Real Estate – Daily News Egypt Egypt’s Only Daily Independent Newspaper In English Thu, 27 Apr 2017 13:24:27 +0000 en-US hourly 1 Badr El Din inaugurates mall in District 16 of Sheikh Zayed Mon, 24 Apr 2017 07:00:49 +0000 The mall is built on an area of 20,000 sqm with investments of EGP 200m

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Badr El Din Real Estate Projects inaugurated Thursday the first phase of its MAZAR Mall project in District 16 of Sheikh Zayed on an area of 20,000 square metres with investments of EGP 200m.

Chairperson of the company Mamdouh Badr El Din said that the mall is the first of its kind in District 16 and the company was keen to choose the site to meet the needs of the population of the region.

Badr El Din noted that the company will complete the construction work for two other floors of the mall. The mall consists of three floors and 30% of the mall’s units have been leased to a number of commercial chains and an administrative space has been leased to Qatar National Bank (QNB) to set up a new branch.

Badr El Din added that the area of shops starts at 40 square metres and goes up to 2,500.

He pointed out that the mall operates with state-of-the-art technology and depends heavily on solar energy, which will account for 25% of lighting and central air conditioning during the morning hours. The mall includes a central air conditioning station, in addition to a fire station with a reserve of 500 cubic metres of water.

For his part, CEO of Spinney’s Egypt Mohannad Adly said that the mall’s branch is built on an area of 2,500 square metres and witnessed 4,000 transactions on its first day.

The opening ceremony was attended by a number of officials from the New Urban Communities Authority (NUCA), Sheikh Zayed Authority, from the Minister of Supply and Internal Trading, and a number of senior investors and businesspeople.

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“Build it at its cost”—an initiative to build housing units at half price Mon, 24 Apr 2017 06:30:53 +0000 Construction companies obtain 100% profits, says founder of the initiative

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Real estate company owner Emad Essa launched an initiative called “Build it at its cost” to face the hike in property prices following the liberalisation of the exchange rate in November.

Essa said that the initiative aims to combat excessive greed by some investors and contractors, who earn up to 100% of the housing units’ construction cost as a profit.

Essa added that some contractors applied an increase of EGP 1,500 in the price per square metre after the flotation, although the actual increase in the price per square metre was EGP 250.

The initiative has been implemented in a number of projects during the past three months in 6th of October City, which proved successful because of its reliance on the principle of citizens’ participation in building their units, in addition to providing 50% of the construction price through his company, according to Essa.

He noted that the initiative will be implemented in Giza governorate and will be extended to other governorates.

Essa called upon the government to provide lands at affordable prices to benefit the largest possible number of people looking for homes.

Essa told Daily News Egypt that the initiative includes four projects.

The first project consists of nine units with an area of ​​200 square metres per unit in the northern expansion area in 6th of October City in front of Porto October at a cost of EGP 440,000 per unit, although similar units are being sold in the same area for EGP 800,000.

The second project consists of seven units and is being implemented in the northern expansion area as well with an area of ​​140 square metres per unit at a cost of EGP 378,000 per unit, while similar units are being sold in the same area for EGP 630,000.

The third project, which is currently being prepared, targets youth in the Hadayek October area in front of the new Zewail University, where the market price for under-construction units is EGP 450,000; however, the initiative provides the unit at a price of EGP 270,000.

The fourth project is also being prepared in front of Mall of Arabia in the area of ​​palaces and villas in 6th of October City. The unit will be sold at a price of EGP 650,000, although its market price is EGP 1.1m.

“If the state intervenes to provide lands at affordable prices, the initiative can provide housing units of 100 square metres for EGP150,000 in batches,” Essa said. “The initiative proved successful in 6th of October City and it is able to reduce real estate unit prices by more than 40%.”

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ARDIC negotiates with SCZone to develop 2,000 acres Mon, 24 Apr 2017 06:00:44 +0000 EGP 1.7bn is the volume of contracts of ARDIC’s projects, says managing director

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Daily News Egypt interviewed Ashraf Dowidar, the managing director of ARDIC for Real Estate Development, to talk about the company’s projects and expansion plans.

What is the target of Qeema Company that was established by ARDIC?

Qeema is a facility management company that started its work in April with managing two ARDIC projects: Zizinia Gardens in New Cairo and Zizinia Flowers in El Shorouk. Besides, Qeema will manage the mall we are establishing in Haram Street.

Furthermore, we started communicating with some companies and developers about managing their compounds and administrative offices.

We think that the company is important, as we see that the real estate wealth is either wasted or collapsing as residents or tenants (many of whom have no experience in the sector) have become their own facility managers to their units. With time, problems surface.

The developers see that there is a problem because there are no competencies in this field, and we have agreed with the American University in Cairo to develop a diploma in facility management.

We held a press conference and gathered real estate developers and tenants unions, and the attendance was great, which was proof that there is a need for facility management. We conducted a course for 30 people. In less than two months, about 24 individuals have received an experience certificate from the International Facility Management Association (IFMA).

We selected 10 of the members for a course that will train them to teach the diploma, which will be held by the American University in Cairo on behalf of ARDIC.

Thus, we have contracted with a facility management company in Lebanon that is specialised in green area cultivation, security, cleanness and maintenance, pest control, carwash, and Activation organization.

By the end of the year, we are also targeting the management of two commercial buildings and another mall.

What is the number of phases of Zizinia El Mostakbal and the size of its investments?

The project consists of three residential phases and a fourth commercial one with a total investment value of EGP 2.5bn. We started implementing the first phase in El Mostakbal City, close to the New Administrative Capital, and it is supposed to be delivered by mid-2020. The first phase will end in 2018, the second in 2019, and the third in 2020.

The contract for the first phase was worth EGP 1bn, and EGP 400m have already been paid.

What is the total value of the company’s contracts ?

About EGP 1.7bn is the volume of contracts of ARDIC’s projects.

What is the company’s expansion plan?

We are negotiating with the New Urban Communities Authority (NUCA) for 300 acres in New Minya to carry out a project with a full range of projects, which includes residential, commercial, and administrative buildings, as well as a hospital, hotel, and school.

As for housing units, they will be divided into apartments and villas with a special nature to suit the Upper Egyptian citizen.

Will the company carry out a small-scale residential project in Minya?

Small units in a distant place, such as New Minya or New Assiut, do not fit well with the mentality and culture of the Upper Egypt citizen, because those spaces are available in the city, and they do not have to live far away to get an apartment of that size. Besides, rich people will neither prefer small or large units; therefore, the design of our project’s units will be different.

