Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.A penthouse going for R80 million, and more than 5 000 apartments — all in one development. That’s a big price tag for Gauteng .
He attributed the decline in earnings and stock price to several factors, including the poor economy, rising living costs, high interest rates and other macroeconomic issues beyond the company’s control. President Cyril Ramaphosa was present for the unveiling of this development circa 2020. At the time, Brookes said the company planned to achieve a market capitalisation of R10 billion within five years. It’s been almost five years, and Balwin Properties’ market capitalisation today is R1.3 billion.
Koshiek Karan, a former investment banker with listed real estate deal experience, says that when interest rates were low, many people bought units in Balwin Properties developments. They barely qualified for these home loans, and when the cost of living went up, the interest rates went back up, and now they can’t afford the monthly payments of their real estate investment.
Regarding the Munyaka development, of the 5 020 apartments planned, 3 705 remain unsold. This raises concerns when it comes to the demand for apartments in these mass compound-style complexes. While the group’s loan-to-value ratio did decline marginally to 40.2% in its most recent interim results, it remains elevated. Property companies should try to keep their LTV ratio between 35% to 40%. Therefore, this is a fairly precarious situation, given that the company has a significant amount of unsold stock and high vacancies.