TURNAROUND
Construction group Esor believes it is positioned for profitable future growth
LISTED construction group Esor and listed affordable housing developer Calgro M3 Holdings have entered into a joint venture related to the development of Esor’s R2.12 billion Tanganani Extension 14 integrated residential development in Diepsloot East in Gauteng.
Esor acquired the development rights to the project, comprising about 9 520 housing units, through its subsidiary Safdev Tanganani in March this year.
The project has been included as a priority in the Gauteng Department of Human Settlements and the City of Tshwane’s inter-governmental relations support plan.
The joint venture agreement was entered into between Safdev Tanganani and Calgro M3 Land, a subsidiary of Calgro M3, on Monday. In terms of this agreement, Calgro M3 Land acquired a 50 percent shareholding in Safdev Tanganani from Esor Property Development, a subsidiary of Esor, for a nominal consideration of R500.
Calgro M3 and Esor said in a joint announcement on Wednesday that they believed the combination of Calgro M3’s development skills and Esor’s construction expertise would bode well for the successful implementation of this large and complex project.
In addition to the joint venture agreement, Safdev Tanganani has entered into a development management agreement with Calgro M3 Developments.
Esor will retain a “right of first refusal” for the installation of all the engineering services and the construction of 50 percent of the top structures at market-related rates, with Calgro M3 retaining a similar right on the remaining 50 percent of the top structures at market-related rates.
The 9 520 units in the project comprise fully subsidised Breaking New Ground units with “backyard” rental units; Community Residential Units, which are government-owned subsidised rental units; social housing units, which are privately owned subsidised rental units; Finance Linked Individual Subsidy Programme units; and GAP and fully bonded freestanding houses.
Safdev Tanganani owns the development rights to the two business sites and the installation of all the engineering services. Two pedestrian bridges across William Nicol Drive are included in the project and are currently nearing completion.