When are you expecting to implement the project?

NUCA is supposed to offer the plot of land in a tender. There was a problem with the height of buildings, so NUCA got a verbal approval from the army on the allowed height of buildings in that area. A written approval is pending. The land will then be offered in the tender at the price that will be determined by NUCA. The initial value of the project is estimated at EGP 7bn.

Are there other places where the company is negotiating for lands?

Yes, we are seeking a plot of land in the Suez Canal axis of about 2,000 acres, and we are currently negotiating with the Suez Canal Economic Authority. We seek to establish an industrial project, where it will include both a residential and commercial industrial complex, as well as a school. Some questions and points will be agreed upon, because obtaining lands in the axis is conducted through an usufruct system and therefore an agreement must be reached with the authority regarding the residential part of the project.

Does the company worry about increasing the investment tax in the economic zone estimated at 22%?

We don’t worry as much as we do about the whole investment opportunity, such as the value of the land and the new usufruct system and its application under the construction of a residential project. We expect them to reach an agreement before the end of the current year.

Are there loans or agreements with banks to finance the company’s projects?

For the implementation of El Mostakbal project, an investment of EGP 2.5bn will be put to place—we contracted with the National Bank of Egypt (NBE) for a loan of only EGP 220m to finance the project, which proves that the financial situation of the company is good.

What is your opinion on the proposed real estate developer law?

We have attended the first dialogue on a draft law to organise the real estate development sector in the parliament’s Housing Committee, but there is a long debate between developers, members of the parliament, and the Ministry of Housing, Utilities, and Urban Communities. One of the points of dispute is regarding determining the developers through determining the size of lands to be developed. Thus, the parliament specified 250 sqm, but a small area like this will allow a lot of people to be part of the law and named as developers, and the operation will be very wide, which maybe needs to be reconsidered and modified to reach a more effective regulation.

It is important to develop a federation of real estate developers like the Egyptian Federation Construction and Building Contractors in order to open a link between developers and the Ministry of Housing to organize the work of the real estate developers.

We will send the proposals to the parliament, the ministry will comment on these proposals and suggestions, and the discussions will be conducted by the parliament.

After the success of the Cityscape Exhibition held in March, what is the expected percent of the sales?

We sold 40% of the project. We plan to reach 60% of the project by the end of this year.

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59.4% of Egyptians pay 25% of income to rent homes Mon, 10 Apr 2017 09:00:08 +0000 70% of Egyptian households live without secure tenure, says Shawkat

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59.4% of households would have to pay more than 25% of their monthly income to rent a median priced home estimated at EGP 800, according to Yahia Shawkat, co-founder of 10 Tooba Applied Research on the Built Environment.

Shawkat said that almost half of households (49.2%) would not be able to buy the median home, which at EGP 225,000 surpassed the House Price to Income (HPI) ratio of 6.6.

Official statistics reveal that about 3.2% of households live in non-durable housing. This means that around 200 people lose their lives and over 800 families are made homeless as a result of over 390 residential building collapses a year.

Shawkat added that an estimated 70% of Egyptian households live without secure tenure. The rural Delta governorate of Gharbeya had the highest proportion, at 93% without secure tenure. The frontier governorate of South Sinai had the least, at 8% of households.

Regarding safe water and sanitation, Shawkat said that about 17% of Egyptian households are deprived of access to safe water. The highest incidence is in Upper Egypt, where deprivation ranges from 19% to 46%. About 2.3 million households (13.3% of the population) do not have access to a tap inside their dwelling.

20% of Egyptians do not receive the sufficient national average of 152 litres per person per day, and in 5 out of the 27 governorates, over 25% of water samples failed quality tests.

Meanwhile, over 9.2 million households (53.4%) in Egypt are without improved sanitation. Most households use unsealed septic tanks, or informal sewage networks that discharge raw sewage into canals.  Deprivation of improved sanitation is disproportionately high in Egypt’s rural areas of Upper Egypt and the Delta, according to Shawkat.

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34% of Egyptians live in insufficient housing Mon, 10 Apr 2017 08:30:04 +0000 Qena is the most deprived governorate in Egypt, followed by Luxor, according to BEDI

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One-third of Egyptian families (34.1%) live in insufficient housing, according to 10 Tooba for Applied Research on the Built Environment.

The centre recently issued the Built Environment Deprivation Indicator (BEDI), explaining that the households are deprived of one or more of six quantifiable components that have been used to define adequate housing: affordability, durable housing, secure tenure, sufficient living space (crowding), safe water, and improved sanitation.

The study added that Upper Egypt is the most deprived, as the percentage of households living in an insufficient environment ranged between 37.4% in Luxor and 51.3% in Qena, the most deprived governorate in Egypt.

Furthermore, the Delta region had the second highest deprivation, where it ranged between 29.4% in Menoufiya and 43.5% in Gharbeya.

However, Greater Cairo was just under the national average, where between 23.7% and 33.6% of households were deprived.

Households in the Suez Canal region experienced below average deprivation, ranging between 22.2% and 27.9%. Additionally, New Valley, the least deprived governorate, registered 5%, with the Red Sea at 19.5%.

The study noted that 54.3% of Egyptians are considered cost burdened, with rents or house prices surpassing their ability to pay.

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Tabarak Holding to inject EGP 1.2bn in Egypt during 2017 Mon, 10 Apr 2017 08:00:44 +0000 We are cooperating with American and British companies for the development of architecture and landscape designs of 90 Avenue project, says El-Shorbany

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Real estate prices are expected to rise by 40% by the end of this year because of the high cost of construction materials as a result of the high price of the dollar, according to Ali El Shorbany, CEO of Tabarak Holding for Real Estate Development.

El Shorbany said in his interview with Daily News Egypt that the land prices are expected to increase by 50%, so the net profit of the real estate developer will decline to 5%.

How do you see the investment climate in the Egyptian market, especially the real estate sector after the flotation of the pound? And how has the flotation of the pound affected the cost of the implementation of the projects? Have you adjusted the selling prices of your projects? What is the expected increase?

The liberation of the pound’s exchange rate against the dollar was necessary in order to apply the economic reform programme in accordance with the plan of the Egyptian government, but this decision had positive and negative effects on the real estate sector.

In terms of the positive effects, the decision led to good financial surpluses for Egyptians holding dollars inside Egypt, as well as the decline in the value of property by 50% for Egyptians working abroad who get paid in dollars—as its value almost doubled—encouraging them to inject their financial surpluses into the real estate market.

