Balwin Properties lists to target developing residential projects

Balwin Properties has ambitions to be the largest listed residential property fund on the JSE.

Balwin Properties has ambitions to be the largest listed residential property fund on the JSE, saying it will roll out a strong development pipeline in the next five years.

Balwin, set to list on Thursday next week as a development play, said there was significant demand for housing and other residential property in SA.

Balwin joins residential property specialist Indluplace Properties. Balwin will differ from Indluplace as it will be a development play and will not distribute income.

Balwin focuses on large-scale sectional-title residential estates in high-growth, high-density nodes in major cities. It aims to raise R713mR1.6bn ahead of its listing.

CEO Stephen Brookes said he had ambitions to grow the fund to a market capitalisation of R10bn within five years. “I believe Balwin has decided to list at an opportune time. I appreciate that SA’s economic environment is weak currently but we have a strong pipeline and a robust business. I feel that Balwin can grow strongly over the next five years and we can double the share price,” he said.

“Our current build-to-sell model has high barriers to entry and is easily scalable. In addition, we plan to develop, retain and manage a rental portfolio of 2,000 to 3,000 units by 2020, valued at up to R3bn,” he added.

The listing capital will be raised through a private placement of new ordinary shares in a range between R8.51 and R9.88 per share with qualifying institutional investors, invited investors and private clients of selected stockbroking companies.

Investec Bank is the corporate adviser, bookrunner and sponsor.

“Balwin has a strong track record of execution on its projects, and appears to be well positioned in an attractive segment of the residential market when demand is expected to remain robust,” Investec Asset Management portfolio manager Peter Clark said.

“Its existing shareholder base, who will remain once listed, are high quality and add significant value. We expect the listing to appeal to generalist and specialist investors.”