Calgro M3: A loan to strengthen affordable housing provision in South Africa

Calgro M3 is a JSE listed Turnkey Residential Property and Memorial Parks Developer in South Africa and specializes in Integrated Residential Housing Developments, Memorial Parks and Real Estate Investments.

Calgro has been operating since 1995 and is the market leader in South Africa in the low-income housing sector, as well as the first private sector developer in the country to design and build “integrated developments”, i.e. housing projects with units of all price ranges within the low-income sector, along with social amenities (e.g. parks, crèches, schools and retail spaces). The objective is to create sustainable communities and improve social integration and social mobility.

PROPARCO has provided a ZAR 387m loan (equivalent to EUR 25m) to Calgro Group,via its wholly-owned subsidiary Calgro M3 Developments with a guarantee from Calgro Holdings, to finance its low-income housing developments, with a focus on projects located in high urban priority areas across South Africa.

Residential real estate for low-income populations plays a direct role in reducing spatial and socioeconomic inequalities. In developing countries, the cost of “normal” quality housing is unaffordable for most low-income households. In South Africa, it is estimated that the housing shortage concerns 4.14 million households. This is a huge challenge, which is constantly escalating with population growth and the increase in urbanization rates.

PROPARCO’s loan will allow the construction, between 2018 and 2023, of some 49,000 affordable residential units in priority development areas across the country. The number of people who may benefit from this project is estimated at 190,000.