This happened for two reasons. The first is that they believe investing in real estate is the best and safest option at the present time, as the rest of the sectors are impacted by the flotation of the pound. The second is the fluctuation of the dollar prices and the convergence of the official price to the parallel market price.

This is what made the hoarding of the dollar not feasible, and that’s why it encouraged the holders of the dollar to inject their financial surpluses to buy property, fearing the decline in the value of the dollar in the coming period.

In terms of the negative effects, the flotation of the pound significantly increased the construction costs of projects due to the high prices of building materials at rates that reached 20% to 100%, excluding the cost of the price of land.

This actually encouraged some companies to increase their units’ prices at the beginning of 2017—the prices having increased by 20%. The prices are also expected to increase by a similar ratio by the end of the year to 40% and may continue to increase if the dollar price continues to increase against the pound. The real value and fair price of the dollar against the Egyptian pound does not exceed EGP 15 in all cases.

I guess that land prices were not affected by the flotation of the pound, but the price of the land is expected to increase, perhaps by 50%, in the coming period. I mean that the real estate developer can address this problem by reducing the net profit margin in its projects to reach 5%.

This percentage will possibly increase in case the developer launched new projects to be implemented on the lands obtained before price hikes.

In terms of the prices of construction material, which increased significantly, we are still working on increasing prices by 40%, which is expected to be affected by the decline within three months.

The flotation or stability of the price of the pound will help real estate companies in preparing the feasibility studies of new projects, along with setting the high risk ratio.

What are the main features of your plans during 2017?

We are targeting to deliver 1,000 units in all projects of the company and also achieve a profit growth rate of 40% in 2017 compared to 2016.

Are you considering purchasing lands in the New Administrative Capital or New El Alamein City?

Fifteen companies provided technical and financial offers to compete in the initial public offering (IPO) of lands in the New Administrative Capital on an area of 1,500 feddans (1,557 acres). I believe this announcement emphasises that there are many inquiries and comments encouraging many developers to refrain from applying for the IPO of these land plots.

We have obtained the conditions booklet, and it stipulates that the completion of the development of a plot of land on an area of 50 feddans (51.89 acres) is to be within three years, with 20% of the price of the land to be paid in advance and the rest of the cost to be paid in five years. In this case, the real estate developer will face two main problems: the financing process for the project and the shortage of skilled labour.

I’m calling the state to adopt the systems that are already followed in many countries around the world and its definition to the general developer with respect to offering lands in new cities, in order to bring about urban development. This will happen when the state connects all the infrastructure works and then divides the land and offers it to the real estate developer at affordable prices, in order to prepare the investment climate for the implementation of the urban projects.

What is the position of the 90 Avenue project?

In March, we launched the third part of the first phase of 90 Avenue, which was met with great success in sales for its special services and construction methods that were implemented for the first time in Egypt. The group has cooperated with the American company WATG to create architectural designs and locations. It has also cooperated with the British company Crankel to design the landscape, in addition to a group of international engineering advisory bureaus, in cooperation with the engineering department of Tabarak Holding for Real Estate Development to produce a new vision that was not present in Egypt before.

90 Avenue is presented to society as a global community on the highest level with all its details. It is divided into three areas, where each is different from the other. It is located on an area of 200,000 sqm, where the first part was completed and the finishing work is currently being carried out. About 25% of the second part is being worked on.

A’aaly Al-Riyadh is your first project outside Egypt. What is its executive position? Are there other projects you are studying to implement outside Egypt? What are your expansion plans outside Egypt? What are the areas you are expected to expand in?

Since 1996, we started implementing real estate abroad where we established several offices in Kuwait, Jeddah, Riyadh, and Abu Dhabi. This made Tabarak Development have a good client portfolio of more than 35% of its total clients. The company also had two offices in Bahrain and Qatar, but as a result of certain conditions, the company had to shut them down and consider opening new offices in America and England.

A’aaly Al-Riyadh is a residential compound through which we aim to transfer the concept of Egyptian architecture abroad. We have already obtained the approval from the Ministry of Trade to start selling, and delivery will take place in June. The project consists of one phase, with an investment cost of EGP 250m. Repeating the experiment depends on the conditions of the Yemeni-Saudi war. If the situation stabilises, we will continue our Saudi projects, especially since we have received several partnership offers.

What are the company’s total investments in the Egyptian market? What are the target investments in 2017?

The company’s investments are currently worth EGP 8bn in real estate, industrial, and agricultural activities. The amounts aimed to be injected in 2017 are estimated at EGP 1.2bn.

What is the operational position of the Capital East Residence project in Nasr City?

In February 2017, we launched Capital East Residence with investments worth EGP 800m. We have used special systems in Egypt to serve our customers. We have six payment systems in order to help our clients reach the most facilitated way of payment. This came after the success in the sales of Capital East Residence. The flats range from 84sqm to 150sqm and suit all levels, with special services, including landscape, a corridor for walking, a mall, and a play area for children, as well as finished integrated entertainment centres.

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Al Naeem to launch new investment funds worth EGP 1bn in 2017 Thu, 06 Apr 2017 12:27:33 +0000 The company has recently completed the obtainment of the licensing for the first real estate investment fund in the Egyptian market

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Al Naeem Holding plans to expand in the Egyptian market through launching new investment funds in 2017. The company has recently completed the obtainment of the licensing for the first real estate investment fund in the Egyptian market. It aims to launch the new real estate fund before the end of this year, as well as study the double registration of the funds in the Abu Dhabi stock exchange.

The company opened the doors for offerings in its first real estate fund for a month, with the public offerings taking lion’s share of the offerings by 80%. The fund is expected to contribute to providing investment opportunities and tempting economic advantages for individuals and institutions represented in commercial and office establishments with distinctive rental income.

Sherif Wahda, the managing director of Al Naeem, said that the target capital of the fund is EGP 2bn, divided into two equal portions. He expected the investments of the first phase’s funds—worth EGP 1bn—to be completed by the end of this year, where the fund will invest the other EGP 1bn in 2018, with a possibility of increasing the fund’s capital.

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Yafa Mac to invest EGP 1.5bn in phase 2 of Emirates Heights Wed, 05 Apr 2017 07:00:56 +0000 Sales revenues expected at EGP 1bn in 2017 as result of a marketing campaign

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Samy Al-Quraini, chairperson of Yafa Mac Touristic Co., said that the company plans to inject EGP 1.5bn of new investments in the second phase of the Emirates Heights project at the North Coast, next to building a yacht harbour.

