Balwin Properties, developer of apartment estates such as De-Aanzicht estate.in Milnerton, Cape Town, is considering an offer to delist from the JSE, and partner with the Public Investment Corporation on its next growth phase.
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“The PIC (Public Investment Corporation) needed a home builder, there is a (large) number of people who need homes and we were a good investment case,” is how Balwin Properties founder and CEO Steve Brookes described the initial approach by the government pension fund's asset manager.
Business Report interviewed Brookes on Wednesday after JSE-listed Balwin Properties announced it had received a R1.21 billion offer from a consortium of founding investors and the PIC, to acquire all the shares in Balwin for R4.35 a share in cash.
Brookes said the PIC approached them about a potential investment, and if the scheme of arrangement was implemented, the PIC would hold about 49% of Balwin in the private ownership structure, a percentage that might increase further as a black empowerment component still needed to be bedded down.
Shareholders holding 63.5% of the shares have undertaken to support the buyout offer that will see Balwin delisted from the JSE and A2X. The offer values Balwin’s shares at about R2.26bn and gives eligible shareholders opportunity to realise cash value at a premium to recent trading levels, he said.
The consortium believes private ownership, supported by long-term institutional capital from the PIC, continued founder-management reinvestment and the participation of other significant existing shareholders, will provide a more appropriate ownership structure for Balwin’s next phase.
The consortium intends to leverage its capital resources, strategic networks and developmental focus to support Balwin’s growth objectives, while realising cost savings attributable to the delisting.
“Private ownership will better align Balwin’s funding base with the long-term nature of our development pipeline,” Brookes said.
“With the support of the PIC, founder-management and our reinvesting shareholders, we believe Balwin will have the capital stability and strategic support required to strengthen its market position and continue delivering high-quality, environmentally efficient residential developments.”
The PIC’s participation, on behalf of the Government Employee Pension Fund (GEPF), brings long-term domestic pension capital into a residential development platform with established scale in South Africa. The PIC acts as asset manager for the GEPF and invests funds on behalf of the fund in line with client mandates.
The investment is aligned with the long-term nature of pension capital and Balwin’s long-dated residential development model. It is also consistent with the PIC’s broader developmental-investment mandate focused on having developmental impact, including job creation and enterprise development.
This is particularly relevant for a residential development business whose performance is closely linked to the interest-rate cycle, mortgage affordability and multi-year development delivery, where long-term capital can support the business through cycles rather than requiring short-term market rerating.
Brookes said Balwin had launched other initiatives as a hedge against the interest rate cycle and the long-term nature of property development, such as annuity type project income and rental developments, but these still represented only a small part of the business and would continue to be grown.
Balwin’s market capitalisation was R2.05bn on the JSE Wednesday morning. The share price moved up 4.7% to R3.98 in early trade Wednesday following the announcement, indicating shareholders view the offer positively. The share has also increased by over 91% over a year.
The offer price represents a premium of 41% to Balwin’s volume weighted average price over the 180 trading days prior to the announcement.
The bidding consortium comprises the PIC, acting on behalf of the Government Employees Pension Fund (GEPF), and entities related to the founder investors of Balwin, including Brookes, Balwin MD, Rodney Gray, as well as GRE Africa, related to Buffet Investments.
These interests don't vote on the scheme of arrangement and will not receive cash for their Balwin shares under the scheme, but will remain invested alongside the PIC through the proposed private ownership structure.
“This transaction brings together long-term domestic institutional capital from the PIC, with the continued commitment of Balwin’s founder-management and other significant existing shareholders,” said Brookes.
“Importantly, management and the reinvesting shareholders are not taking cash out of the transaction. They remain invested alongside the PIC because they believe in Balwin’s platform, its development pipeline and its long-term prospects.”
Balwin’s reported NAV (which was 976.89 cents per share by February 28, 2026), remains well above the offer price, but Brookes, said that NAV was embedded in a long-dated development platform, where value was realised through land development, construction, sales, bond approvals, transfers and cash collection, rather than being immediately available as distributable cash.
He said Balwin listed on the JSE in 2015 to enhance its ability to raise debt and equity finance and to provide shareholders with access to a platform on which Balwin shares could be traded.
However, the bidding consortium believed that the listing was no longer as compelling, given the limited liquidity in Balwin shares, the discount to underlying NAV at which the shares had traded, and the costs associated with maintaining a listed-company structure.
“Balwin’s business is long-dated, capital-intensive and sensitive to the interest rate cycle, which affects affordability, mortgage appetite, buyer conversion and the pace at which sales translate into cash,” said Brookes.
“Its residential development model involves long cash-conversion cycles, multi-year inventory build-up, ongoing working-capital requirements, municipal dependencies, infrastructure constraints and input-cost volatility. These factors can introduce timing and margin variability and are not always well matched to public-market valuation cycles.”
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