Calgro M3 achieves another milestone

AltX property development group, Calgro M3 Holdings (“CalgroM3”), has achieved a further milestone by expanding operations for the first time into the Western Cape.

The group recently received the go-ahead from the City of Cape Town’s mayoral committee and city council for the R554 million Scottsdene development in Kraaifontein. This marks CalgroM3’s second foray outside of its traditional base in Gauteng, the first to Bloemfontein earlier this year. 

The four-year integrated housing project will comprise 2 200 units: 1 100 GAP, social housing and rental units; 340 Community Residential Units which are subsidised rental units owned by the City of Cape Town; 550 fully subsidised RDP/BNG units; and 210 freehold Affordable Housing units.

CEO Ben Pierre Malherbe says the project was finally signed-off last week after a lengthy proposal process with full public participation. “Now that we have mayoral and council approval we expect to hit the ground running, with sales of the units for the general public to start shortly and construction to begin still in 2011.” Town planning for the area has been ongoing for the last couple of years. 

To oversee the Scottsdene development and anticipated further work in the Western Cape, CalgroM3 has opened a permanent office in Plattekloof and appointed a divisional director.  Executive Director Derek Steyn is optimistic that Scottsdene is just the start for the group’s Western Cape venture, with a number of other opportunities in the final stages of negotiation.

Steyn says: “Our in-house expertise in the full spectrum of property development and construction allows us to deliver quality lower cost housing, making CalgroM3 a suitable Private-Public Partnership candidate.”  As he points out this is essential in helping government to address the current housing backlog.  “There are roughly 

2.1 million units outstanding in the BNG market and an additional 600 units in the Affordable market, escalating annually, and government has made a vocal and repeated commitment to at least 80 000 units for social housing.”  

Malherbe adds though that CalgroM3 is not dependent on government funding, as the group can accelerate the privately-financed units of integrated housing developments ahead of subsidised components.  “To CalgroM3’s advantage recovery in the integrated housing sector has been much faster than in the rest of the residential market due to willing participation by banks and financial institutions.”  

Other projects with which CalgroM3 is currently busy include Fleurhof, a fully integrated development on the West Rand, Gauteng made up of 9 300 units, Jabulani, a 4 200 unit sectional title residential development in partnership with Inkanyeli, and the Jabulani hostel redevelopment project consisting of 500 units in the first phase. In addition the group secured Bloemfontein’s foremost social housing project, Brandwag, earlier this year in association with Kopano Investments.  

CalgroM3 is on a turnaround trajectory having posted much improved results for the year to February 2011. Revenue grew 49% to R282 million and prior year headline losses were reversed into headline earnings of R17 million, while cash from operations increased by R53 million and debt was cut.  The group is set to release interim results for the six months to August on 17 October 2011.

CalgroM3’s share closed yesterday at R1,25.