Balwin Bounces Back: Rate cuts fuel profit surge and annuity growth

Interest rate cuts and leaner operations have reignited demand and boosted profitability at Balwin Properties, setting up a strong second half in FY2025.

Key Takeaways:

• Three rate cuts sparked a strong rebound in demand and boosted profit by 8% to R234 million.
• Balwin Annuity revenue jumped 33%, with net profit more than doubling to R43.2 million.
• 1 465 green bonds secured for clients, saving R98.8 million over 20 years.

JSE-listed residential developer Balwin Properties has reported a robust performance for the year ended February 2025, with a clear upswing in the second half thanks to three consecutive interest rate cuts and a strong showing from its annuity income streams.

Despite a 6% dip in annual revenue to R2.2 billion, profit for the year rose 8% to R234 million, supported by strategic cost-cutting and the continued expansion of the company’s Balwin Annuity division.

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“The year was a tale of two halves,” said CEO Steve Brookes, “with profitability recovering strongly in the second six months, driven by interest rate cuts and operational efficiencies.”

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Apartment handovers declined year-on-year to 1 749 units, down from 1 892, but the company saw a promising increase in pre-sold units, rising to 814 from 520 a sign of renewed buyer confidence amid lower interest rates.

The Balwin Annuity business, which includes Balwin Fibre, Balwin Connect, solar infrastructure, mortgages and head office operations, continues to shine. Revenue jumped 33% to R178 million, and net profit after tax doubled to R43.2 million. Fibre and Connect alone contributed R69.2 million in revenue and R10.5 million in net profit.

Balwin also made headway in green finance, securing 1 465 green bonds for homebuyers. These are expected to save a combined R98.8 million in interest over 20 years.

Gross profit margin improved to 30% (up from 28%), and operating costs remained flat, despite increased annuity activity. The company ended the year with R254.8 million in cash and maintained a steady loan-to-value ratio of 40.4%.

Western Cape demand remains strong, with 99% of units brought to market recognised in revenue. Gauteng rebounded to lead revenue contribution after construction resumed at The Whisken in Kyalami.

On the sustainability front, Balwin continues to lead, with 27 162 EDGE-certified apartments, 19 722 of which are EDGE Advanced (40%+ energy savings). The group also holds 12 Net Zero certifications, including its head office and 11 lifestyle centres.

Looking ahead, Brookes remains optimistic:

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“We’re emerging leaner and more focused from this cycle. With further interest rate cuts, we expect to see continued recovery in demand. Our strategy is clear: grow annuity income, manage debt smartly, and unlock capital through non-core land sales.”

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As Balwin sharpens its focus on high-demand regions, sustainable development, and annuity income, it remains one of South Africa’s most resilient and forward-looking property groups.‍