Author Topic: Balwin Properties  (Read 5007 times)

Pluto

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Balwin Properties
« on: September 23, 2015, 04:15:56 pm »
http://www.702.co.za/articles/5357/massive-property-developer-to-list-on-jse

Personally, I like them. They sell places from R600,000 to just under R2,000,000 so they're not major expensive.
I've seen plenty of their developments go up around my place and as fast as they're built they're sold. I own a property bought through them too and can't complain (too much :) ...) from that side either.

What do you guys think?

Thanks!

rjthomas

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Re: Balwin Properties
« Reply #1 on: September 24, 2015, 04:46:42 pm »
Are you planning to buy pre-listing? I can't recall what those types of shares are called.
South African working in China since 2012

Pluto

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Re: Balwin Properties
« Reply #2 on: September 25, 2015, 10:26:49 am »
I think that would be the IPO (Initial Public Offering).
If I could find details on it I would probably consider it, honestly, i'm not too sure how it works, if they have to have and IPO or not?
My logic says they probably have to, in order to get some liquidity, otherwise they'll open on day 1 with all the shares being held by(70 percent by management and 30 percent by private-equity partner Buffet Investments), could be wrong though.

Hopefully someone here can clarify that.

czc

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Re: Balwin Properties
« Reply #3 on: September 25, 2015, 10:22:14 pm »
The interview on BDtv


Fawkes85

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Re: Balwin Properties
« Reply #4 on: October 02, 2015, 05:33:13 pm »
Abridged Pre-Listing Statement


BALWIN PROPERTIES LIMITED

(previously Balwin Properties Proprietary Limited)

(Incorporated in the Republic of South Africa)

(Registration number 2003/028851/06)

Share code: BWN

ISIN: ZAE000209532

(‘Balwin’ or ‘the Company’)


NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE

UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA OR ANY OTHER JURISDICTION

WHERE IT IS UNLAWFUL TO DO SO


ABRIDGED PRE-LISTING STATEMENT


This Abridged Pre-listing Statement relates to the listing of Balwin in the “Real estate holding and development” sector

of the main board of the JSE with effect from the commencement of business on Thursday, 15 October 2015. The

information and defined terms used in this Abridged Pre-listing Statement are as set out in the full Pre-listing Statement

issued by Balwin on Thursday, 1 October 2015.


This Abridged Pre-listing Statement does not constitute an offer to the public for the sale of or subscription for, or the

solicitation of an offer to buy or subscribe for shares in the Company, but is issued in compliance with the Listings

Requirements for the purpose of providing information to the public with regards to Balwin.


This Abridged Pre-listing Statement highlights selected information from the Pre-listing Statement. It is not complete

and does not contain all of the information that readers of the Abridged Pre-listing Statement and/or the Pre-listing

Statement should consider before investing in the Ordinary Shares. Investors should read the Pre-listing Statement

carefully in its entirety, including the “Risk Factors” section, the financial statements provided and the notes to those

financial statements.


1. THE OFFER


The Pre-listing Statement of Balwin dated 1 October 2015 is not an invitation to the public to subscribe for Ordinary

Shares in Balwin as contemplated in section 95(1)(h) of the Companies Act, 2008 (Act 71 of 2008), as amended and

accordingly no prospectus will be issued or registered in respect of the Offer.


The Pre-listing Statement is issued in compliance with the Listings Requirements of the JSE for the purpose of

providing information regarding the Listing of Balwin on the main board of the securities exchange of the JSE and the

private placement to Qualifying Investors by way of an Offer for subscription in terms of section 96(1)(b) of the

Companies Act.


The salient terms of the Offer are as follows:


Offer price range per Share:                R8.51 to R9.88

Number of Shares to be offered:          Subscription of up to 83,835,710 Shares; and

                                                       should there be sufficient interest from Qualifying Investors, sale of up to

                                                       82,922,675 Shares by existing shareholders.

Percentage of issued share capital:      32.85%


The private placement is subject to:


–  the subscription by Qualifying Investors of so many Shares in the Company such that a minimum aggregate

   subscription amount of R713,513,642 is raised by the Company; and

–  the placement of a sufficient number of Shares with Qualifying Investors in order to meet the minimum free-float

   and shareholder spread requirements as prescribed by the Listings Requirements.