He explained that the second phase of the project includes 3,000 hotel units in varying spaces, as well as three 5-star hotels. Negotiations to determine the managers of these hotels are still ongoing. The second phase is expected to be completed within four years from the start date.

Yafa Mac had previously initiated negotiations with the Marriott and an Emirati-English company to manage the three hotels. But the negotiations stopped following the problem that faced the company. Yafa Mac relaunched negotiations after the problems were solved.

Al-Quraini noted that the company will not implement the hotels before signing the managing contract, as each company will require different specifications.

Meanwhile, he said that Yafa Mac targets sales of EGP 1bn from the units of the second phase of the Emirates Heights project in 2017, as a result of a huge promotion campaign.

He pointed out that the company completed 80% of the first phase, where it aims to deliver 700 units of that phase during the second half of 2017. The remaining units will be delivered in 2018. The company will continue furnishing the first phase units and implement the services and entertainment aspects of the project.

The company delivered 500 units during 2016 and early 2017.

Al-Quraini said that the company had undergone a complete restructuring of all its departments following the recent crisis and amid a challenging economic environments and a decline in tourism. The stability of the economy recently put the company back on track, where it is now working hard to win the confidence of its clients and complete handing over the units to the clients.

He pointed out that the company cancelled 30% of its contracts in the first phase as several clients did not pay the agreed instalments and only paid 10-20% of total unit price after the flotation of the pound.

Yafa Mac has signed contracts with consulting offices to prepare for the third phase of the project to begin its new Emirates Heights Elite phase.

Al-Quraini noted that Emirates Heights investments jumped from EGP 4bn to EGP 7bn following the flotation of the pound. The project is located on an area of 1.25 million square metres. The company developed 50% of the area and is working to complete the remaining parts.

Furthermore, he pointed out that the undeveloped lands portfolio of the company reached 850,000 square metres, aside from Emirates Heights in the North Coast, Alexandria, Borg El Arab, and Maamoura.

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ARDIC to deliver Zizinia El Mostakbal by 2020 Mon, 03 Apr 2017 15:12:56 +0000 Investments projected at EGP 1.2bn for the company’s Future City project

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ARDIC for Real Estate Development starts carrying out construction works in its Future City development, Zizinia El Mostakbal, with investment reaching EGP 1.2bn, according to Ashraf Dowidar, ARDIC’s managing director.

Dowidar said that the company will deliver the project consisting of 1,807 housing units by 2020.

He added that his company is the first to carry out projects in Future City, noting that ARDIC is committed to the timetable set for delivery of the project’s units.

Dowidar pointed out that his company is participating in the Cityscape exhibition this year with a unique pavilion to present the details of its Zizinia El Mostakbal compound. The project is located in Future City at the extension of El Teseein Road near Madinaty and 12 kilometres from the American University in Cairo (AUC).

The managing director added that the total area of Zizinia El Mostakbal is about 70.46 acres, 80% of which is allocated to green areas and lakes, which is an unprecedented feat. The project’s units range from 160 to 568 square metres on two-bedroom and three-bedroom apartments, as well as duplexes and several plots of land.

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iCity going beyond international standards: Amr Soliman Mon, 03 Apr 2017 10:00:57 +0000 Mountain View is a leading real estate company currently focusing on its popular iCity project, with two locations; 6th of October City and Tagamoa, in addition to its Chillout Park project, also located in 6th of October City. Mountain View is working to offer prestigious housing units to its clients through unique concepts that address …

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Mountain View is a leading real estate company currently focusing on its popular iCity project, with two locations; 6th of October City and Tagamoa, in addition to its Chillout Park project, also located in 6th of October City. Mountain View is working to offer prestigious housing units to its clients through unique concepts that address diverse residential needs.

iCity is the first housing project worldwide to be constructed on four levels: one level for cars and parking, the second for the islands and houses where people live, the third for gardens, and the fourth for the corniche.

To understand more about these projects, Daily News Egypt met with Amr Soliman, Mountian View’s Chairperson, to learn more.

What new aspect is iCity offering for its clients?

What makes iCity unique is the four levels on which it is constructed. The first city in the world to implement such a concept, the city meets the real needs of its clients by uniquely balancing the desire for easy access, with concerns over road safety, traffic and overcrowding. Addressing these needs and concerns to create a residential community that truly addressed client’s needs, iCity is constructed on four levels: one level for cars and parking, the second for the islands and houses where people live, the third for gardens, and the fourth for corniche. The separation of cars from residential communities allowed us to provide access whilst reducing car traffic and crowding, in fact this is one of the key reasons we experienced such phenomenal demand in phases one and two.

What is special about iCity in 6th of October City?

After the success of iCity in Tagamoa, we wanted to recreate the same success by addressing a wider audience and residents on the other side of the city, through iCity 6th of October City. Based on the same concept the 6th of October project was based on the same philosophy of its Tagamoa counterpart, but added some additional improvements based on other needs of our clients.

iCity of October, offers a prime location; established on 500 feddans (518.9 acres) behind the 6th of October, Shooting Club, which is an obvious advantage for potential buyers. iCity of October as with the iCity of Tagamoa, offers spacious green zones and a massive parking area; however, we will still have several other surprises for our clients in store, so you will have to wait for the latest Mountain View announcements, coming soon.

Is there any increase in the units’ prices after the last changes in the market?

Market prices are subject to multiple factors and we are constantly studying the market to ensure that we offer value for money, through competitive market prices and residential projects that offer international standards of excellence and quality.

How about your sales amount?

The phenomenal success of iCity in phases one and two, is a testament to our success within the market and we are confident we will continue to generate healthy sales numbers this year. In fact we already have a waiting list of clients looking to secure units in the coming phases of iCity, which is of course very promising and highlights customer confidence in Mountain View as a brand.

iCity Tagamoa consists only of housing units, or are there other services?

iCity is much more than a residential development. As the name suggests it’s a city, a fully integrated residential community that caters to all the essential needs of residents, including a school, a social club, and a commercial mall and more. We are currently working to secure the right operators to manage each sector and hope to announce our progress in this area in the coming period.

How do you see the upcoming period?

We are confident that Mountain View will continue to lead the market. Despite concerns by some over the economic crisis and flotation of the pound, we have taken this on as a challenge, to create more unique and innovative solutions that meet and exceed expectations, to help overcome these challenges.

We are also looking forward to announcing several exciting updates before the end of the year.

In addition to iCity, what are Mountain View’s other projects?

Inside Cairo, we also have the Chillout Park in 6th of October City, which consists of villas and focuses on the concept of providing a relaxed, tranquil environment for city dwellers to escape from the everyday stresses of traffic and overcrowding.  We also have a project in the North Coast area too.

