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New development in Sandton for first-time home buyers

Apartments in the richest square mile in Africa starting from R799 000 – Balwin Properties is turning the idea into a reality: CEO Steve Brookes.

SUREN NAIDOO: South Africa’s largest sectional-title developer, Balwin Properties, is a significant player in the first-time home buyers’ market. Generally seen as involving homes below the R1 million mark, this sector of the market is booming right now with interest rates at more than four-decade lows. Joining us now is Steve Brookes, CEO of JSE-listed Balwin Properties, to tell us more. Welcome, Steve.

STEVE BROOKES: Hi Suren, hi listeners.

SUREN NAIDOO: Steve, from Balwin’s side, how is the group paving the way for first-time home buyers wanting to buy homes below R1 million? You have quite a few developments that target the sector.

SUREN NAIDOO: Yes. Just some breaking news – yesterday we won six international property awards, and the proudest one was for our green brand, Greenlee. We won a five-star Best in South Africa for Social Housing, of which we are extremely proud. And that green brand is being created for the market sector between R499 000 and R999 000. So we stretch it up to just under a million, and that market is absolutely buoyant. As I’ve said on numerous occasions, it’s my contribution to eradicating the past of apartheid and also to give first-time homeowners title and [to] create wealth. I think it’s a fantastic honour to be able to do that in the country.

SUREN NAIDOO: Where are you seeing the biggest demand? Is it below R800 000 or does it extend right up to R1 million?

STEVE BROOKES: Our latest offering, in the heart of Sandton within a couple of steps of the Gautrain, is called Wedgewood. We’ve got 75% of our apartments below R1.2 million. The response so far has been from over 1 000 applicants already. So we believe that the market up to R1.2, R1.5 million is first-time homeowners.

It’s a simple function of good design, good offering and a very, very low interest rate, thanks to our Reserve Bank.

SUREN NAIDOO: Sandton – how big is that development?

STEVE BROOKES: Sandton is Balwin’s first offering in high-rise. It comprises 1 340 apartments in the heart of the golden mile, or the richest square mile in Africa, right opposite the Gautrain station on Rivonia Road. A super, super, sexy design. Lots of amenities. We’ve got the best gym in the country. We’ve got Motherland Coffee coming in there. We’ve got a laundromat, a swimming pool, side-to-side soccer fields, and it’s starting at R799 000, all the way up to the penthouses at R8 million.

SUREN NAIDOO: Sandton is the big news story. You also have developments in Waterfall, Ballito, and Mooikloof, which was launched by the president last month. These are prime areas. Tell us what makes this business – how you make it work, to get people able to afford buying into these areas?

STEVE BROOKES: We’ve got a 25-year track record, which is quite a long track record. Most development companies don’t last that long. So we’ve got longevity in the company, and deep management experience.

Then the second layer is that we employ the best of the best architects.

And then the final real magic in the whole thing is to create incredibly good cross-engineering with all our suppliers and our contractors and our professional teams.

And then, finally we make sure that we bring in all our green branding, which means we are the highest-rated developments in Africa from a green point of view. Every apartment is edge-certified, and our lifestyle centres, due to my German stubbornness, are all six-star graded. And that is one hell of an achievement – to get the lifestyle centres six-star graded.

And then we also add in the final hurdle, which is Balwin Parks. I’m fighting continually for as much green space as possible on a development. So, in culmination, add all those factors up, plus obviously low interest rates, plus tremendous support from all the financial institutions.

We set a record last month of 921 sales for our little company, of which we’re very proud,

SUREN NAIDOO: Great to hear in this market, Steve. Just in terms of green, I know you’ve spoken a lot about it already, but Balwin has a partnership with Absa Bank, where buyers can also get a lower interest rate. Tell us a little bit more about that, because that also makes buying a home more affordable for first-time home buyers.

STEVE BROOKES: Yes. First, I’d just like to digress a little. I’d like to thank all our clients and people that follow the Balwin brand, because without them we wouldn’t be able to exist. So thank you for that.

