Bankenveld District City will be Calgro M3’s single biggest project

You can also listen to this podcast on iono.fm here.

ADVERTISEMENT

CONTINUE READING BELOW

JIMMY MOYAHA: Calgro M3, a listed company on the JSE, which deals in a lot of different types of construction and development, announced it is embarking on a very interesting project near Sandton City. 

I’m joined on the line by Calgro M3’s group chief executive, Wikus Lategan, to discuss this and take a look at what’s going on. 

Good evening, Wikus. Thanks so much for taking the time. Tell us more about the Bankenveld District City development. 

WIKUS LATEGAN: Wikus, good evening to you and the listeners, and thanks for the opportunity. Yes, the Bankenveld District Development is where we are now exercised.

The option was signed just more than five years ago as an option agreement to develop more affordable housing in partnership with areas on the retail commercial side, of course, closer to Sandton and related job opportunities in the Woodmead area. It will host somewhere between 20 000 and 30 000 housing opportunities. 

Read: Calgro announces new development in affordable housing segment

The difference in this development from all our previous developments is where we normally apply for town planning approval on a phased approach. This time around we applied for environmental and town planning approval on the full spectrum of the project – and that had been granted.

So the outstanding matters at this stage are Competition Commission approval, as well as the final designs and sign-off of our Bankenveld infrastructure. 

Those, for the listeners, are basically your main entrances and roadways through the project. Remember, we’re going to link Woodmead and Marlboro Drive. It also includes your main water connections, sewer connections and stormwater connections. 

We’re quite excited that this will make quite a big impact on the lives of the people in the more affordable site. Workers who generally have to travel long distances to job opportunities will hopefully now have a place they can call home closer to their job opportunity and spend more time either at work or with their families, and uplift their families through that.

JIMMY MOYAHA: This is certainly a big project Wikus, and if we look at the size of the expected revenues, just for scale purposes this project alone is bigger than the current property order book that you guys have. When we look at the implementation of this project, how long is it going to take to get at least Phase 1 or a couple of phases up and running – obviously after the regulatory approvals that are required?

WIKUS LATEGAN: Yes, it does double our pipeline. Just remember, our pipeline doesn’t include units delivered, so we’ve delivered way more than that amount of units over the last few years.

Our Fleurhof project alone is 9 500 families residing today with seven to go. So in terms of what we have done, it’s in line, but it is the single biggest project. 

The project is intending to hopefully have all of the regulatory approvals in place late this year, with breaking ground on bulk and linking infrastructure October/November, and then hopefully 12 months later starting top structures construction, and then the first handovers roughly 12 months after that.

So we are hoping to have the first housing opportunities completed towards the end of 2026.

JIMMY MOYAHA: Now, Wikus, you mentioned that this is obviously not the first time that Calgro has taken on a project of this scale. The business is very accustomed to this in terms of the development space. From a sustainability point of view, what does this mean for Calgro’s efforts to continue along and be a sustainable construction player in the South African landscape?

WIKUS LATEGAN: Maybe, if I may say, tongue in cheek, we try not to refer to ourselves as construction any longer. We actually don’t do our own construction. We subcontract it these days. 

Read: Calgro closes construction division, retrenches 150 employees

But if you look at the development space, we hope that if you look back to our slogan as ‘Building legacies, changing lives’, we hope this will enhance the sustainability.

By ‘sustainability’ I’m not talking about the green initiatives and all of that, but if we can make a difference in someone’s life every day, if we can bring people together, if we can create jobs – which we are, through housing because housing is not really one of your biggest job creators in South Africa – because you have to create new infrastructure which is good for the country, then you have to create housing, which is good, but then you also have people residing there.

Then you start building retail, commercial schools, which uplift kids and education – all of that.

Read: A silver lining for Calgro M3

ADVERTISEMENT

CONTINUE READING BELOW

So if you bring all of that together with enough parks, places to run, places to have worship, you build new communities in a new urban design framework because, if you look at your older towns, especially the outskirts, they are very much fragmented.

Roodepoort was never supposed to be right adjacent to Florida, was never supposed to be right adjacent almost to the city centre.

These days if you travel between Johannesburg and Pretoria, yes, it’s Johannesburg, Woodmead, Waterfall, Midrand, Centurion and Pretoria, but everything is connected. 

This is a new town, developed as a new town, so we hope that the urban design principles we are implementing there will really enhance the lifestyle of the people through that, and therefore the sustainability of Calgro as a group as well.

JIMMY MOYAHA: Wikus, you mentioned that obviously from a project point of view you are aiming to make this an affordable housing project or an affordable town environment. Do you have an idea at this stage around what we are looking at from an affordability point of view – at least from a consumer point of view? I know it’s still very early in the project stage and there’s a lot that can still happen, but can you give us a sense of just where we stand from an affordability point of view?

WIKUS LATEGAN: Yes. You only really know what your costing is once you go to ground and all your true technical investigations are complete. That’s only when you fix it.

But we hope to bring a typical bachelor/one-bedroom unit into the market for R500 000 or even just under R500 000.

And then in our other development, we are currently selling a two-bedroom, one-bathroom apartment with fairly good finishes, security state, one-to-one parking ratios – because everyone in that market has a car – as well as some sports and extra almost outside equipment and facilities are available. We started just at roughly R600 000.

Most would be slightly more expensive, but that’s roughly the price point, the mid-tier price point we will target. Let’s say between R600 000 and R700 000, but then all the way up to bigger, fancier apartments up to about R1.5 million.

As we already said, the property is well located and we want to cater for a wide group of income levels.

JIMMY MOYAHA: Wikus, will there be mixed-use or different types of properties? Are we looking strictly at apartments or are we looking at possibly incorporating freestanding homes? We’ve seen a bit of a trend in developers wanting to go for a particular type of setup, whether it’s from an economic or a scalability standpoint. How are you guys seeing this?

WIKUS LATEGAN: Let me maybe touch on your economic standpoint. The more you do the same designs, the more price-effective it becomes, and most of us as developers don’t generally do it to enhance our own margins, especially in Calgro’s case. We are trying to do that to actually pass the cost benefit back to the consumer and come in lower in the market. It makes it more affordable for more people to stay in our developments. So that’s why we do it. 

This development at Bankenveld will be slightly different.

It’ll have different typologies, because you can’t do 20 000 to 30 000 of the same housing typologies in a single development. It just wouldn’t look nice, not after all the effort we’ve taken in terms of urban design. So it’ll be different. 

Some of them will be typically up to eight-storey, nine/10-storey buildings. Some of them might only be four-storey buildings.

Some will have lifts, some won’t have lifts. It depends on the finishes, really, if you build a 40m² unit where it roughly costs the same, the brick and mortar cost of that. So it’s just catering for a wider range and making it more affordable for the consumer – as affordable as possible for the consumer.

JIMMY MOYAHA: Well, we hope that that affordability does come through. We wish you guys all of the best in getting the regulatory approvals finalised so that you can break ground as soon as possible. Thank you so much, Wikus. 

That was Wikus Lategan, group CEO of Calgro M3, joining me to reflect on their latest district city development that they have outlined and planned for the upcoming future.

Harry Byrne

Related post