Chief executive Steve Brookes said on Monday that focused promotional campaigns had also been launched which had supported strong sales in the period. File Photo: IOL

CAPE TOWN – Balwin Properties, a developer of high-quality apartments, has had to scale down from its elite apartment model to one- and two-bedroomed units, which has helped the group weather the tough economic times in the six months to August 31.

Chief executive Steve Brookes said on Monday that focused promotional campaigns had also been launched which had supported strong sales in the period. In the past six months headline earnings per share increased to 40 cents, an increase of 5 percent over the comparative six-month period. An interim dividend of 11.70 cents a share was declared.

Balwin, which has a development pipeline of about 8 years and 28 127 apartments, achieved a world first during the period when it registered more than 16 000 apartments as Economic Dividends for Gender Equality (Edge) certified. An innovation of the International Finance Corporation, Edge was created as a measurable solution to prove the financial case for building green, and to help jump-start the proliferation of green buildings.

The residential housing market, particularly the middle to upper-income bracket where Balwin operates, has been under severe strain this year, due to low economic growth and declining consumer spending.

Balwin’s operating costs increased by R27 million in the past six months as the group added on-staff at middle- and top-management levels to deal with the expanding business. Increased marketing costs further contributed to the increase.

Due to the group's focus on cash preservation through the difficult economy, governance process on new property development was strengthened,

“Due diligences including costs, infrastructure, zoning and an independent review of residential demand in a specific node have to be successfully concluded before the opportunity is presented for review and recommendation to the executive committee, and subsequently the Transactions Committee, before it ultimately is tabled at board level for final approval and implementation,” Brookes said.

Some 1 309 apartments, representing a 24 percent increase on the comparable period, were recognised in revenue in the past six months. There had been strong sales at The Blyde in Tshwane East, Ballito Hills in Ballito and the Kikuyu development at Waterfall. 

This included 1 213 build-to-sell apartments and 96 rental apartments sold to Balwin Rentals Proprietary. 

Brookes said going forward, the focus would be on developing the existing pipeline of projects, remaining conscious of land opportunities, but also ensuring that opportunities would be contracted in a way that would not hurt the group’s cash resources.

BUSINESS REPORT