Ash Müller@Askash
Balwin Properties has received a R2.26 billion buyout offer💰
The offer comes from a consortium led by the PIC, acting on behalf of the GEPF, alongside CEO Stephen Brookes and MD Rodney Gray.
Two years ago, I wrote a piece for the Mail & Guardian asking whether Balwin was too bold for the South African market and why they should delist. Today, that question has a definitive answer.
The offer is R4.35 per share - a 41% premium to the six-month volume-weighted average price. If approved, Balwin delists from both the JSE and A2X, ending a public market run that began in 2015.
In my December 2024 M&G article, I raised concerns that now feel prescient. Profits had dropped 57%, and revenue was down 28% in the interim results to August 2024. The loan-to-value ratio was above the comfortable range. Dividends had been suspended. Munyaka had 3,705 of 5,020 apartments unsold. The share price had fallen from roughly R10 at listing to R2.30.
The full-year results to February 2026, released just before the announcement, show genuine recovery, but also why that recovery cannot solve the structural problem.
Revenue grew 21% to R2.7 billion. Apartment handovers increased 17% to 2 053 units. Recurring profit grew 36% to R273.6 million. The loan-to-value ratio improved to 38.1%, finally within the target range. These are not the numbers of a distressed business.
And yet the board declared no dividend for the 2nd consecutive year.
That single fact captures everything about why Balwin and the JSE were always a difficult fit. Property investors expect income. Balwin’s model: long cash-conversion cycles, multi-year inventory build-up, heavy infrastructure investment, makes consistent dividends structurally difficult regardless of how well the underlying business performs.
The geographic picture in the results is also telling. The Western Cape now accounts for 54% of apartment sales revenue, up 47% to R1.3 billion. Gauteng, despite 11 active developments, contributed just 39%, with revenue growing only 2%.
The results explicitly note a change toward rental preference over ownership in Gauteng. Meanwhile, across the full build-to-sell portfolio of 41,226 planned apartments, 25,056 remain unsold. In Tshwane alone, 11 751 apartments are unsold, a node where Balwin invested R120.6 million in infrastructure.
This is a business making long-dated bets that the public market has neither the patience nor the appetite to back.
The tangible net asset value per share as at February 2026 was R9.72, more than double the offer price of R4.35. That gap between what the business is worth on paper and what the market has been willing to pay is the clearest possible argument for going private. The PIC and GEPF can absorb a 15-year pipeline and a 7 700-apartment rental pipeline on land already owned by the group. Public market shareholders cannot.
My view is the same as it was 2 years ago, just more certain. This is the right move, and it should have happened sooner.
