Typical illustration of Calgro M3 residential units and amenities
The Group entered this space to secure annuity revenue for use as operating cash. In addition to this, a property developer’s biggest risk, when starting a project, is the availability and creation of bulk and link infrastructure. Each time a development commences, infrastructure is created, but it is sold off and new infrastructure created again in a new project. By establishing a rental portfolio from products within our own residential developments, the Group can enjoy greater benefit from the infrastructure created.
This strategy further aligns with our mission of assisting Government in the eradication of the housing backlog, without exposing the Group to diminished public-sector spend. Many clients are low to middle-income households which benefit from cross-subsidisation that the integrated development model offers.
Calgro M3 has, however, made a strategic decision to temporarily suspend investment into this business due to the capital-intensive nature of the business in an economic environment with limited available capital. The Group has retained its long-term strategic objective of establishing a residential rental portfolio to supply an annuity income stream into the Group as a risk diversification mechanism. The Group will continue to monitor and report on when the business will be re-established.