Our developments tend to focus on two kinds of projects, which are the various and integrated levels in iCity, and villa compounds, including Mountain View 1 and Mountain View 2.

Which kinds of financing do you depend on?

When it comes to this matter, we are conservative and have so far chosen to rely on self financing. We believe that it is important to build trust and credibility between Mountain View and our clients.

Did the flotation decision impact your company?

Of course everyone to some extent was impacted by this decision, however, the advantage that we have is that our units are constructed on large areas. The strongest impact would be felt by companies with constructions on small areas, such as 50 or 80 feddans (51.89 or 83.03 acres).

What we care about most is that our clients purchase high-quality products at a competitive prices and it is because Mountain View consistently follows this philosophy, that we have been able to successfully over come challenges such as the flotation and continue to flourish.

Additionally, there is market awareness as to where increase in prices originates from, and it would not be for investments, but would be because of the cost of construction, estimated at not less than 50% or 60%.

But it is said that the real estate companies which sold many of their products before the flotation decision are the ones who suffered more, and you were one of these. What is your opinion in this regard?

Yes it is true that we achieved phenomenal sales before the flotation, but we still have a lot more to sell. Keep in mind that what we sold in iCity Tagamoa represents only nearly 10% of our whole land and space.

Before starting any project you mentioned that research and studies are carried out. Can you give our readers a brief about this in regards to the iCity?

As we strongly believe in innovation, before starting iCity we studied what Egyptians need psychologically. In fact, we spent almost a year and a half studying the market and the diverse needs of different Egyptians of different ages and genders. Actually, there was a strong need for the cars to be separated from pedestrians, which is where the idea of iCity was first developed. We are also offering this commodity at an affordable price according to the market.

Our market research however goes beyond just understanding the emotional and physiological needs of our consumers. We pride ourselves on offering the best in international standards of quality and innovation, which is why we also visited more than 16 of the best cities worldwide, to see their models for construction and how we could integrate the best of these cities in to our projects.

The result was iCity; the first city in the world to be constructed on four levels.

So the psychological aspect for the client is taken into consideration?

Of course, and we are very sophisticated when it comes to the psychological requirements of our clients. We have a team that conducts effective research that is able to address and engage clients’ on a personal level. We also work with psychologists who support us in addressing the main concerns and stresses that a resident may face, so that we can identify key concerns and find solutions to them, before they ever even become a source of frustration for our residents.


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Second home market to continue growing: Colliers Mon, 03 Apr 2017 09:00:44 +0000 Lands at New Administrative Capital will be cheaper than other areas, says Ahmed

The post Second home market to continue growing: Colliers appeared first on Daily News Egypt.

In an interview with Daily News Egypt, Mansoor Ahmed, Colliers International’s director for development solutions, healthcare, education, and public private partnership (PPP) in the Middle East and North Africa, said that Egypt is witnessing growing investment in the second home market as it is cheaper than other areas in Europe and the US in light of the currency devaluation.

Can you arrange the most areas in Egypt in demand for second home? 

The first important thing is who is buying these second home units. 90% of people who buy these units are married and have children. In a survey conducted a couple of months ago, it was revealed that the amount of money paid for the unit is decided by the husband, but the wife decides where to buy it. The survey also showed that 98% of people who buy second homes are Egyptians.

The most popular now is Ain Sokhna because it costs roughly 30% less than the North Coast. Additionally, Ain Sokhna is close to Cairo, as it only takes two hours to get there. 54% of people buy in Ain Sokhna, 38% buy at the North Coast, 4% buy in Ras Sidr, and 4% buy in other places. Therefore, people are now turning to use Ain Sokhna as a permanent home because of the availability of education services, like schools, besides health services.

Furthermore, Sharm El-Sheikh is also in demand as the area used to rely on international tourism. But because of the current situation, the international tourism is becoming less than before so prices went down so most people going to Sharm El-Sheikh are Egyptians.

We expect that international tourism will rise again because of the appreciation of the dollar against the Egyptian pound. The international tourism is expected to gradually improve, but it will not resume overnight. But after about a year and a half, a lot of international tourism will start coming from Europe.

How does the devaluation of EGP affect the second home market?

I believe that the devaluation could have a positive impact on international tourism, which will definitely have a positive impact on the second home market.

Holiday homes in Egypt, with the exception of El Gouna, remain relatively affordable compared to other popular vacation home markets studied by Colliers.

For example, El Gouna is less than half as expensive as Mauritius, Cyprus, and the Seychelles.

We believe that within one year, more and more people will come to invest in Egypt. However, the second home market is primarily for Egyptians, as only 2% of customers are foreigners, and we don’t expect that this percentage will change. Thus, developers should know the Egyptians’ needs regarding second home units.

Why do you expect that the percent of foreign clients will not change?

One of the restrictions is that foreigners cannot sell or rent their units before five years have passed. Additionally, they cannot buy more than two homes, with the cumulative maximum area being 4,000sqm. If property ownership is obtained through a court verdict, the process can take six to eight months.

What is the size of the second home supply?

Over the past 11 years, the number of vacation homes has increased by approximately 90%, reaching approximately 65,000 units by the end of 2016. Furthermore, a lot of supply is coming to the market, as another 65,000 units are to be delivered during the next five years.

The most popular hotspots for vacation homes are the Red Sea, South Sinai, the North Coast, and Ain Sokhna. While Ain Sokhna, the North Coast, and the Red Sea have always been popular, South Sinai has the most vacation homes under construction.

How can the second home market be improved?

People come to spend school vacation in their second homes in the mentioned areas due to a lack of educational services. We have observed that in Europe, the US, and Asia the second home market is supplied with healthcare and educational services. Nevertheless, Egyptian second home areas need to be connected with these services based on the fact that Egyptians spend a lot of money on education. International schools can be opened in the second home areas to include the children of people who have units in these areas as parents who work in the capital can see their children every one or two months.

Moreover, there is a positive thing that happened last year: at least five top school operators from the US and the UK want to invest in Egypt.

Do you think that the New Administrative Capital will increase demand on the second home market?

I think as the New Administrative Capital is being developed, it will have a positive impact on this market, especially in Ain Sokhna and then the North Coast. I expect that the development of the New Administrative Capital will turn Ain Sokhna to widely become a first home for Egyptians.

Do you think that the market will witness saturation in second home units during the coming five years?

No, I think during the coming five years, there will be a lot of demand. As population is growing—the Egyptian population increases by 2.5% annually—the demand will increase.

