The South African landlord that is being sold to the government 

Balwin believes its proposed takeover by a consortium backed by the Public Investment Corporation (PIC) could be the best outcome for shareholders.

This is because the company’s shares had struggled with limited liquidity and traded at a significant discount to its net asset value (NAV) for nearly a decade before this offer came around.

One analyst shares this view, telling Daily Investor that while Balwin has a great business model, it has always been undervalued or misunderstood by investors in the listed property sector.

These comments follow the announcement on 20 May 2026 that the PIC is in talks to buy out Balwin’s minority shareholders.

Founded in 1996, Balwin is South Africa’s largest housing developer, currently building about 3,000 houses a year, mostly in the affordable segment of the market.

It has been listed on the JSE since 2015, debuting on the bourse with a share price of R10.25. 

In the years since, Balwin has seen significant operational and physical growth, with its total assets having risen from around R1.48 billion in 2015 to over R8.3 billion today.

However, the company’s share price has not reflected this growth, with Balwin shares now trading at around R4.20 – down nearly 60% since listing.

This means the company’s shares have traded at a significant discount to Balwin’s NAV, which stood at R9.77 per share by the end of its 2026 financial year.

At the same time, the company struggled with limited liquidity on the JSE, seeing extremely low daily trading volumes.

This is partially due to the high concentration of closely held shares, with founders Stephen Brookes and Rodney Gray owning significant blocks of the company.

In 2025, Brookes, through Volker Holdings, held 33.1% of the company’s issued shares, Gray, through Rodna Investments, held 9.4%.

Therefore, despite its impressive operational and physical growth over the past decade, Balwin’s shareholders were unable to fully capitalise on it.

The graph below shows Balwin’s share price performance and NAV per share growth since its listing.

The PIC steps in

On 20 May, Balwin announced that a consortium backed by the PIC, acting on behalf of the Government Employees Pension Fund, and Balwin’s founder investors was in talks to take over the company.

Balwin’s founder investors included in the consortium are Brookes, Grey, and GRE Africa, which held 7.6% of the company’s shares in 2025.

The consortium’s offer values Balwin’s total issued share capital at approximately R2.26 billion and gives eligible shareholders the opportunity to realise cash value at a premium, offering them R4.35 per share.

This offer represents a 23% premium to Balwin’s 30-day volume-weighted average price, and eligible shareholders will be paid approximately R1.12 billion. The company will be delisted and taken private if the deal is concluded.

While a premium to its share price, some Balwin shareholders noted that the R4.35 price the consortium offered is less than half the company’s NAV of R9.77.

Combined with the company’s poor share price performance over the past decade, this led some shareholders to claim that they were being short-changed by the PIC’s offer.

Daily Investor asked Balwin about these claims, and a spokesperson explained that the offer is not being presented as full NAV monetisation today.

“It is a cash offer at a premium to recent trading levels in a share that has had limited liquidity and has traded at a sustained discount to NAV,” the spokesperson said. 

“The offer gives eligible shareholders immediate cash certainty, while the reinvesting shareholders and PIC/GEPF remain exposed to the longer-term risks required to unlock value in the private structure.” 

They explained that while Balwin’s net asset value is an important reference point, it is not immediately available to shareholders as cash. 

“The value sits inside a long-dated residential development platform, where it is realised over time through land development, construction, sales, bond approvals, transfers and cash collection,” they said. 

“That process is capital-intensive, sensitive to the interest-rate cycle, and exposed to execution, affordability, infrastructure, and working-capital risks.”

Based on the support Balwin has already seen from shareholders, independent experts, and market commentary, it believes that the offer should be assessed against market value, liquidity, and execution risk, not only against accounting NAV.

Expert opinion

Independent property analyst Keillen Ndlovu told Daily Investor that Balwin has a great business model, but it has always been undervalued or misunderstood by investors in the listed property sector.

“Changing interest rate cycles or expectations over the years also complicated the situation,” he explained.

“It is a developer and not a rental income play, and therefore has a lower dividend payout ratio than REITs or traditional property companies.”

He said that, as a result, the market has struggled to value or position Balwin correctly, despite its phenomenal growth and success over the years.

The Balwin spokesperson told Daily Investor that the company understands why shareholders would compare the proposed R4.35 offer with its original listing price. 

“That comparison is historically relevant and should be acknowledged. However, it cannot be the only benchmark for assessing the offer today,” they said. 

“Since listing, Balwin has returned almost R1 billion to shareholders in dividends, so the shareholder experience includes both distributions received over time and the current cash offer.” 

They pointed out that Balwin also last traded at R4.35 in June 2021, and the offer now gives eligible shareholders full cash liquidity at that level.

“The relevant question today is whether the offer provides a fair and certain outcome relative to Balwin’s current market value, liquidity, risk profile and long-term capital needs,” they said. 

“Balwin’s share has had limited liquidity and has traded at a sustained discount to its underlying asset value.” 

“The offer gives eligible shareholders cash certainty at a premium to recent trading levels, while founder-management and other reinvesting shareholders are not taking cash out.” 

For shareholders not cashing out, they have the opportunity to remain invested alongside the PIC and retain exposure to the same development, funding, interest-rate, and execution risks that will determine Balwin’s future value creation.