Balwin says residential demand remains strong

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Balwin says residential demand remains strong

Published Date: 2020-03-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Balwin says residential demand remains strong

The residential property developer says it is keeping a close watch on the Covid-19 virus despite strong demand for its lifestyle apartments.

Balwin Properties says it has continued to experience strong demand for its lifestyle apartments despite ongoing economic headwinds and increasing pressure on consumers. Demand for one and two-bedroom apartments has been particularly strong, making up almost three quarters of the 2,700 apartments sold last year.

The sectional title residential property developer says it responded to ongoing depressed economic conditions by increasing its marketing campaigns to clients. While helping to drive sales, these campaigns contributed to an approximate 5% reduction in the average selling price of apartments.

An 11% rise in the number of apartments it recognised in revenue for the year to end-February resulted in a 11% improvement in revenue for the year. Cash on hand is expected to improve to R475 million, up from R150 million, due to its continued focus on cash management. It expects earnings and headline earnings per share for the year to decline by between 6% and 11% over the prior year's 95.82c.

The group said its gross margin was likely to show a slight increase from the interim period to end-August but would be down on last year. That's due to the inclusion of its elite model and Green product developments. Excluding these developments, it said the margin of its core business model remained steady at around 32%.

Balwin said it had pre-sold 570 apartments, which aren't included in its 2020 revenue, with strong sales in the early part of March. It said this was primarily due to the launch of Munyaka, its new flagship development in Waterfall. Month to date, it's sold more than 550 apartments totalling R850 million.

It said its board remained apprehensive about the prevailing macroeconomic climate and policy uncertainty and continued to place an emphasis on managing its cash and keeping costs down.

Its shares rose 1.9% to R.275 yesterday.





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