The demand doubled in five years, and we don’t expect that demand will go down, but rather that within the next five years the demand will double. However, the increase of demand for example may drop to 10% per year instead of 20% as it will gradually slow down.

Saturation may be reached for chalets and big units, but the demand is still high on one bedroom or two bedrooms units, so the developers have to diversify their products to avoid saturation and target a wider market.

What is your expectation regarding the prices in the second home market during the currency fluctuations?

Prices may go up by 30% but not more, because Egypt started to produce building materials, reducing dependence on imports; therefore, prices will stabilise. However, prices for Cairo will increase by 20%.

People buy second homes as investments to face currency fluctuations as a safe haven and often intend to sell it after prices go up.

Can you estimate the percentage of customers to whom second homes are just an investment opportunity?

I think the percentage of people who buy for investment purposes is 30% to 40%.

What kind of real estate at the New Administrative Capital will witness the biggest demand?

At the New Administrative Capital, there will be everything—more offices, administrative offices, residential units, schools, and hospitals, since lands at the New Administrative Capital will be cheaper than other areas, for example the Fifth Settlement.

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Wadi Degla Developments targets EGP 5bn of sales Mon, 03 Apr 2017 08:30:13 +0000 Neopolis, Mada, Blumar are among the companies’ most prominent projects

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Wadi Degla Developments is presenting its package of tourism and housing projects during the current Cityscape exhibition. The company plans to gradually raise its prices throughout the current year. Moreover, Wadi Degla aims to increase the size of its land portfolio by buying new plots or entering partnerships.

Deputy CEO of the company, Amr El Kady, said that the company is expecting revenues to amount to EGP 5bn for 2016 through selling 3,000 units. He added that the company is set to launch two projects in the summer at the western North Coast and in Hurghada.

He noted that the company is presenting many projects under development during the Cityscape exhibitions, including touristic and residential projects. The company is offering extended payment plans of up to nine years at the conference, up from the previous seven years.

El Kady said that the total size of contracts at the end of 2015 reached EGP 3bn, which increased to EGP 4bn in 2016. The plan is to reach EGP 5bn in 2017.

Furthermore, the company intends to increase the size of its land portfolio—which currently stands at 8 million square metres in six areas—through buying lands from the Ministry of Housing or entering partnerships with other developers.

Wadi Degla Developments owns lands in eastern Cairo, which account for 70% of its portfolio of 20 projects. The total number of the company’s units amounts to 36,000 residential and tourism units, while 10,000 units were delivered.

El Kady pointed out that the company’s most prominent projects include Neopolis City—which is the largest of the company’s residential project on an area of 545 feddans in the Future City in New Cairo.

Neopolis City consists of 15,000 residential units, both apartments and duplexes. The project is carried out over four phases. The first phase units will be delivered within four years. The total cost of the project amounts to EGP 13bn.

Additionally, another company’s project is Tijan in Maadi, which is established on 18,000 square metres. The project consists of 650 residential apartments. It will be implemented over four years with investments of up to EGP 320m. Promenade Residence in Zahraa Maadi is another project nearby, which overlooks Wadi Degla Sporting Club on an area of 34,000 square metres. It consists of 26 buildings, including apartments and duplexes.

El Kady said that the company is promoting Promenade Residence New Cairo, which is based on an area of 14,000 square metres and including 1,000 units.

He pointed out that the company plans to increase prices gradually by 2-3% multiple times. He explained that real estate prices go up naturally by 20% every year.

Wadi Degla Developments was established in 2005. The company is specialised in construction and property development and has 20 real estate projects in the fields of residential and tourism projects. It is a subsidiary of Wadi Degla Holding.

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First Egypt Property Show to kick off in Dubai Mon, 03 Apr 2017 08:00:25 +0000 Real estate market recorded a 30% increase in investments in 2015 alone

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Egypt Property Show, the first global Egyptian real estate road show featuring premium development from Egypt’s top developers, will kick off in Dubai from 5 to 7 May at the Dubai World Trade Centre.

The show aims at providing an array of luxury properties and turnkey solutions for Egyptian homebuyers living abroad as well as foreign investors.

The CEO of Spectrum Consultants and head of Egypt Property Show, Wahid Attalah, said that Egypt’s real estate market remains one of the most robust in the region; therefore, it is an opportunity to reintroduce to the world this vast underutilised market.

The event is the first in a series of exhibitions, which will also be held in many regional and worldwide cities.

Market research has revealed that Egypt’s real estate sector has grown exponentially between 2013 and 2015. The market recorded a 30% increase in investments in 2015 alone.

Egypt has invested about EGP 43bn in the real estate sector since 2013, compared to EGP 20bn of investments during the last 30 years.

The three-day show has strategically chosen to launch in Dubai given the large number of Egyptian expatriates and Arab investors residing there.

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Real estate developers offer properties with 0% down payment at Cityscape Mon, 03 Apr 2017 07:30:49 +0000 Cityscape exhibition has grown by close to 10% in the current year, says exhibition director

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Both Tatweer Misr and Emaar Misr are offering a 0% down payment and a seven-year payment plan on a few of their properties at Cityscape exhibition.

Additionally, PACT will be offering an eight-year payment plan for White Bay, located in the North Coast’s Sidi Heniesh.

El Batal Group launched its latest compound in Obour City, composed of villas only, as well as Rock Elite, a smart residential compound with fully furnished studios.

The group will be offering a special cash offer deal: buy one apartment, and get the other apartment for free, with a 25% down payment.

ARDIC For Real Estate Developments is showcasing Zizinia El Mostakbal, built on 70 acres and comprising apartment complexes with a total of 45 buildings and 1,800 units.  The company provides payment facilities for customers during Cityscape exhibition for some units within the project, offering payment of 10% of the total value and payment over 10 years.

From his side, Tom Rhodes, exhibition director at Cityscape, said that the exhibition has grown by close to 10%, with this year’s event emerging as the largest in the show’s history, renting out all halls.

Rhodes added that the opening of the exhibition was immensely successful, with thousands of visitors queuing up to see the future of Egypt epitomised in the company’s exhibitors’ projects and to gain insight on their next real estate purchase.

Some of the exhibitors at this year’s event include Al Arabia Real Estate Development (ARCO), Palm Hills, PACT, Aloula Tameer For Mortgage Finance, Aristo Developers, Beta Egypt for Urban Development, Capital Group Properties, Egyptian Engineering Development and Real Estate Investment, El-Batal Group, Emaar Misr, Invest4Land (API Investment), Madaar Development, Pandora Investments Public Ltd-Leptos Estates, Rooya Group, Talaat Mostafa Group Holding, Tatweer Misr, Trends Real Estate, and Wadi Degla Developments—just to name a few.

