Balwin Properties, SA’s specialist residential property developer, launched Munyaka, a R10bn lifestyle estate development at Waterfall City precinct in Midrand on Wednesday to meet demand for lock-up-and-go and secure living.
The company invested more than R100m in infrastructure in the node, including the upgrade of Mia Road.
Announced in 2020, Munyaka, comprising more than 5,000 apartments, will be completed in 2028. It is Balwin’s third development in Waterfall City.
Kikuyu, next to Munyaka is now complete, with about 500 apartments to be developed at The Polofields. Riverview and Africa Parks will bring the number of the company’s developments in the precinct to five. “Our success in sales in this climate of rising interest rates is proof that Balwin is a defendable stock in good and bad times. We can still deliver decent returns to investors,” CEO Steve Brookes told Business Day.
The JSE-listed group has a secondary listing on the A2X Markets. The company has developed more than 100,000 apartments in high-growth, key metropolitan areas in Johannesburg, Tshwane, the Western Cape and KwaZulu-Natal.
It has a 15-year development pipeline of more than 45,000 apartments across 27 developments in key areas.
For the six-months to end-August 2022, its revenue rose 20% to R1.6bn, with profit for the period rising 2% to R173m.
Revenue was boosted by sales of 1,360 apartments. Of these, 170 were sold in Munyaka — the highest since Greenbay in the Western Cape and Greencreek in Tshwane.
A further 1,551 apartments, not included in this revenue, were pre-sold for the future.
In a 12-month period from September 2021 to August 2022, group apartment sales averaged 262 a month.
Balwin said it continues to see strong demand for one- and two-bedroom apartments.
Metope CEO & portfolio manager Liliane Barnard said that real estate investment trusts (Reits), which own residential units within their larger portfolios, will benefit from diversification.
Residential-focused Reits including Transcend and Indluplace provide investors with a spread of residential assets, without the management hassle, but producing a healthy income yield. These portfolios are management intensive hence the higher costs, but vacancies are generally about 5% of the portfolio given normal tenant churn.
“In a rising interest rate and slower economic growth environment, renting rather than ownership may prevail, but the scope for Reits to drive rentals higher will be limited,” said Barnard. Rates and taxes, security costs and added investments into power and water solutions reduce profitability resulting in limited good income yield from residential assets — unless one is invested in Cape Town.
On completion Munyaka will feature 5,020 lifestyle apartments, two luxurious lagoon-front penthouses and a villa. The apartments come with free appliances with prepaid water and electricity meters.
Prices start from R989,900 for a one-bedroom apartment, and rise to about R75m for a six-bedroom penthouse apartment measuring more than 1,200m2.
First-time and youth buyers qualify for 10% discount with buyers also getting a reduction in their home loan rate due to Balwin’s greening efforts.
Brookes said that to date 5,312 green bonds have been secured for buyers with total savings of R389m over the duration of the loan.
Munyaka, which means crystal in Venda features one of the biggest lagoons in the southern hemisphere measuring 30,000m2 or 5.5 rugby fields. It is filled with 40-million litres of water which will be replenished from the Jukskei river through a comprehensive treatment plant, with alternative sustainable water solutions for the future.
Other amenities include a free gym facility, on-site concierge, restaurants, meeting rooms, a swimming pool, laundromats, cinema, wellness spa and non-motorised water activities like canoeing and paddle boarding.
Future developments around Munyaka include the proposed Waterfall Gautrain station, the extension of road infrastructure, a sports centre, schools, retail space of about 20,000m2 and a Radisson Red hotel. More than 4,000 jobs will be created when the project is fully completed in 2033.
Barnard said that Balwin’s developments are designed to ensure maximum utilisation of space, without compromising on quality and efficiency while still providing the developer with a decent margin.
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