The proceeds received by Balwin pursuant to the Offer will be used to restructure Balwin’s statement of financial

position by:


– settling the Debt Facilities; and

– providing the Company with added balance sheet capacity for future land acquisitions and development activities.


This Abridged Pre-listing Statement contains the salient features of the Company, the Listing and the Offer and as such

is not comprehensive. For a full appreciation of the Company, the Listing and the Offer, the Pre-listing Statement

should be read in its entirety.


2. INTRODUCTION


The JSE has granted Balwin a listing in respect of up to 483,835,710 Ordinary Shares in the “Real estate holding and

development” sector of the main board of the JSE under the abbreviated name “Balwin”, symbol “BWN” and ISIN:

ZAE000209532, subject to the fulfilment of the conditions precedent set out in the “The Offer” paragraph of this

Abridged Pre-listing statement (refer paragraph 1, above).


The financial year end of the Company is 28 February each calendar year.


3. SUMMARY OF KEY INVESTMENT HIGHLIGHTS


Key investment highlights include:


– Large South African sectional title homebuilder focusing on the lower to middle income population group

  (R599,999 – R1,699,000);

– Focus on large-scale, secure, lifestyle, affordable, residential estates (500 – 1,000 homes per estate) for the target

  income group;

– Strong brand and track record;

– Significantly risk-insulated business model;

– In addition to its current build to sell model, plans have commenced to develop a rental portfolio of R2 billion to R3

  billion by 2020 (12% – 15% first year development yield);

– Specialist turnkey operator controlling the entire value chain. All management is internal;

– National footprint with significant growth prospects;

– Annual profits after tax in excess of R500 million;

– Projected annual Profit After Taxation growth to 28 February 2017 greater than 25%;

– Target annual Profit After Taxation growth post FY2017 in excess of 15% per annum;

– Well positioned to capitalise on the significant demand (within the target pricing range of R599,999 to R1,699,000)

  in a growing residential sector;

– 8 year secured project pipeline in desired nodes, and negotiation on additional land parcels for 15,000 units in

  Kyalami ongoing;

– Market capitalisation on listing of R4.2 billion – R4.7 billion;

– 48% free float;

– Projected immediate dividend yield of 3.5% to 4.0%;

– Listing price for the private placement between R8.51 and R9.88 per share equivalent to a forward P/E ratio to

  28 February 2016 of 7.5x – 8.5x;


4. OVERVIEW OF BUSINESS


Balwin is a specialist, niche, national large-scale, turnkey, sectional-title, residential property builder and developer

(typically between 500 – 1,000 sectional-title residential units per development) targeting high-density, high-growth

metropolitan areas in South Africa.


Balwin estates offer secure, affordable, high-quality, environmentally friendly and conveniently located 1, 2 and 3


bedroom sectional-title residential units which range in size from 45m(2) – 120m(2) and in price from R599,999 –

R1,699,000 per unit (including modern fitted kitchen appliances) within the normal operating model. Units are designed

to appeal to a wide range of home buyers, including first-time, move-up, active adult, young professional, young family,

older family, retirees as well as buy-to-let. All larger estates (comprising 500 units and above only, such as

Greenstone Ridge, The William, De Velde, etc.) also have a lifestyle centre with well-established concierge and other

all-inclusive value added services including a spa, restaurant, gym, squash court, action sports field, games room,

movie theatre, heated swimming pools, playgrounds and free wi-fi within lifestyle centres, which affords the Company a

broad appeal amongst buyers.


All residential estates are developed and marketed under the Balwin brand.


Founded in 1996, the Company commenced large-scale operations in 2005 and has successfully developed, marketed

and sold over 70 residential estates, as outlined in the table below:


                                                Number of homes sold up to the

Node                        Number of estates            Last Practicable Date

Gauteng

Johannesburg North                        17                             3,712

Johannesburg East                          13                             4,406

Johannesburg South                        39                             4,038

Western Cape                                 1                               1,210

Pretoria                                          1                               136

                    Total                          71                             13,502


Key differentiators in Balwin’s build-to-sell model comprise the ability to deliver a superior offering through economies of

scale, in-house turnkey development including construction and construction management, focus within a defined

middle-income market segment, quality, broad market appeal, partnerships with relevant stakeholders and competitive

pricing of developed units in-line or below market.


