French loan for Calgro M3

France’s development bank has lent R387m to JSE-listed residential property developer Calgro M3.

France’s development bank has lent R387m to JSE-listed residential property developer Calgro M3.

The money will be used to build houses for people with low incomes in urban areas earmarked as priorities, Calgro said on Wednesday. It has R27.7bn in affordable housing projects on its order books.

Though Agence Française de Développement has been supporting development in Southern Africa for 40 years, Calgro said this was the first funding it had undertaken globally in the affordable and integrated housing sectors.

The loan has been provided via the agency’s private-sector financing arm, Proparco. It equates to €25m, but Calgro said it opted to secure all its international funding in rand to prevent exposing itself to foreign-exchange risk.

The loan term is six years with an expected fixed simple interest rate of 12.41%, payable in six-monthly intervals.

The first, R278m draw-down is expected in December, with the final draw-down of R109m in May.

Calgro M3 would restructure into three business units in the next seven years.

By 2022, the company would consist of housing development, memorial park and rental property businesses, CEO Wikus Lategan said.