| Tue 19 Apr 2011, 10:10 | | CGR - Calgro M3 - Press release - Calgro M3 is David taking on industry |
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CGR
CGR
CGR - Calgro M3 - Press release - Calgro M3 is David taking on industry
Goliaths
CALGRO M3 HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 2004/030045/06)
Share code: CGR
ISIN: ZAE000109203
("Calgro M3" or "the company")
CALGRO M3 IS DAVID TAKING ON INDUSTRY GOLIATHS
AltX-listed property development group, Calgro M3 Holdings ("Calgro M3"), is
successfully leveraging its recognised expertise to capitalise on the recent
improvement in the housing market, specifically the affordable housing
segment. A relative minnow in the broader construction industry with a
market capitalisation of only R90 million, the group has nonetheless amassed
a highly competitive pipeline of projects in excess of R5 billion to roll-
out over the next six to seven years. The strong pipeline further sees the
group`s expansion for the first time beyond its traditional Gauteng base and
includes a market-leading `green` residential development. Calgro M3 is
shortly to release annual financial results for the year to February 2011.
CEO Ben Pierre Malherbe says Calgro M3`s adaptable business model has proven
to be an effective tool in ensuring resilience in previously tough market
conditions. "With diversified housing development and construction
expertise spanning a large range of housing sectors, we have been able to
accelerate those components of integrated developments where Calgro M3 was
successful in securing funding." He adds that in-house expertise in all
aspects of property development and construction will drive enhanced margins
going forward. "In addition by executing all aspects in-house, we take full
accountability and can eliminate the traditional misperception of
substandard workmanship in lower cost housing."
He says the group has translated valuable lessons learned in the early
phases of developments such as Pennyville and Fleurhof into profitable
improvements on current contracts. Calgro M3`s pipeline is expanding into
the Western Cape and Free State.
Situated south west of Johannesburg, the second phase of the Fleurhof
development will make it one of the the largest integrated housing
developments in Gauteng. The 9 600-unit integrated development sprawls 291ha
of land. The project includes four mixed-use business centres, seven
creches, five religious sites, three schools, a community centre and several
recreational parks. The group is set to provide water, sewerage, storm
water, roads and electrical infrastructure to the site as well as a water
reservoir and the extension of Westlake Road. Westlake Road will act as a
strategic link between Soweto and the more affluent northern suburbs. All
the infrastructure services for the first two development areas have been
completed and handed over to the relevant municipal entities.
Adjacent to the Jabulani Mall and new public hospital under construction,
Calgro M3 is developing the Jabulani CBD project in joint venture with
Inkanyele Projects. The development will include 4 200-integrated housing
units and an upgrade of the roads, stormwater, sewerage and electrical bulk
infrastructure for the area.
Immediately adjacent to the Jabulani CBD development is Jabulani Hostels - a
tri-party agreement between Calgro M3, the Gauteng Department of Housing and
Nedbank (providing the interim development financing). The project has 400
fully subsidised family units and 100 social housing (CRU) units in the
first phase, currently under construction. As part of the construction
process, Calgro M3 is providing labour opportunities and skills transfer
programmes for the local community.
Recently the group was named as implementation agents for a major financial
institution for the South Hills integrated development. The proposed
intergrated development is 5km south of the Johannesburg CBD. The project is
in its planning stages and construction of the 4 217 units is set to start
in early 2012.
Scottsdene in Cape Town is Calgro M3`s first foray outside of Gauteng. The
four-year project was awarded by City of Cape Town in November 2010 and is
set to be completed in early 2015. The total project will comprise 2 200
units - 1 100 GAP, social housing and rental units, 340 community
residential units (or subsidised rental units owned by the City of Cape
Town), 550 fully subsidised RDP/BNG units and 210 freehold affordable
housing units. Derek Steyn, executive director responsible for new projects,
says the group is in the end stages of finalising a number of other
opportunities in the Western Cape as a natural springboard for further
geographical expansion.
Early this year the group expanded its footprint with Bloemfontein`s
foremost social housing project, Brandwag, in association with Kopano
Investments. The project, developed for Free State Social Housing Company,
will consist of 1 050 units of which 350 will be refurbished and the rest
newly constructed. Government subsidy for Phase I was approved at the end of
2010.
Business Development Director Derek Steyn says the development of the
group`s retirement and lifestyle estate in Broadacres, Fourways opens the
door to new opportunities in the mid-to-high segment. This project,
consisting of 394 units with a comprehensive frail care and wellness centre,
will be a signature development setting new industry benchmarks for green
construction.
Malherbe concludes: "Fortunately we are not solely reliant on government
funding for new projects. Our sustainable business model enables us to
partner with financial institutions and other private sector funders to
accelerate select components of our integrated projects." He adds that
looking ahead Public Private Partnerships could be an effective way to start
addressing the current housing backlog. "With its current pipeline Calgro
M3 is strongly placed to capitalise on the significant market growth
opportunities."
Ends
19 April 2011
Designated Adviser
Grindrod Bank Limited
Date: 19/04/2011 10:10:01 Produced by the JSE SENS Department.
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