May 28 2026 15:00
JOHANNESBURG, SOUTH AFRICA
Balwin Properties, the largest sectional title developer in SA, which is set to delist, delivered impressive financial results this month.
The group said it remains focused on environmentally responsible building practices and the delivery of high-quality, affordable, lifestyle-oriented apartments. It released its audited financial results for the year ended 28 February 2026 wherein it reported strong sales growth after some challenging periods.
“The 2026 financial year reflects a meaningful recovery from what was our toughest trading period since the business was founded in 1996. The improvement in this year’s numbers should therefore be seen in the context of the very low base set in 2025, but also in the context of a macro-economic cycle that has remained uneven,” CEO Steve Brookes said.
Brookes has led Balwin for thirty years. He was awarded a lifetime achievement prize at last week’s Reside Summit; a property conference that weas focussed on residential property and was held at Sandton Convention Centre.
Brookes said the group had benefited from improving residential market conditions during the year, supported by moderating inflation and an easing in interest rates, which improved affordability, buyer confidence and fixed property investment. South Africans are under pressure in a barely growing economy beset with stubborn employment.
“While conditions have clearly improved, we are not assuming a clean or uninterrupted recovery. Interest rates were a material headwind through the prior period, became a tailwind as the easing cycle started to support affordability, and may become a headwind again if recent fuel-price pressures flow through into inflation and interest rates rise over the medium term” he said.
The South African Reserve Bank (SARB) raised the repo rate by 25 basis points to 7.0% on Thursday, pushing the prime lending rate to 10.5%. Announced by Governor Lesetja Kganyago, the hike is a defensive measure to counter accelerating inflation driven by higher oil prices resulting from the Middle East crisis
“We are therefore managing the business around what we can control: matching construction to sales velocity, protecting liquidity, containing costs, and maintaining product quality without compromising affordability,” said Brookes.
Revenue increased 21% to R2.7bn, compared with R2.2bn in the prior year, reflecting improved residential market conditions and a recovery in apartment sales.
Revenue from the sale of apartments increased by 22% to R2.4bn, underpinned by a 17% increase in apartment handovers, with 2 053 apartments recognised in revenue compared to 1 749 apartments in the prior year.
Demand remained strongest for one- and two-bedroom apartments, which accounted for 76% of apartments handed over during the year, compared to 74% in the prior period.
The Western Cape was the largest regional contributor, accounting for 54% of revenue from the sale of apartments. The region’s performance was led by developments including De Aan-Zicht, Greenbay, The Huntsman, De Kuile and Suikerbos. Gauteng continued to show depth across selected nodes, while KwaZulu-Natal remained resilient, supported by Ballito Hills and Izinga Eco Estate.
The Classic Collection remained the core contributor to group revenue, supported by its strong presence in the Western Cape and continued demand for Balwin’s high-quality, lifestyle-oriented apartments. The Green Collection continued to serve the group’s more affordable entry-level offering, while the Signature Collection maintained its positioning in select premium nodes.
Profit after tax increased by 9% to R254.5m. Earnings per share increased by 5% to 52.36 cents, while headline earnings per share increased by 4% to 47.72 cents.
The annual results were affected by non-recurring items, including land sale transactions recognised in both the current and prior financial years, fair value adjustments to investment property and a write-off of feasibility costs related to the proposed in-house development of educational facilities, which was ultimately deemed misaligned with the group’s strategic objectives.
Excluding the impact of these non-recurring items, recurring profit after tax increased by 36%, while recurring headline earnings per share increased by 41% to 56.44 cents. The group said this better reflects the performance of the core business operations.
The group reported a gross profit margin of 27%, compared with 30% in the prior year. The gross profit margin from apartment sales remained stable at 24%, while the underlying group gross profit margin, excluding non-recurring land transactions, improved to 30% from 29%.
Total operating costs increased 11% to R390.9m, with Balwin Properties’ company operating expenses increasing by 4%. Fixed operating costs within the company reduced by 7%, reflecting continued focus on efficiency and cost containment.