Product offering


Balwin currently develops and sells between 1,750 to 2,000 sectional-title residential units per year, but has the ability

to increase its development capacity to approximately 3,000 sectional-title residential units per year based on its

existing infrastructure and owned undeveloped land pipeline.


All Balwin estates are built to a standard specification (unique Balwin design, standard finishes, no customer changes),

typically not more than 4 storey blocks with 10 homes per block (3 bedroom units on the ground and first floors, and 1

and 2 bedroom units on the upper floors) enabling the Company to benefit from significant economies of scale.

Residential estates are built and marketed in phases (between 50 – 100 units), allowing for appropriate risk

management at all stages of the development process.


Balwin has an existing secured development pipeline of approximately 17,028 residential units to be constructed over

an approximate 8 years.


Vertical value-chain integration


Balwin has highly skilled and experienced internal teams, with specialised skills across all stages of large-scale

residential property development and project management. The services performed in-house include, inter alia:


– land sourcing and acquisition, including detailed pre-feasibility studies;

– project planning;

– pre-sales and marketing;

– construction and construction management;

– health, safety and protection of the environment; and

– ongoing maintenance.


5. SUMMARY OF GROWTH STRATEGY


– Completion of the Company’s 8 year secured development pipeline (approximately 17,028 Balwin homes);

– Acquire/secure land for future development in order to maintain and grow its secured development pipeline

  beyond its existing approximately 8 year time horizon (discussions underway for the acquisition of an additional

  land parcel in the Kyalami node, on which a further 15,000 sectional-title residential units may be developed);

– Expand into other growing nodes, including Durban, Nelspruit, Bloemfontein, Port Elizabeth, Polokwane, East

  London, etc;

– Retain some development stock as rental portfolio (current target of 2,000 – 3,000 units by 2020 with an

  approximate value of R2 billion – R3 billion);

– Complimentary partnerships with other property companies and commercial developers to provide a complete

  offering and facilitate the development of newly established residential nodes;

– Development of government-owned land;

– Implementation of appropriate black economic empowerment initiatives;

– Acquire additional people, skills and expertise.


6. SALIENT FINANCIAL INFORMATION


For the financial year ending 28 February 2016, Balwin has already sold and transferred 763 residential units and is

well on course to achieve its target of 1,857 sale sectional-title residential units by the end of the current financial year.

Of the remaining 1,094 sectional-title residential units to achieve its FY2016 target, 932 have already been secured via

pre-sales (pre-sales represent signed purchase agreements for which the purchaser has already paid his/her deposit).


Pursuant to the above, Balwin’s target sales for the financial year ended 28 February 2016 are already 91% secured

(through the aggregate of completed units that have already been transferred to their respective buyers and pre-sales).

Similarly, target sales for the financial year ending 28 February 2017 are 45% secured.


The following represents summary financial data as of and for the financial years ended 28 February 2013 – 2017:


                                                                           Forecast    Forecast

28 February                                         2013(1)   2014    2015       2016(2)     2017


Homes sold (units)                                  404        762     1,655       1,857       2,377

Homes sold revenue (R million)                 348        734     1,355       1,888       2,495

Average sales price per unit (R thousand)   862        963       819       1,017       1,050

Profit after taxation (R million)                    77        180       335         549         698

Total comprehensive income (R million)       74        175       342         549         698

Gross Profit Margin achieved                 35.6%      35.5%   35.9%     42.6%     41.3%

EPS (cents)(3)                                          19         45        84         116         148

Dividend yield(4)                                      –           –         3.1%      3.5%        4.5%


Notes:

1. Adjusted for an extraordinary loss of R118 million on the tax-efficient sale of land that was incurred during the financial year ending 28 February 2013;

these metrics have been calculated excluding the impact of this loss.

2. The forecasts for the financial year ending 28 February 2016 exclude R8.15 million in expensed once-off Listing costs (pre-tax) in order to disclose

profits on a sustainable basis.

3. Pro forma assuming 400,000,000 shares in issue pre-Listing and assuming a primary capital raise of 72,192,592 shares on Listing.

