Balwin Properties (Balwin), a Johannesburg-based residential property developer led by South African businessman Stephen Brookes, missed investor expectations, showing a large decrease in both revenue and profit for the fiscal year ending February 29, 2024.
The company’s 2024 annual report shows a 29.17% year-over-year sales reduction from R3.33 billion ($183.05 million) to R2.36 billion ($129.64 million). This reduction underscores a difficult year for Balwin, as South Africa’s domestic housing market faces rising interest rates and inflationary pressures. Balwin attributes the lower revenue to the slowdown.
Balwin’s profitability reflected the challenging market conditions. Operating profit fell by 44.19 percent, from R592.75 million ($32.63 million) to R330.81 million ($18.21 million). Higher finance expenses weighed on income, resulting in a net profit of R218.8 million ($12.04 million), down from R436.9 million ($24.05 million) in 2023.
Balwin CEO Stephen Brookes stressed the impact of the challenging South African economic environment on the property sector. “The pressure on consumer spending from sustained high interest rates and above-inflationary living cost increases has translated into reduced demand for apartments, owing to the lack of affordability of loans,” Brooks stated.
As a result, the number of flats recognized in revenue decreased by 32% year on year to 1,892 units. Gauteng, the company’s traditional heartland, saw the greatest sales reduction, with revenue falling 47 percent. Despite this, Brooks maintained confidence in Gauteng’s long-term demand, anticipating it to strengthen when the market recovers.
Balwin is a large-scale developer that caters to South Africa’s low- and middle-income populations. The company provides high-quality, ecologically sustainable, and economical apartments, as well as a unique lifestyle program for its tenants.
Stephen Brookes, a South African real estate entrepreneur who founded Balwin Properties in 1996, is the company’s largest stakeholder, with a 36.08 percent interest.