Balwin closed the year with a cash position of R208.6m and cash on hand remained above funding covenants and board thresholds. Cash generated from operations improved strongly to R198.7m, compared with cash used in operations of R211.5m in the prior year, supported by improved profitability and disciplined working capital management.
Development loans and facilities reduced to R3.2bn from R3.3bn, while the loan-to-value ratio improved to 38.1% from 40.4%. The group remained fully compliant with its financial covenants at year end.
Developments under construction increased to R6.9bn, reflecting continued investment in land, infrastructure, development rights and construction costs. The increase was predominantly concentrated in the Tshwane node, driven by infrastructure expenditure for the next phase of the Mooikloof Smart City development.
“Capital structure remains a key focus area. Our strategic intent is to reduce debt exposure over time, while still maintaining an optimal pipeline across our operating nodes. We do not want to underinvest into demand, but we also do not want to carry unnecessary exposure in a higher-cost funding environment,” said Brookes.
The board resolved not to declare a final dividend for the 2026 financial year, with its primary focus remaining the prudent allocation of capital and reducing debt exposure. The board will continue to monitor local and international market conditions and will reassess the appropriateness of declaring a dividend for the 2027 financial year, it said.
Balwin is likely to de-list before the end of the next financial year in any case.
At year end, the group had 1 278 apartments pre-sold for future financial periods, compared to 814 apartments in the prior year.
Sales momentum continued after year end, with 1 026 gross sales recorded in March and April 2026. By May 2026, Balwin had 2 304 apartments forward sold, providing resilience against uncertain market conditions and positioning the group to benefit if affordability improves further.
The build-to-sell pipeline is substantial, with 26 334 apartments across Gauteng, KwaZulu-Natal and the Western Cape. Gauteng remains the largest contributor to the pipeline, with 18 235 apartments and an estimated development horizon of around 10 years. KwaZulu-Natal has a pipeline of 4 288 apartments, while the Western Cape pipeline stands at 3 811 apartments.
The group said it would continue to leverage its existing land bank and development pipeline, while remaining attentive to selective opportunities in the Western Cape where demand for the Balwin product remains evident. Any future exposure will remain subject to zoning, servicing, pricing and return thresholds.
Balwin Annuity delivered revenue growth of 25% to R219m. The division maintained its 8.1% contribution to group revenue, reinforcing the growing importance of complementary revenue streams around the core development business.
The annuity platform includes Balwin ICT, Balwin Real Estate, rentals, customer services, Green Living and other businesses including padel, signage and towers.
Balwin ICT recorded growth, supported by 16 507 homes passed, 11 740 active clients and a 70% uptake at homes connected. Balwin Green Living operated across 13 developments and contributed to a reduction of approximately 4 500 tonnes of carbon dioxide emissions across the group.
The rental portfolio achieved an average occupancy rate of 96.9% during the year. The Eastlake, Balwin’s first purpose-built rental development in Linbro Park, reached practical completion in November 2025 and was independently valued at R163m at year end. Subsequent to year end, the Greenpark rental apartment portfolio was sold for R171.8m, with proceeds to be used to reduce debt and provide cash for reinvestment into the rental portfolio.
The group has identified approximately 7 700 apartments for potential development within the build-to-rent portfolio. This opportunity will be introduced cautiously and in a measured manner, aligned to demand, funding, returns and the broader annuity strategy.
Balwin is the first South African company to have both a science-based target and Net Zero commitment approved by the International Science Based Target Initiative. All new developments continue to target EDGE Advanced ratings.
At year end, Balwin had 27 802 preliminary EDGE certifications and 11 386 post-construction certificates. The group also had 11 lifestyle centres awarded six-star Green Star ratings by the Green Building Council of South Africa, including its head office.
During the year, Balwin achieved a 34% reduction in scope 1 and 2 carbon emissions. It also secured 1 812 green bonds for clients, providing estimated total savings of R126 million over a 20-year mortgage period.
247@propertyflash.co.za