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SODIC targets sales of EGP 5.6bn in 2017 Mon, 03 Apr 2017 07:00:35 +0000 Company obtained credit facilities of EGP 2.2bn, 55% of which was utilised

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Sixth October Development and Investment Company (SODIC) aims to increase its land portfolio. The company allocated EGP 3bn for investments in 2017. Moreover, the company targets sales of EGP 5.6bn.

Daily News Egypt interviewed Maged Sherif, CEO of SODIC, to get a better understanding of the company’s current position in the market and its future plans.

Is the company planning to increase its existing portfolio of land?

The current land portfolio requires 12 years of development. We have six million square metres of land already, and we have allocated EGP 600m to buy new plots in 2017.

What is the size of the company’s investments during the current year?

The company plans to invest EGP 3bn in the current year, including EGP 2.1bn for the construction works. We are also set to pay EGP 848m to the New Urban Communities Authority (NUCA) in instalments for land.

What was the size of investments last year?

We invested EGP 2.8bn last year and paid EGP 883m to the NUCA.

The size of lands expected to be bought this year is linked to the size of offerings posed by the Ministry of Housing. We will buy or enter partnerships as long as the prices are reasonable. We urge the ministry to begin offerings after an 18-month hiatus.

Is the company seeking to acquire new lands in Sheikh Zayed?

The company is looking forward to the ministry’s offering of 410 feddans in Sheikh Zayed. These lands were offered before, but they were not awarded to any company. The location of these plots is adjacent to our existing projects, which is why we aim to compete on acquiring them.

How many projects were put forward by the company during the first quarter of this year?

The company has launched three projects in the first quarter of the current year and achieves satisfactory sales. These projects include part of the One 16 project in SODIC West and October Plaza, as well as one phase in the East Town project. We are preparing to offer a new part this year, such as the buildings district in the Villette in New Cairo. This is a separate project that is five minutes from East Town. The area of the project is 301 feddans.

How much did you raise the prices after flotation?

We raised the prices by 20-30% after flotation. This is a natural response to the cost increase following the flotation. The new phases built after flotation have different pricing policies linked to costs. But we stuck with our payment plans.

What is the size of sales achieved by the company’s projects?

We sold 95% of the projects we posed last year. We also obtained EGP 2.2bn of credit facilities; yet, we only used 55% of it.

Have you applied to acquire lands in the New Administrative Capital?

We did submit a proposal with the price we believe fit, in light of the several challenges the project has, such as time constraints, lack of vision about infrastructure, transportation, and public utilities. The state is also competing on implementing units at the project.

The first offering for lands in the new capital included 15 land plots, totalling an area of 1,500 feddans. 13 companies were qualified to buy 9 plots of 1,090 feddans, at a price ranging between EGP 500 and EGP 2,750 per square metre, including SODIC, which wanted 50 feddans. The 6 remaining plots saw no bids.

Will the company submit a proposal in the second phase of the ministry’s offerings?

We plan to compete on the lands in 6th of October City and Sheikh Zayed.

NUCA will put forward 15 plots as part of the second phase of its partnership projects with the private sector companies. The lands will be in New Cairo, Sheikh Zayed, 6th of October City, New Damietta, and New Aswan. The bid is expected to take place before June.

The plots will be awarded to the companies that can grant the NUCA the biggest share in the project, while maintaining the least implementation time. The NUCA has so far signed four partnership projects put forward during the economic summit in Sharm El-Sheikh in March 2015. The total cost of these projects amounted to EGP 131bn for 2,000 feddans.

Did the company complete the New Heliopolis master design plan?

We did complete the plan. The project will be established on 655 feddans between the cities of Badr and Shorouk. It will be completed in partnership with Heliopolis for Housing and Development, the company which owns the land.

What is the size of investments for this project?

Investments for the project amounted to EGP 20bn. This includes the price of the land.

How much is the expected revenue?

The project is expected to return EGP 30bn. It will take place over three phases, with a total of 8,600 units of different categories.

What is the share of Heliopolis for Housing and Development in the project’s revenue?

Heliopolis for Housing and Development’s share is 30%. The company will also obtain 30.2% of revenue from commercial and administrative units, with a minimum of EGP 5.01bn. On the other hand, SODIC obtains 70% of revenues, as it will handle all development, starting with the infrastructure and utilities, to the furnishing of the projects.

When will the first phase be launched?

The company plans to launch the first phase of the project during the third quarter of this year.

We will be committed to delivery dates. We will assign contractors specific works to match with our timetable. We are still in negotiations with the contractors to decide the amount of compensation after the cost hikes as a result of flotation. These negotiations are set to be completed in the second quarter of this year.


How many residential units in the partnerships projects are expected to be delivered this year?

We aim to deliver 1,150 units this year in different projects.

What is the situation of the real estate sector in light of the current economic conditions?

The real estate sector managed to achieve high growth rates over the last period. Many clients put their investments in real estate as they consider it a safe haven.

I expect the market to see more sales in the coming period. An indication of this is the rate of sales achieved in our partnership projects that were offered early this year.

How much was SODIC’s profits in 2016?

SODIC’s consolidated profits rose by 37.3% in 2016, to reach EGP 441.4m. Net profit stood at EGP 321.3m in 2015.

What was the size of profits and revenues in 2016?

Our revenues increased by 42.9% compared to 2015, where the revenues registered EGP 2.1bn in 2016, up from EGP 1.47bn in 2015.

Profit registered EGP 222.5m in 2016, up from EGP 213.2m in 2015, marking an increase of 4.4%.

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Misr Italia Properties launches Cairo Business Park hotel Sat, 01 Apr 2017 13:30:25 +0000 Suez Canal and New Cairo attracting significant infrastructural investment, says Hilton vice president

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Misr Italia Properties signed a cooperation agreement on Friday with Hilton Worldwide to launch Hilton Garden Inn located at Cairo Business Park in New Cairo.

Hilton Garden Inn will provide customers and visitors with a new concept of independent administrative offices within an integrated business community to match financial and business capitals across Europe.

Co-CEO of Misr Italia Properties Mohamed Hany El Assal said that Hilton Garden Inn would offer services to Cairo Business Park customers, including a gym and fitness centre, a garden lounge, a swimming pool, and a modern fine dining restaurant.

