JSE-listed property development group Calgro M3 is finding a lucrative opportunity in the business of death – drawing in millions of rand in revenue from its private burial services and memorial gardens in Joburg, Bloemfontein and the Western Cape.
The group launched a pilot of its Memorial Parks in Nasrec in 2017, offering grave opening and closing services on privately owned and professionally managed and maintained burial grounds.
It has since expanded to five parks across the country – with at least three more in the pipeline, pending approvals from government for the appropriate zoning.
In reporting its annual results for the year ended February 2019, Calgro counted R20.7 million revenue from its current Memorial Park operations (21% of group profit), with the standing portfolio (of five parks and 133,000 grave sites) anticipated to bring in R2.3 billion.
It is currently exploring opportunities in Tshwane, Midrand and KwaZulu-Natal to grow the footprint and thus annuity income. For this, it is planning on spending R500 million on this business segment over the next 15 years.
Calgro said the country is currently running out of space to bury its dead. Its own research has shown that South Africa faces a shortage of approximately 8 million graves over the next 15 years, given current mortality rates. According to the World Health Organisation, this figure will most likely exceed 10 million in the same period for sub-Saharan Africa.
“Death and burial services are topics not often dwelled upon. The reality is, however, that every person will at a point in time go through the process, and as a result, death has become a global industry worth billions of dollars each year. The funeral industry in South Africa is no different and has experienced continuous growth over the past decade,” it said.
A study published by Forbes in June 2017, found that half a million funerals take place in South Africa each year with an estimated value of R9 billion.
It noted that, besides funerals, there is also a flourishing funeral insurance industry in the country – the most popular insurance cover in South Africa, worth over R7 billion.
How the parks look
The Calgro Memorial Parks is positioned as a ‘premium’ burial option, with prices at some parks starting at R10,000 for a simple headstone, to as much as R360,000 for an eight-plot family estate.
A typical funeral can cost from R10,000, for a basic service, to way in excess of that, depending on additional requirements. However, according to Reuters, a plot of state land for burials costs an average of R3,000.
“The cost depends on the size of the event, determined by the number of people that attend, and most importantly, traditional requirements, based on the individuals’ ethnicity and culture. In our research typical funerals cost from between R25,000 to R80,000,” it said.
For its entry price at the ‘flagship’ Nasrec Park, the group’s R24,500 burial (excluding tombstone).
The park features a fully functional administration and sales office, 24-hour state-of-the-art security with roaming security guards, manicured gardens, a non-denominational chapel, as well as tranquil dams and streams with abundant bird life.
The park is also completely self-sufficient, not relying on the electricity grid, with a solar powered system and backup generators.
This is what the parks look like:
Nasrec Memorial Park
Fourways Memorial Park
Bloemfontein Memorial Park
Durbanville Memorial Park