Calgro M3, a JSE-listed property investment company, has maintained steady profitability in the affordable housing market. The company released its interim results for the six months ending August 31, 2026, on October 19.
Group revenue saw a slight increase of 1.22% to R465 million, while the gross profit margin remained stable at 29.46%. This margin is well above the company’s strategic target band of 20% to 25%.
Memorial Parks: A standout performer
The Memorial Parks business emerged as a standout performer, with revenue soaring by 20.04% to R47.81 million. Cash collections surpassed the R60 million mark, reflecting the segment’s strong growth.
According to Ben Pierre Malherbe, the current CEO, they actively executed the board-approved strategy, focusing on the sale of non-core assets and ensuring core projects remain ready for implementation.
Their strategy revolves around four key pillars: investing in strategic infrastructure, selling non-core assets, reducing net debt, and expanding the Memorial Parks segment.
Non-core asset disposals gain momentum
Calgro M3 is making progress in disposing of non-core assets, primarily in the mid-to-high property segment and retirement estates. They have accepted an offer for the Cornubia land parcel, with the buyer currently in the due diligence period.
The Vredehoek property development asset has also received a memorandum of understanding, with due diligence expected to finalize in the second half of the financial year. Calgro M3 is exploring the potential of redeploying some non-core land portions into the Memorial Parks business, transforming idle land into a source of annuity income.
Read Also: Spear Reit Western Cape portfolio reaches R8.8 billion
The residential property development segment, contributing 89.73% of revenue, generated R417.87 million in the six months, a marginal decline from the previous year. However, the gross profit margin improved slightly to 26.56%.
Calgro M3 has been cautious about construction risk, adopting a sales-led approach. They secure guaranteed off-take agreements before commencing construction, with approximately 55% of its 1,418 opportunities under construction or in stock already sold to rental investors.
Calgro M3 has also been widening the range of homes it offers to cash-strapped buyers. At Fleurhof, the group rolled out a mix of bachelor, one-bedroom and two-bedroom units, with selling prices starting at R399 000. The company says the units have attracted strong demand and interest. A new product is under construction at South Hills and is expected to be completed in the second half of the current year.
Bulk and link infrastructure continued to be installed at Fleurhof and Jabulani. Together, these two projects give Calgro M3 a pipeline of 5 100 opportunities, which will be rolled out in line with sales demand.
Calgro M3’s focus on non-core asset disposals and growing its Memorial Parks segment positions it for sustained growth. With a strong pipeline of opportunities and a disciplined strategy, the company aims to consolidate its position in the property market.
The group’s largest long-term project, Bankenveld District City (BDC), remains on schedule. The first phase of bulk and link infrastructure is set for completion in the first quarter of the 2028 financial year, with internal infrastructure development to follow.
