R84 billion smart city being built in South Africa’s richest province

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29-10-2025
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Business Tech
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Balwin Properties’ latest interim results have given insights into the group’s new R84 billion Mooikloof Smart City in Gauteng, with the group starting to spend big on the development.

Mooikloof Smart City was announced in 2020 as one of the government’s Strategic Integrated Projects (SIPs).

The development had a total project value of over R84 billion and was one of the 62 SIPs gazetted in 2020.

Balwin Properties is developing over 14,000 residential units in the smart city, which is set to house residents in the East of Tshwane.

It said the development will meet high environmental standards and include energy-efficient appliances, water-saving equipment, and insulation to minimise temperature fluctuations.

In its latest interim results for the six months ending 31 August 2025, the group said it recorded an increase in developments under construction.

Elevated construction and development costs primarily drove this as it gears up for increased activity and the next phase of infrastructure required for Mooikloof Smart City.

A significant contributor to the increase in capitalised development costs is the next phase of infrastructure required for the Mooikloof Smart City node.

While the Department of Works is supposed to focus on infrastructure, the JSE-listed company spent heavily on infrastructure during the period.

This included extensive road upgrades, storm water solutions, water capacity and electrical infrastructure. In total, R71.3 million was invested in infrastructure in the six months.

In the prior period, Balwin also disposed of a land parcel at Mooikloof Smart City to develop a shopping centre.

No land sales took place in the current period, with the group remaining committed to selling land parcels for development to complementary amenities.

This includes retirement developments, schools, fuel stations, and retail facilities.

Earlier this year, the development received a massive boost after the International Finance Corporation (IFC) gave the development a R1 billion ($58 million) facility.

Cláudia Conceição, IFC’s Regional Director for Southern Africa, said the investment will help expand access to quality housing for low and middle-income households.

Results

Balwin said that its results for the six months ended 31 August 2025 reflected improved macroeconomic conditions in South Africa.

Although global trade risks and weak GDP growth prevailed, the moderation of inflationary pressures and a cautious easing of interest rates by 50 basis points have supported consumer demand.

The improved environment has also led to a moderation of inflationary pressures and a cautious easing of interest rates of 50 basis points.

This has supported consumer demand, enhanced loan affordability, and stimulated increased investment in fixed property.

The market improvement has led to a more supportive environment for residential property development.

Group revenue totalled R1.2 billion, an increase of 44% from the prior interim period, reflecting the improved residential housing market conditions.

Group revenue was driven by a 51% increase in apartment sales to R1.1 billion, owing to a 45% rise in apartment handover to 928.

That said, the group recorded a slight decline in gross margin to 29%, primarly due to the absence of land sales in the current period.

The gross margin from apartment sales remained steady at 23%, which was underpinned by strong profitability at Balwin Annuity.

The group added that tight cost control contributed to a 35% increase in group operating profit.

The group’s total profit saw an increase of 33% to R102.4 million.

Nevertheless, the group did not declare an interim dividend, with its priority remaining the prudent allocation of capital towards reducing the group’s debt exposure.

Metric	Result / Value	Change / Increase
Revenue	R1.2 billion	↑ 44%
Profit for the period	R102.4 million	↑ 33%
Earnings per share (EPS)	20.91 cents per share	↑ 28%
Headline earnings per share (HEPS)	20.91 cents per share	↑ 29%
Net asset value per share (NAV)	946.03 cents per share	↑ 8%