4. Pro forma assuming listing at a forward price earnings multiple to FY2016 of 8.5x and a Listing Price of R9.88.


7. DIRECTORS


                                                                                     Date of appointment

Name (age)             Business address                     Position                 as Director and term

                                                                                     of office


Stephen Volker         Block 1, Townsend Office Park, 1     CEO / executive          14/11/2003;

Brookes (50)           Townsend Avenue, Bedfordview, 2007   Director                 appointment confirmed

                                                                                     every three years


Jonathan Weltman       Block 1, Townsend Office Park, 1     CFO / executive          01/08/2014;

(35)                   Townsend Avenue, Bedfordview, 2007   Director                 appointment confirmed

                                                                                     every three years                                                                                   


Hilton Saven (62)      Mazars House, Century City, Cape     Chairman, independent    21/09/2015;

                       Town, 7441                           non-executive Director   appointment confirmed

                                                                                     every three years                                                                                   


Rex Tomlinson (52)     356 Rivonia Boulevard, Rivonia,      Independent non-         21/09/2015;

                       Sandton, 2158                        executive Director       appointment confirmed

                                                                                     every three years                                                                                 


Basani Maluleke (38)   3 Glenhove Road, Melrose Estate      Independent non-         25/09/2015;

                                                            executive Director       appointment confirmed

                                                                                     every three years


Kholeka Mzondeki       547 Plover Place, Cedar Boulevard,   Independent non-         25/09/2015;

(48)                   Broadacres                           exeutive Director        appointment confirmed

                                                                                     every three years


Ronen Zekry (36)       First Floor, 30 Melrose Boulevard,   Non-executive Director   21/09/2015;

                       Melrose Arch                                                  appointment confirmed

                                                                                     every three years


8.   IMPORTANT DATES AND TIMES


All dates and times referred to in this Abridged Pre-listing Statement are times in South Africa. The dates and times in

this Abridged Pre-listing Statement are subject to change and any such changes will be released on SENS.


                                                                                                          2015

Opening date of the Offer at 09:00 on                                                      Thursday, 1 October

Closing Date of the Offer at 17:00 on                                                      Thursday, 8 October

Publication date of the final Offer Price and final number of Offer Shares released on

SENS on                                                                                                Friday, 9 October         


Payment date for allocated Balwin shares on                                               Tuesday, 13 October

Listing Date on                                                                                        Thursday, 15 October


9.   COPIES OF THE PRE-LISTING STATEMENT


The Pre-listing Statement is available in English only. Copies of the Pre-listing Statement may be obtained during

normal business hours from Monday, 5 October 2015 from:


– Balwin Properties Limited, Block 1, Townsend Office Park, 1 Townsend Avenue, Bedfordview, 2007;

– Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001;

– Investec Corporate Finance, a division of Investec Bank Limited, 2nd Floor, 100 Grayston Drive, Sandown,

  Sandton, 2196; and

– Balwin’s website: www.balwin.co.za.


10. CONTACT DETAILS


Contact person                                       E-mail      Telephone

Tomi Amosun                          [email protected]   011 291 3269

Marc Green                            [email protected]   011 291 3389

Carlyle Whittaker          [email protected]   011 286 4741


2 October 2015

Johannesburg


Investment Bank, Bookrunner and Sponsor

The Corporate Finance division of Investec Bank Limited


Company Secretary

CIS Company Secretaries Proprietary Limited (represented by Neville Toerien)


Transfer Secretaries

Computershare Investor Services Proprietary Limited


Legal Advisors

Edward Nathan Sonnenbergs Incorporated and Brian Kahn Incorporated


Independent Reporting Accountants and Auditors

Deloitte and Touche Registered Auditors


Communications Advisor

Instinctif Partners SA Proprietary Limited


Conveyancing Attorneys

Tonkin Clacey Incorporated and Smith Tabata Buchanan Boyes Incorporated


Independent Valuer

Peter Parfitt, Quadrant Properties Proprietary Limited
« Last Edit: October 02, 2015, 05:38:31 pm by Fawkes85 »

tmsf12

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Re: Balwin Properties
« Reply #5 on: October 05, 2015, 11:08:28 am »
Thanks Fawkes85.

Quote
The Pre-listing Statement of Balwin dated 1 October 2015 is not an invitation to the public to subscribe for Ordinary
Shares in Balwin

Does this mean that the public can only buy shares once they are listed on the 15th of October? 
Of the recent new listings, this looks more attractive than Sygnia.