- Balwin Properties says it has 28 developments in the pipeline which could be built over a 15-year development horizon.
- In the past year, the company increased the roll-out of its affordable Green Collection developments in Gauteng.
- In the upcoming year, Balwin will introduce its Green Collection brand to the Western Cape.
It's been a tough year for landlords, but not so much for companies focused on residential developments, Balwin Properties' financial results show.
The developer of prime residential estates such as The Polo Fields in the Waterfall Precinct and Izinga Eco Estate, located in Umhlanga, said it transferred 2 546 apartments to new owners in the year ended on 28 February, and pre-sold 2 499 more beyond that reporting period.
Balwin said even though the reduced interest rates were a welcome relief for the residential property market, conditions were challenging for the consumer.
So, to get things moving, the company rolled out price incentives and other sales-related promotions to continue to drive sales.
Although market conditions might not all be rosy, Balwin continues to rollout more developments too. The company said it has 28 developments consisting of 62 288 apartments in the pipeline which could be built over a 15-year development horizon.
The company said it will continue to monitor the land reform policy and is taking the necessary actions to ensure that this secured development pipeline is not negatively impacted.
Serving the affordable housing market
In the past year, the company increased the roll-out of its Green Collection developments in the current year. The Green Collection is the most affordable of Balwin's developments, with apartments priced from R499 900.
These include Greencreek in Pretoria East, as well as the Greenkloof Mooikloof Mega City in Pretoria, which is approved for beneficiaries of the government's Finance Linked Individual Subsidy Program.
By comparison, its Classic Collection - targeted at the middle-income market - has prices ranging from R699 900 to R2 million, while the higher income Classic Collection is priced from R2 million to R3 million.
"The planned growth in the Green Collection brand is set to continue in the upcoming year as the brand is being introduced into the Western Cape node to broaden the product offering to customers," wrote Baldwin in the results announcement.
But the company is feeling the Covid-19 effects in some areas too. Balwin recently announced its that it has withdrawn from the planned Wedgewood development in Sandton. The group launched Wedgewood in November 2020, with a view to offering affordable, upmarket accommodation in prime locations close to transport nodes and work premises.
Sandton's property market, however, is still facing considerable disruption. With many existing offices being converted to affordable apartments, Sandton and the surrounding areas could soon face an oversupply of residential stock too.
Balwin said its reason for withdrawing from Wedgewood was that the transaction contained certain conditions, including the requirement to meet specific secured pre-sales levels.
"Although the group recorded unprecedented demand, the conversion of the sale offers to secured sales was lower than expected and significantly lower than the conversion rate of the other brands within the group’s portfolio," wrote Balwin.