Balwin Chief Executive, Steve Brookes commented:“Our performance for the first six months of the financial year is very encouraging, supported by a lower interest rate cycle, enhanced loan affordability and improved sentiment from investors and homebuyers in the residential market. It should be seen in the context of the tough 2025 financial year though and comes off a low base.

“Notwithstanding the more buoyant market, we continued to focus on managing construction costs and reducing operational expenditure wherever possible, supported by a strong performance by Balwin Annuity.”

Revenue for the period increased by 44% to R1.2 billion on the back of 928 apartments handed over, compared to 640 apartments recognised in revenue in the first six months of the prior financial year.  

1 028 apartments were pre-sold for future financial periods, a significant increase on the 743 apartments pre-sold in the prior year, mostly as a result of strong buyers’ interest following the moderation of inflationary pressures and a cautious easing of interest rates of 50 basis points over the period by the Reserve Bank.

The group consequently reported an operating profit of R156.6 million, a 35% increase from the prior period. After-tax profit improved by 33% to R102.4 million. This translated into improved earnings and headline earnings per share, which increased by 28% and 29% respectively, to 20.91 cents per share.

Operational discipline and strategic cost management

Balwin’s performance was underpinned by several key measures aligned to market recovery, including:

• Accelerating construction to match sales velocity while preserving cash flows,
• Sensible cost engineering to manage construction costs without compromising quality,
• Reduced reliance on sales incentives due to stronger market conditions,
• Leveraging sport as a cost-effective brand marketing tool, and
• Tightening overheads and reducing operating expenditure wherever practical.

Operating costs increased by 24% to R193.1 million, reflective of the increased number of apartments handed over and the expansion of Balwin Annuity’s operational footprint. Fixed costs within the group were well maintained to reduce marginally from the prior period.

The gross profit margin eased slightly to 29%, down from 32% in the previous interim period, which included a R46 million land sale in Tshwane East for shopping-centre development.

Brookes noted that while no land sales occurred during the current period, the group remains committed to its strategy of selling land parcels at large-scale developments to partners offering complementary amenities such as retirement developments, schools, fuel stations and retail facilities.

Regional performance and development pipeline

The Western Cape reclaimed its position as the group’s leading revenue contributor, accounting for 51% of total revenue, underpinned by a robust 70% year-on-year growth in the region.

Gauteng followed closely, contributing 40% of revenue and delivering a solid 22% improvement.

KwaZulu-Natal, while contributing a smaller share at 9%, recorded significant growth off a lower base, reinforcing the province’s growing relevance in the Group’s national footprint.

The Group continues to benefit from a healthy dynamic between its two largest markets in the Western Cape and Gauteng, both of which remain central to Balwin’s long-term strategy. Gauteng’s development pipeline remains particularly strong, with approximately 24 000 apartments under the build-for-sale model, largely concentrated within the Mooikloof Smart City, a government-designated Strategic Integrated Project.

In the Western Cape, the current pipeline of approximately 4 400 apartments is under active review to meet sustained demand. Management is exploring additional zoned and serviced land opportunities to expand capacity in this high-performing region.

Brand performance and pricing momentum

The Classic Collection continued to anchor performance, contributing 81% of total revenue. Revenue from this segment grew by 74% compared to the prior period, driven largely by its strong presence in the Western Cape.

The Green Collection delivered modest growth of 5%, contributing 12% to Group revenue. The Signature Collection, which caters to the premium segment, maintained its strategic positioning with a 7% contribution, consistent with its niche role in the portfolio.

Average selling prices across the Classic and Green Collections demonstrated healthy upward momentum during the period.

Within the Classic Collection, price growth ranged between 5% and 6% across all apartment types, supported by strong demand in the Western Cape. The Green Collection also recorded encouraging gains, with one-bedroom apartments increasing by 3%, and two- and three-bedroom apartments achieving growth of 8% and 9% respectively.

This pricing performance reflects Balwin’s ability to limit the use of sales incentives - a lever previously employed to stimulate demand.

Balwin Annuity: strategic growth and lifestyle integration

Balwin Annuity delivered another strong performance during the reporting period, with revenue increasing by 55% to R101.5 million. The division now contributes 8.3% to total group revenue, underscoring its growing strategic importance within the broader Balwin portfolio.

Electronic communication and internet services remain the leading revenue stream, accounting for 43% of annuity income. This segment grew 24% period-on-period, reflecting sustained demand for integrated digital infrastructure across Balwin’s developments.

Rental income rose by 53%, now representing 23% of annuity revenue. This growth was primarily driven by The Eastlake in Johannesburg East - Balwin’s first bespoke rental development - which continues to outperform expectations with average occupation levels of 97.4% during the period.

Additional annuity streams, including maintenance services, digital advertising, cellular towers, and padel facilities, contributed R15.6 million. These offerings reflect Balwin’s commitment to diversifying its revenue base while enhancing lifestyle value for residents.

Solar energy and bond origination services also posted strong gains, growing approximately 60% to R18.7 million. Together, they now account for 18% of total annuity revenue, reinforcing Balwin’s focus on sustainability and integrated homeownership solutions.

Sustainability leadership and green innovation

In line with its sustainability objectives, all new developments undertaken by Balwin Properties are aimed at achieving EDGE (Excellence in Design for Greater Efficiency) Advanced ratings. To date, the group has certified 39 151 apartments, demonstrating energy savings of 40% or more and water savings of 20% or more and reduction in embodied energy of 20% or more.

The company's dedication to sustainable practices extends beyond individual apartments. 10 of Balwin's lifestyle centres have achieved six-star Green Star ratings by the Green Building Council of South Africa, all of which have been accredited with Net Zero Carbon ratings, affirming their ability to generate and maintain a net zero carbon footprint. This includes Balwin’s head office at 105 Corlett Drive which is also a 6-star Green Star, Net Zero Carbon and Net Zero waste rated asset.

In the pursuit of sustainable financing options for its clients, Balwin has secured 865 green bonds for home buyers during the period. These bonds not only provide financial benefits but also contribute to significant savings, amounting to a total of R58.1 million over 20 years.

Outlook: Disciplined growth and strategic focus

Looking ahead, Brookes concluded:

“Balwin has emerged leaner, more focused, and well-positioned for disciplined growth. With a strong brand, a healthy forward-sales position, and sustained demand for quality apartments, we’re cautiously optimistic about the second half of the financial year, provided that the operating environment remains stable.

“Our focus remains on cost optimisation, capital discipline, and expanding annuity income streams - all while delivering value to clients and upholding our commitment to responsible development.”