Calgro M3 rental business hits a wall
Housing builder to dissolve joint venture with property company as it cannot guarantee it will meet its income targets
Affordable-housing developer Calgro M3 is ending its joint venture with one of the partners in its rental business, but CEO Wikus Lategan says this won’t derail the company’s growth plans. Calgro was building rental houses for property landlord SA Corporate Real Estate through a joint venture, Afhco Calgro M3 Consortium. But the consortium will now be dissolved because the Johannesburg council did not provide electricity-supply infrastructure for the housing at its Fleurhof development in Gauteng, despite having agreed to do so. The site invasions at the joint venture’s Scottsdene development in the Western Cape and the struggle to attract tenants at South Hills in Johannesburg also exacerbated its challenges. These made it harder to sign up tenants, resulting in the companies’ not meeting their income yields target. SA Corporate CEO Rory Mackey said its subsidiary, Afhco, would acquire Calgro M3’s 49% interest in the joint venture. The company will then own all the Jabulani and Sou...
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