and profit margins were maintained 27 percent compared to the prior period.

As a consequence of limited construction and subsequent apartment handovers, earnings and headline earnings fell 19 percent to 71.67 cents and 71.47 cents a share, respectively, in line with the company’s market guidance.

Pre-sales beyond the reporting period of 2 499 apartments were significantly more than 1 855 apartments at the same time last year.

Sales were bolstered by especially one- and two-bedroom apartments, which accounted for 77 percent of the total number of apartments recognised in revenue.

Cash of R367.9m was held at year end. The long-term debt-to-equity ratio was 29 percent at the end of the reporting year (27 percent), well within the board threshold of 50 percent. A review of funding structures were being undertaken.

Eight new developments were launched through the year, with Balwin increasing the roll-out of its Green Collection developments which now account for 23 percent of apartments recognised in revenue, and which contributed 15 percent (6 percent) of total revenue from sales.

The construction pipeline was expanded to 62 288 apartments across 28 lifestyle estates in key target nodes, representing an approximate development horizon of 15 years.

“We have been working around the clock to catch up as much construction as possible without compromising on quality,” Brookes said.

Following a partnership with Absa Bank to offer green home loans to Balwin customers through the introduction of the Absa Eco Home Loan, three other major financial institutions – First National Bank, Nedbank, and Standard Bank – had also approved this concept.

Through this initiative, Balwin’s customers would benefit by receiving a reduction in the offered interest rate.

“The continued strong sales, the highly successful launch of our online sales platform during lockdown as well as the exceptionally strong pre-sales are encouraging,” Brookes said.

The share price was up 0.22 percent to R4.51 yesterday afternoon, well up from R2.28 a year ago. The shares closed xxx

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