Balwin Properties listed on the JSE in 2015 to make it easier to raise money and to give its shareholders somewhere to trade. Eleven years later its founders want it back. A consortium led by chief executive Steve Brookes, with the Public Investment Corporation buying on behalf of the Government Employees Pension Fund, is offering R4.35 a share in cash for everything it does not already own.
That is 40.95% more than Balwin's average traded price over the 180 days to 19 May. It is also less than half of what Balwin says its own assets are worth, which at the end of February was 976.89c a share. Brookes's answer to that gap is that the money is not sitting anywhere. It is tied up in a development pipeline that takes years to become finished flats, and matching your funding to that timeline is easier off a public market than on one.
Who owns what afterwards
Balwin has 519.4 million shares in issue and the consortium already holds 261.3 million, so the cash covers about 258 million. Holders of 63.51% of those have already agreed to accept or vote in favour. If it goes through, the pension fund ends up with 49.3% of the buying company and Brookes's vehicle with 33.6%, the JSE and A2X listings fall away, and nobody in the consortium takes money off the table. The scheme has until 17h00 on 20 November to meet or waive its conditions.
Why home builders keep going
Balwin is not leaving alone. Indluplace delisted in 2023, and Calgro M3 shut its construction division in 2020 and handed the work to contractors. Business Day's analysis puts the pressure at higher interest rates, slower demand for new homes and construction costs eating into margins.
The structural problem is who buys listed property in the first place. Garreth Elston of Golden Section Capital says the market is built for institutions that want predictable recurring payouts, which is not what a company that builds flats and sells them can offer. Analyst Ridwaan Loonat makes the same point from the other end: rent secured by a lease is easy to forecast, while a developer's income moves with consumer confidence, mortgage availability and interest rates. Elston's view is that the standalone listed residential experiment here has effectively ended, and that what is left of it on the JSE will sit inside the big diversified funds with balance sheets long enough to ride the cycle.
