JSE-listed property investment company Calgro M3 has reported a 10.77% year-on-year increase in net asset value (NAV) to R16.46 for the financial year ended February 28.

The company declared a final dividend of 8.64c a share, which was identical to the prior financial year's dividend. This represented 5.54% of headline earnings a share (HEPS), which was above the company's 5% policy minimum.

Revenue increased to R893-million, up from R868-million in the 2025 financial year. Revenue for the year under review from the residential property development segment was R806-million, and the memorial parks segment generated R86-million of revenue during the 2026 financial year.

HEPS decreased to R1.56 a share, down from R1.71 a share in the year to end February 2025.

However, Calgro M3's combined development pipeline increased to R31.8-billion, made up of R29.4-billion of investments in residential opportunities and R2.4-billion of investments in its memorial parks business.

The development pipeline underpins long-term growth, the company says.

“The combined pipeline remains robust, with 31 874 residential opportunities and 114 827 burial opportunities. This pipeline reflects projects that are aligned with the group’s strategic focus and long-term growth objectives,” the company adds.

Net debt to equity increased to 0.74, up from 0.65 in the prior financial year, but well within the group's 1.5-times covenant.

During the year under review, Calgro M3 implemented its strategic priorities that were aimed at driving long-term sustainable growth, focused on four key pillars.

These include the disposal of noncore assets, the accelerated completion of noncore projects while expanding the memorial parks footprint, the reduction of net debt in the medium term and the development of a sustainable talent pipeline.

These strategic priorities informed performance and capital allocation decisions during the year, with the group directing its sales and construction efforts towards the noncore project pipeline, which are developments outside the group’s large-scale, integrated core portfolio.

This resulted in a notable shift in revenue, with 70% of units transferred during the year originating from Scottsdene, La Vie Nouvelle, South Hills Lifestyle Estate, Jabulani and 32-on-Pine, and predominantly within the mid-to high-end product range.

Additionally, in conjunction with the start of Phase 1 infrastructure at Bankenveld District City (BDC), the company was positioned to enhance liquidity and improve shareholder returns, it says.

Calgro M3's residential property development segment remains the largest contributor to its performance, and the BDC integrated housing project will grow into the anchor development within the business segment.

This project broke ground during the year under review with the rollout of bulk and link infrastructure, including the construction of key arterial and connector roads and bridges within the precinct.

The project is expected to deliver a minimum of 20 000 housing opportunities across a range of affordable housing typologies, strategically located within walking distance of the Marlboro Gautrain Station, in close proximity to job opportunities in the adjacent Linbro Park Industrial Area, as well as the Sandton and Waterfall City central business districts.

The initial phase of infrastructure delivery, which encompasses bulk, link and internal infrastructure, is expected to yield about 6 000 serviced opportunities over the next five years, and which will be rolled out in phases.

“We are busy creating strategic roads and links to develop the BDC project. We are building two bridges over the Jukskei [river, in Johannesburg], as well as an under-road connection to the Linbro Park industrial area,” said Calgro M3 group CEO Ben Pierre Malherbe.

“The infrastructure going in there is exciting and has been a long time coming,” he said during a presentation of the group's results on May 18.

The project was being carried out as an integrated project with the City of Johannesburg and was aimed at the lower end of the residential housing market.

“This is an exciting project that we are looking forward to. We have a 15-year pipeline to develop about 20 000 residential units. Construction of the first units can be expected six to eight months after the internal infrastructure is completed.

“While the development of the internal infrastructure and top structures can overlap, we will take a phased approach to development that will depend on the market acceptance of the units,” he said.

Calgro M3 CFO Sayuri Naicker said that, of the R206-million the group had committed to the BDC project, about half had been invested, with the remainder expected to be invested during the current financial year.

Revenue for the residential segment increased marginally to R806-million, up from R800-million in the 2025 financial year, while the gross profit margin declined to 24% from 27% in the 2025 financial year, which reflected the deliberate trade out of legacy noncore projects, she said.

Further, bulk and link infrastructure continued to be installed within Fleurhof, Belhar and Jabulani, which collectively delivered 968 serviced opportunities into the pipeline for development in the current 2027 financial year.

Meanwhile, the acquisition of additional land parcels remained a key strategic priority for the business, especially land parcels in close proximity to existing integrated developments to enable it to leverage ongoing bulk and link infrastructure investments, and achieve operational efficiencies.

Additionally, the identification and acquisition of new land parcels in the Western Cape remained a focus to support continued geographic diversification of the development pipeline.

In terms of outlook, Malherbe said the end of the financial year under review had indicated a recovering market. Since then, the US-Israel-Iran conflict in the Middle East was contributing to higher fuel prices that would increase pressure on consumers.

Despite this, the demand for Calgro's units remained strong during the year under review and this had not changed in the current financial year, he said.

While price escalations will place pressure on sales, the outlook remains positive.

However, Calgro M3 is aiming to sell its units in bulk, rather than targeting end-users, as they will take longer to recover from the macroeconomic impacts.

“Transactions where we sell units in bulk are more attractive at this stage,” he noted.

During the current financial year, priority would be given to disposing of noncore assets, accelerating the completion of remaining noncore projects, and expanding the memorial parks footprint to boost recurring cash flows, while continuing to deliver serviced opportunities from the core pipeline, Malherbe said.

Although net debt was expected to increase further in the short term to support ongoing development and infrastructure investment, the long-term objective remained to reduce debt through balance sheet optimisation and asset realisation, he noted.

“The continued rollout of the BDC project marks a significant step in redefining Calgro M3’s integrated housing delivery model, as it provides a scalable platform for phased, demand-led development.

“Simultaneously, active management of concentration risk through diversification across multiple projects ensures balanced production across the core project portfolio.”

For the current financial year, the strategy was clear, namely rolling out the R31.8-billion combined development pipeline and the bulk and link infrastructure at BDC that was currently under development, and maintaining the dividend. These would be supported by a balance sheet that had been positioned to deliver the next phase of integrated-housing growth, he said.