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CGR - Calgro M3 - Press release - Calgro M3 is David taking on industry

Release Date: 19/04/2011 10:10
Code(s): CGR
Wrap Text

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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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