And, secondly, I’m absolutely committed as the CEO of Balwin to greening. I was the first guy in the world to link a green building to a direct financial benefit to the clients. That was not just a building being more efficient – the client gets it.

I went to the IFC [International Finance Corporation] and Absa, and we’ve now got all the other banks to follow, and it looks like the trend is going to be the following:

Let’s say you come along, you buy from us and we get you a mortgage at prime, 7%, then we slap down our green certification. If you bank with a bank, you’ll get 0.5% below your rate.

If you don’t bank with a bank you’ll get 0.25%. So that is a healthy reduction in your interest rate over 20 years.

SUREN NAIDOO: Your Sandton development is the first high-rise, but you have a lot of lifestyle elements to most of your new developments. Tell us more, because it adds to the lure, with all the other offerings that you have on your estates, and now I suppose in Sandton as well.

STEVE BROOKES: Suren, sometimes I can be a little bit outspoken when the architects are designing and they’ve finished and we’ve got all the internals correct, and the building’s looking good, and we’ve got all our green. I will say to them, “What is sexy about this development?” And they all look at me as if I’ve lost my marbles. Now they’re starting to appreciate what I mean by that. It is what makes it a nice place to live.

At Wedgewood we’ve got fantastic amenities. We’ve got the best gym you’ve ever seen. We’ve even chiro techniques to repair injuries. We’ve got a walk-in fountain, which goes from hot to cold. We’ve got ice baths and hot jacuzzis, and then the usual weight-training area. We’ve got a heated swimming pool. We’ve got a five-a-side soccer netted area. We’ve got chess in honour of my late father, which I think is quite a nice little thing to do. We’ve got Motherland Coffee. I’ve got a 24-hour concierge for all the deliveries. We’ve got an Uber drop-off area. And, last but not least, we’ve got a full-service laundromat. That’s what I call the sexy parts of the building. So that really, really does make a difference for the first-time buyer.

SUREN NAIDOO: In total, what is the value of the Sandton development?

STEVE BROOKES: It’s exactly R1.63 billion.

SUREN NAIDOO: Just in terms of other lure factors for first-time home buyers, surely Balwin Properties will also be benefitting from the fact that when you’re buying into a new development you don’t pay transfer duty – which also makes it more affordable?

STEVE BROOKES: Yes, there’s no transfer duty and Balwin pays the bond cost, which makes it extremely attractive – not just for first-time buyers, but for anybody.

And then obviously there’s the Balwin magic, which is the stamp of the finishes. You know, we are fanatical in Balwin in creating good value and good products ergonomically well-designed with great finishes.

SUREN NAIDOO: Steve, are there any concluding thoughts before you go?

STEVE BROOKES: Yes, Suren, thank you. Just to say to be a home builder and to thank all our clients again is important. And I think it’s a helluva honour to try and create more housing in urban areas. If you listen to all the naturalists and environmentalists of this world, we’ve got to protect this earth of ours and we’ve got to look at living closer to our workplace without having to drive. I mean, some of our previously disadvantaged people are taking four taxi rides to get to work in the morning, which is really unbelievable. So, if they can live above where they work, I think it’s a helluva honour if we can do that.

And then, last but not least, we qualify in this market for our Flisp [Finance Linked Individual Subsidy Programme] allowance, which is a great incentive that government has provided, and we really, really welcome our clients to get these Flisp allowances.

SUREN NAIDOO: Can you give us more detail on that and how people can access it?

STEVE BROOKES: It’s what they call reverse ratchet. If you earn up to R24 000 a month, depending on what you buy, you get the cheaper apartment, and the less you earn you get more subsidy. The higher the (price of the) apartment you buy and the higher you earn you get a lot less subsidy. But I think you can get a R40 000/R50 000 deposit from Flisp, which goes a long way towards also improving your rate from the bank because you’ve got a deposit.

SUREN NAIDOO: Sounds great. A lot of work is being done by Balwin Properties in the inclusionary housing market. Thanks, Steve. That was Steve Brookes, CEO of JSE-listed Balwin Properties.

Brought to you by Balwin Properties.

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