JSE-listed residential property developer Balwin Properties published its audited consolidated financial results for the year ended 28 February 2025, revealing a mixed performance shaped by persistent economic headwinds and a promising rebound in the latter half of the financial year.
Balwin is a residential property developer of large-scale, sectional title estates with a focus on high quality, environmentally efficient and affordable apartments with an innovative lifestyle offering for residents.
Estates typically consist of between 1 000 and 3 500 sectional title residential apartments located in the targeted nodes of Johannesburg, Tshwane, the Western Cape and KwaZulu-Natal.
An increasing number of larger-scale developments have been introduced into Balwin’s portfolio, particularly in the Green Collection brand where the economies of scale allow for the desired affordability of the apartments.
Revenue declined by 6% to R2.2 billion from R2.4 billion in 2024, while the group’s full-year profit rose 8% to R234.0 million. Earnings per share (EPS) also increased by 8% to 49.74 cents.
However, headline earnings per share (HEPS), a more conservative earnings metric, dropped 4% to 45.95 cents, reflecting a nuanced financial picture.
The company cited ‘a tale of two halves,’ with 62% of annual revenue and 67% of profit generated in the second half of the year.
The rebound followed a 75 basis point cut in the prime lending rate since September 2024 and renewed consumer confidence after the formation of a Government of National Unity in June 2024.
The lower interest rate environment spurred a 30% increase in monthly average gross apartment sales since the rate cuts began.
Despite the stronger second half, Balwin recorded an 8% year-on-year decline in apartment deliveries, with 1,749 units recognised in revenue compared to 1,892 in 2024.
Nonetheless, gross profit margins improved to 30% from 28%, thanks largely to strong performance from Balwin Annuity, which grew revenue by 33% to R175.8 million and contributed nearly 8% to group revenue.
Balwin Annuity’s growth provided critical profit margin support during a difficult trading year, the company noted. Gross profit from the annuity division rose to R171.7 million, up from R131.0 million the prior year.
Operating expenditure was tightly controlled, remaining flat at R350.9 million. Operating costs at the company level fell by 6%, although the annuity division saw a 14% rise in costs due to increased activity.
The group ended the financial year with R254.8 million in cash, exceeding internal thresholds and funding covenants. The loan-to-value ratio improved slightly to 40.4%, reflecting disciplined financial management.
In light of continued economic uncertainty, the board opted not to declare a dividend for the 2025 financial year—maintaining the position from 2024. Capital preservation and debt reduction remain top priorities, the company stated. The board will revisit the dividend decision in the next financial year.
As South Africa continues to navigate high interest rates and political shifts, Balwin’s cautiously optimistic outlook will depend on ongoing market stability and consumer confidence, it said.
The group anticipates further rate cuts in the coming year, which should support a gradual rebound in the residential property sector.
Reducing debt and managing borrowing costs are key strategic objectives, balanced with the need to maintain a robust development pipeline—particularly through expansion in the Western Cape.
The group is also exploring sustainable capital solutions for infrastructure through collaboration with government entities, and selectively disposing of non-core assets to further reduce debt, it said.
In April, the International Finance Corporation (IFC), a member of the World Bank Group, committed a R1 billion ($58 million) loan to Balwin Properties to develop over 14,500 affordable, eco-friendly apartments in Tshwane’s Mooikloof Smart City.
The company has a 12-year development pipeline comprising around 36,000 build-to-sell apartments across major metros including Johannesburg, Tshwane, the Western Cape, and KwaZulu-Natal. Projects are segmented into the Classic, Green, and Signature Collections to appeal to a broader market.
As reported in July 2024, in a move to diversify income streams and optimise land use, the group has ambitious plans to grow its rental portfolio to complement its core build-to-sell business.
Approximately 6,200 rental units have been identified, with the rollout aligned to the group’s capital structure strategy.
This initiative aims to establish a more resilient annuity income stream to complement the cyclical nature of its core development business.
