R1.6bn gamble in Sandton

Balwin, which is noted for developing sectional-title complexes and sprawling lifestyle estates like The Blyde in Pretoria, Polofields in Waterfall and Paardevlei in Cape Town, traditionally offers apartments in buildings between three and 10 storeys high.

Just last month, the group got President Cyril Ramaphosa to officiate at the launch of its biggest development yet – the multi-billion-rand Mooi kloof Mega City, east of Pretoria.

However, Brookes did not make mention of Balwin’s high-rise ambitions at the event, nor during the release of the group’s interim results recently.

“Our new Wedgewood Sandton will be in one of the country’s most prime nodes, just 200 metres from the Gautrain Sandton Station.

“It is largely targeted at the first-time homebuyers’ market, allowing people to be able to access more affordable housing opportunities in a place like Sandton,” Brookes tells Moneyweb.

“We will see if the concept works. If successful, we have plans to roll out similar high-rise developments in other prime areas in Cape Town and Umhlanga in Durban.

“Like our other lifestyle developments, the Sandton project will include a range of supporting facilities like a laundromat, world-class gym, coffee shop and action football area,” he adds.

With more than 1 300 units planned, the development will be home to predominately ‘micro apartments’ of between 33m² (studio) to 55m² (two-bedroom).

However, Brookes prefers to call the units ‘lifestyle apartments’ considering the amenities Wedgewood Sandton will offer on-site.

“There will also be penthouse units available, so this is quite an inclusive development.… The smaller apartments will all have balconies too. It is going to be a ground-breaking development for Sandton,” he says.

He notes that with SA’s interest rates being at a multi-decade low, the residential property market is buoyant, despite the impact of the Covid-19 lockdown and consumers being under pressure as a result of job losses.

“The housing market is doing particularly well below the R1 million mark, where a lot of first-time owners enter the market,” says Brookes.

“Despite Covid-19, Balwin clocked up over 900 sales for its half-year. Wedgewood Sandton, which is offering entry-level apartments for R799 000, already has over 1 000 people registered pre-launch, so we are pretty confident about the project.”

Brookes says Balwin purchased the development site, located at 144 Rivonia Road between Mushroom Park and the Radisson Gautrain Hotel, from JSE-listed Fortress Reit Limited.

The group has brought in private construction company Barrows as lead contractor on the project.

Worth noting is that Barrows is the joint-venture developer of a mixed-use development in Waterfall City together with Attacq, which includes a new Courtyard Hotel to be operated by JSE-listed City Lodge Hotel Group.

Attacq and another joint-venture partner, TriColt, are also building the first high-rise residential development at Waterfall City, which is competing with Sandton Central as a new commercial hub.

Attacq and TriColt have appointed Barrows as the lead contractor on that project too.

This article first appeared on Moneyweb and was republished with permission.

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