6 new ‘affordable’ lifestyle estates coming to Joburg, Tshwane and the Western Cape

Balwin Properties plans to open six new estates for rentals over the next decade, which will be targeting rentals in the R6,000 to R13,000 per month range.

Balwin Rentals, a wholly owned subsidiary of Balwin Properties, plans to expand its rental portfolio, with a vision to develop 7,300 apartments for rent over the next eight to 10 years.

“We are very excited about the launch of our rental portfolio, which will be complementary to our
current build-to-sell model,” said Balwin CEO Steve Brooks.

“Having a substantial rental portfolio will serve as an incubator, enabling tenants to progress up the property ladder by eventually buying their own Balwin apartment.”

“At the same time, it allows us to unlock our landbank a lot quicker, as the first phase of 7,300
apartments represent approximately 20% of our land bank.”

“Balwin Rentals introduces a more defensive asset class that will further diversify our revenue streams
and complement the cyclical nature of our build-to-sell development business.”

Balwin has identified existing land parcels owned by the group for the first six build-to-rent developments, which will aggregate up to 7,300 apartments.

This represents roughly 20% of the company’s current unused land portfolio.

Existing land parcels for the six estates have been identified in Johannesburg East, Tshwane East, and the Western Cape.

“Over the past few years, we have steadily expanded our capacity, skills, technology, and systems, and
we’re now in a position to roll out a scalable and efficient rental portfolio without detracting from our
existing build-to-sell model,” Brookes added.

Balwin said that the rental portfolio will target market rentals between R6,000 and R13,000 per month for one-, two- and three-bedroom apartments.

It will also retain other quality and certain lifestyle elements, such as solar, high-speed fibre connectivity, and facial recognition access control.

The rental developments will also have the EDGE Advanced certification, like Balwin’s build-to-sell model.

Balwin said that these developments have been sufficiently cost-engineered to generate above-market-related yields feasibly.

“Although the Group expects Balwin Rentals’ initial revenue contribution to be negligible for the financial year to 28 February 2025, it will increasingly contribute to the Group’s annuity income and net asset value growth over the medium term,” said the group.

“Balwin Rentals will have full control over the rental estates, allowing Balwin to optimally manage costs.”

“The management of the rental portfolio will be internalised and as far as possible, be tech-driven to reduce operating costs and enhance yield performance.”

“The use of technology will further ensure smooth and efficient onboarding and collection of rental income, reducing the need for aggressive headcount increases as the business scales.”

The group also envisages raising long-term debt finance from commercial lending and Development Finance institutions at preferential interest rates to fund the developments.

Like the build-to-sell model, developments will be constructed and tenanted in phases to minimise risk.

With the first six rental developments, Balwin said 39,000 direct and indirect job opportunities are expected to be created over the next eight to 10 years.

“Importantly, it will also act as a catalyst to retain important construction skills, as developments will be on a similar rotational basis as with Balwin’s build-to-sell model,” said the group.

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