May 22 2026 15:00
JOHANNESBURG, SOUTH AFRICA
Balwin Properties will delist after 11 years as the group looks to realise a capital event and give impetus to its project layout.
The company which was formed by CEO Steve Brookes on Wednesday made the announcement that a consortium including Brookes had proposed to take Balwin private.
Balwin, the largest developer of sectional title properties in Africa, has battled to grow its market capitalisation since in listed on the JSE in 2015. Balwin’s first trade opened at R11.00, giving it a sizeable market capitalisation of R5.2bn. The group then lived through the 2017-2018 Resilient stable of companies scandal and the Covid-19 pandemic. Its market capitalisation sat at R2.15bn by midday trade on Friday. The group had seen its share price climb around 9% on Wednesday. Balwin has not attracted that much liquidity into its shares as numerous property investors have favoured investing in real estate investment trusts (Reits) which are mandated to pay out a minimum of 75% of their distributable income annually. This suits pension fund managers who need consistent income.
Balwin is not a Reit but rather a specialist residential property developer. Balwin’s income payouts tend to be more lumpy or inconsistent as the group focusses on long-term capital growth for shareholders.
Balwin announced that Brookes, MD Rodney Gray, the Public Investment Corporation (PIC) and GRE Africa offered a R4.35 a share deal to acquire Balwin, which was at a 4.1% premium to its six-month volume-weighted average trading price, valuing the company at R2.26bn.
Brookes, Gray and GRE Africa are existing shareholders which together own 50.14% of Balwin. Brookes is the largest shareholder with 33.07% through his entity Volker Holdings. gray owns 9.49% via Rodna Investments and GRE Africa has 7.58%. GRE Africa is part of the Buffet Investment Stable which is led by reclusive South African entrepreneur, Jonathan Beare.
These entities are excluded from voting on the Scheme of Arrangement and will not receive a cash consideration for their Balwin shares under the scheme but will remain invested alongside the PIC through the proposed private ownership structure.
Based on 519,411,852 total Balwin shares in issue and 261,253,473 excluded shares, the maximum number of shares to be acquired under the scheme is expected to be 258,158,379 shares, implying maximum cash consideration of approximately R1.12 billion payable to eligible shareholders.
Shareholders holding 163,975,952 Balwin shares have provided irrevocable support to accept or vote in favour of the offer, representing approximately 63.5% of the scheme shares.
A new entity Bidco will acquire Balwin and effectively see the PIC which acts on behalf the Government Employees Pension Fund replace the other remaining minority shareholders with a 49.3% share of Balwin.
Brookes’ and Gray’s shareholdings will increase slightly as portions of their long-term incentives under a conditional share plan will vest once the takeover transaction is implemented.
Brookes told Property Flash that the deal would create a capital event and then Balwin could start developments in large tracts of land. Brookes also wants to create new projects in the Western Cape. The group would also be able to rollout infrastructure projects around its projects.
“This transaction brings together long-term domestic institutional capital from the PIC, acting on behalf of the GEPF, with the continued commitment of Balwin’s founder-management and other significant existing shareholders. Importantly, management and the reinvesting shareholders are not taking cash out of the transaction. They are remaining invested alongside the PIC because they believe in Balwin’s platform, its development pipeline and its long-term prospects,” Brookes said.
The offer gives eligible shareholders the opportunity to realise cash value at a premium in a share that has had limited liquidity and has traded at a sustained discount to underlying net asset value, he said.
Balwin’s reported NAV per share remains materially above the offer price, but that NAV is embedded in a long-dated development platform where value is realised through land development, construction, sales, bond approvals, transfers and cash collection, rather than being immediately available as distributable cash, he said.
For eligible shareholders, the transaction also addresses a practical liquidity issue. Balwin’s shares have traded in modest volumes for an extended period, making it difficult for larger shareholders to exit meaningful positions through the market without execution risk. The offer provides immediate cash settlement and certainty of value, while allowing the business to continue investing for long-term growth under private ownership, the group said.
Balwin’s bidding consortium said that the listing was no longer compelling given the limited liquidity in Balwin shares, the discount to underlying net asset value at which the shares have traded, and the costs associated with maintaining a listed-company structure.
“Balwin’s business is long dated, capital intensive and sensitive to the interest rate cycle, which affects affordability, mortgage appetite, buyer conversion and the pace at which sales translate into cash. Its residential development model involves long cash-conversion cycles, multi-year inventory build-up, ongoing working-capital requirements, municipal dependencies, infrastructure constraints and input-cost volatility. These factors can introduce timing and margin variability and are not always well matched to public-market valuation cycles,” the consortium said.
The PIC’s participation, on behalf of the GEPF, brings long-term domestic pension capital into a residential development platform with established scale in South Africa. The PIC acts as asset manager for the GEPF and invests funds on behalf of the fund in line with client mandates.
Balwin’s board has appointed Valeo Capital as an independent expert to review the terms of the takeover scheme. YW Capital acted as corporate finance advisor to Balwin Properties on the transaction.
alistair@propertyflash.co.za
