Egypt Business Network

Egypt Business Network

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  • Dr. Nilgün Birgören
    Dr. Nilgün Birgören    Premium Member   Group moderator
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    Real estate firms in a rush to meet Egypt's demand
    Egypt, whose population is growing at over 1.5 million a year at an age of creating young families, is serving Egyptian developers well.

    Many live in cities growing 1.8 per cent per year.

    Cairo is bursting at the seams. Developers are transforming the east and west of the city into new urban areas with dedicated residential communities.

    One million units are required in Egypt every year according to the government's 2050 plan.

    UAE developers Emaar and Damac have dived into the market. But it is the home grown developers such as Sodic, Rooya, United Gulf Properties and the New Urban Communities Authority which made clear they are leading the way at this year's Cityscape Global.

    "We're here to showcase our projects and are looking for investors," Yousuf Hammad, Sodic's Chief Commercial Officer, told Gulf News.

    Not that the developer, a public joint stock real estate company, hasn't got its own capital to count on.

    "We raised 100 million Egyptian pounds (Dh64 million) and a lot of the residential properties are being sold off-plan. We also use leasing companies to raise capital and are tapping into the debt markets. We're looking to raise 1.5 billion Egyptian pounds," Hammad said.

    Sales have been going well in a market hungry for property. Its first venture Beverly Hills, a mixed-use community with 1,800 villas, sold out quickly and generated over one billion Egyptian pounds in revenue. Property prices there have doubled since the community matured.

    Its other major residential community, Allegria, with 1,300 villas located in Shaikh Zayed City, off the Cairo-Alexandria Desert Road, has also been a hit.

    "We raised 350 million Egyptian pounds from the Bank of Alexandria to speed up delivery of this project, are one year ahead of schedule and have started delivery in Allegria," said Hammad.

    Reassurance
    The developer wanted to calm panicking clients as the recession hit, reassuring them with physical assets.

    "We cut all frills from our budget, such as travel, marketing, etc, and ploughed all finances back into construction," Hammad explained.

    "The effect was that less than 5 per cent of our customers returned properties and less than 1 per cent bounced cheques. We managed to resell most of returned properties and are happy to buy back as there is a lot of demand for the product," he added.

    "We managed to reach our sales target for this year by the end of August already," he said.

    Secure land ownership
    The developer also reassured that land ownership was secure as it was bought before the 1998 law came in place. The law recently landed the Talaat Moustafa Group's (TMG) in a land dispute over its $3 billion (Dh11 billion) Madinaty project.

    Sodic owns a land bank of 8.9 million square metres comprising Egypt and Syria, Hammad said, although he doesn't like the description.

    "A lot of developers bought land from off-plan sales and failed to deliver overextending themselves, we're not in that game but about delivering, creating an image of employer of choice. Top construction companies and architects are moving their headquarters to our projects," said the developer.

    "We maximise our yields on every square metre and have the human resources to develop it. The crisis has served as well in some ways, many of the top technical personnel from Nakheel have moved to Egypt," he added.

    http://gulfnews.com/business/property/international/real-est...
    • 09 Oct 2010, 5:43 pm