Nick Wilson
4 September 2008
Johannesburg — ALTX-listed integrated housing developer Calgro M3 said yesterday it had listed a R300m corporate bond to raise capital as and when it needed it for its development projects.
CEO Peter Waweru said the company had two key integrated housing projects under way and the instrument would "make it possible for us to raise optimally priced debt funding" for them.
These included a 6000-unit housing project in Fleurhof and another project of 14700 units in Midrand.
Integrated housing schemes include a combination of residential units ranging from starter homes to affordable units. The total value of Calgro's committed project work in progress was R5bn.
"Funding of a development business requires the combination of a diversified set of funding providers in order to arrive at an optimal funding mix in terms of cost of debt and tenure and also to create adequate capacity for the developer," Waweru said.
Calgro M3 said it had listed the debt programme on the JSE's interest rate exchange, Yield-X .
Waweru said the company's business had not really been affected by the downturn in the residential property market.
He said 80% of the company's development work was focused on integrated housing, which included starter homes fully subsidised by the government, homes built to meet the requirements of the financial services charter, and affordable houses.
Most of this market was priced below R400000 and, unlike the middle and higher ends of the market, was largely impervious to the economic downturn and high interest rate environment, said Waweru.
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