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FNB Commercial Property Finance has committed R470m to fund Balwin Properties’ latest rental housing development in Joburg, deepening its exposure to South Africa’s growing build-to-rent market.The capital will fund the construction of 532 rental apartments in a development dubbed The Klulee, in Linbro Park, adding to Joburg’s pipeline of institutionally backed rental housing over the next three years.The transaction comes as banks and developers increasingly view the residential rental market as a source of stable, long-term income, with demand supported by high house prices, elevated borrowing costs and pressure on household finances. For Balwin, the project also advances its strategy of building recurring rental income alongside its traditional build-to-sell business.The financing follows Balwin’s announcement two months ago that its founders, in partnership with the Public Investment Corporation (PIC), had agreed to a R2.26bn management buyout that would result in the residential developer delisting from the JSE, subject to shareholder approval.“Our long-standing relationship with Balwin reflects our broader commercial property finance strategy to strengthen strategic partnerships with developers and continue to bolster our lending footprint in the residential sector and broader income-producing real estate sector,” said FNB commercial property finance CEO Preggie Pillay.“By supporting quality, scalable developments such as The Klulee, we are not only strengthening our commitment to grow our business but also playing a meaningful role in unlocking capital for projects that respond to South Africa’s challenging housing demand.“We see significant opportunity to open funding for developments that deliver accessible, well-located rental stock at scale. Balwin remains a key strategic partner for us, and we are proud to support developments that contribute to sustainable urban growth and bring more South Africans to quality housing,” Pillay said.The deal builds on FNB’s growing exposure to Balwin’s residential pipeline. The bank financed The Eastlake — Balwin’s first purpose-built rental development — in 2025.“Balwin has enjoyed a longstanding relationship with FNB,” said Balwin CEO Steve Brookes. “In 2021, the bank funded one of our flagship developments, Thaba Eco Village, in the south of Joburg, which remains a cornerstone in the Balwin property portfolio.“To date, we have delivered more than 16 phases with total funding of more than R750m. Once completed, the development is expected to comprise more than 31 phases.”Brookes said rental housing had become an increasingly important component of Balwin’s business model as affordability constraints continue to weigh on first-time buyers.“Demand has remained resilient despite broader economic pressure for many consumers,” Brookes said.He said the rental developments were intended to create a pathway into home ownership by enabling tenants to transition from renting to buying apartments within Balwin’s portfolio while supporting the densification of well-located urban areas.The development will comprise 210 apartments in its first phase, followed by 182 in phase two and 140 in the final phase, adding to the stock of institutionally managed rental housing in Joburg, as developers respond to sustained demand from households seeking secure, professionally managed accommodation.Business Day