From his part, Carlos Khneisser, the vice president of development in the Middle East and North Africa for Hilton, said that the expanded Suez Canal and New Cairo are both attracting significant investments, and it is the right time for the company to revitalise its Egyptian portfolio with new projects in these emerging locations.

Khneisser added that New Cairo’s vision to become a thriving hub for business makes it an ideal location for the company to introduce the Hilton Garden Inn brand to the capital.

Misr Italia Properties previously signed a contract with Hilton to manage and operate a five-star hotel in Kai Ain Sokhna.

Kai Ain Sokhna spans an area of 147,000 square metres with a beach extending 1,200 metres. The project offers a diverse range of units, including luxurious villas and chalets. The project is located at kilometre 15 on the Zafarana Road, close to the New Administrative Capital.

Kai Ain Sokhna is considered a second home project, and it won the Residential Low Rise Project Future Award at Cityscape 2017.

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NUCA plans to expand land offerings for different segments of society Thu, 30 Mar 2017 17:00:40 +0000 NUCA is forming a committee to follow up on the application of real estate regulations in the new cities

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The New Urban Communities Authority (NUCA) is planning to expand land offerings for different segments of income besides facilitating the work of real estate companies in the new cities subsidiary to NUCA. This will happen through the application of new real estate regulations in all cities, according to vice chairperson of the New Urban Communities Authority (NUCA) for real estate and commercial affairs, Tarek El Sebaay.

NUCA completed the phase concerning resolving investors’ problems and launched a new axis for real estate investment distributed on individuals and companies inside and outside Egypt and including average and luxurious residential units.

El Sebaay considers real estate regulations as a new constitution for the NUCA, which avoids problems related to the previous real estate regulations in order to cope with the targeted plan of the investment.

NUCA held several sessions with the real estate development companies to find satisfactory solutions for both parties. Even if the satisfactory ratio reached 90% on the items of the regulations, it will be considered an accomplishment.

The regulation itself is adjustable according to the developments of the real estate sector. The ongoing discussions with the representatives of the market are necessary because the main goal is to reach an ongoing urban development mechanism that satisfies both parties and ensures the right of the state and provide the developer with a good return on investment.

The regulation includes new items such as the development of the public developer mechanism for developing new urban communities and items to govern the partnership between the NUCA and the private sector.

The real estate regulation allowed the NUCA to seek help from major real estate developers to accelerate the new urban community development in accordance with the rules laid down by its board of directors.

He added that the NUCA will cooperate with the federation of developers that is planned to be established to classify the real estate investment companies, according to several technical, administrative, and financial rules approved by the board of directors of the NUCA. Their classification will determine who will be invited to apply for obtaining the land in accordance with the abilities of each company.

El Sebaay expects the growth rates in the real estate sector to be high during this year, especially after offering large tracts of land for real estate and industrial investments, as well as offering lands for low- and middle-income individuals.

He furthermore said that the NUCA began offering the first phase of the residential lands with a total of 500 pieces in Nasser, West Assiut, and Qena in Upper Egypt, all of which are set to start being developed during the current fiscal year.

He explained that applicants must be Egyptians, whether companies or institutions, and applicants must be aged 21 and above at the time of the announcement. The conditions booklet will be obtained from the Housing Development Bank (HDB) in Qena and Assiut, and booking applications can be submitted from 9 to 27 April. The booking deposit value amounts to EGP 50,000, and a public lottery will be held in accordance with the availability of land plots and spaces.

If somebody acquires a piece of land, a payment of 25% should be completed, in addition to 1% from the total value of the land for administrative expenses and 0.5% for the board of trustees within a period of two months starting from the date of the lottery. The rest of the price of the land, 75%, will be paid in three annual instalments—the first instalment must be paid after one year.

The NUCA will deliver the land 12 months after the payment of the 25% of the total value. The construction work is to be completed within three years from the date of the delivery of the land.

31,000 new pieces of land

El Sebaay noted that the NUCA will offer 31,000 pieces of land to individuals, distributed on social housing, distinguished housing, and outstanding housing.

The pricing committee at the NUCA is currently specifying the selling price per square metre to be allocated for social and distinguished housing through a public lottery, while the outstanding lands will be sold through an exclusive auction.

Lands are distributed on 14,800 plots for social housing in 11 cities, 10,400 plots for distinguished housing in 13 cities, and 6,164 plots for outstanding housing in 10 cities.

NUCA offered more than 80,000 pieces of land over the past year, distributed through a lottery, including 21,300 plots for social housing, and 58,800 plots distinguished and outstanding housing units—in addition to 2,224 distinguished plots in the 10th of Ramadan City in a separate offering.

He explained that the real estate and commercial affairs sector developed a plan to activate the NUCA’s resources through offering investment lands for real estate companies and to individuals to be distributed on different axes of income.

Increasing the offering of the lands allocated to individuals aims at preventing lands’ trafficking and brokering. The one wishing to obtain a land will establish a house, unlike the broker who buys the land to resell it to obtain extra profit.

He noted that the NUCA deal with the developments of the real estate sector and has recently decided to grant real estate companies a six-month period free of charge to complete their projects, which are being established on the lands of the NUCA.

El Sebaay said that the NUCA has offered a number of pieces of lands for real estate companies during the current fiscal year and priced them in US dollars.

The NUCA allocated 155 acres in New Cairo to the Saudi company Najd Nile in order to establish an integrated urban project, 31.5 acres to Karnak for reconstruction and development to establish a medical city with an integrated university, and 15,800 to Arabian Andalusia Holding Company to set up a hospital.

The direct allocation will be done according to several criteria, including the financial solvency of the company which conducts the development of the project, meeting the technical conditions, and considering the payment of the land value in dollars.

Dar Misr for social housing

Furthermore, the technical opening for the offers of the competing companies over 48 pieces of lands in Dar Misr housing project for low- and middle-income citizens started.

The NUCA received 357 offers from competing companies over the 48 pieces of lands out of 98 offered in 10 new cities.

The NUCA announced 98 land plots through the one-stop shop at GAFI within two social housing projects for low-income citizens and in a Dar Misr for social housing project at 110,000 metres and 540,000 metres.

Lands will be allocated for the establishment of service and investment activities, divided between commercial, administrative, and commercial, residential, and entertainment facilities, as well as hypermarkets, nurseries, integrated schools, and several other amenities.

The booking value amounts to 5% of the price of the land, or an amount between EGP 8,600 and EGP 18,300, according to the location and size of each piece of land.

The NUCA offered services lands in eight cities and sold 15 pieces of land worth EGP 298m out of 44 plots on spaces varying between 93,000 square metres and 935,000 metres.

El Sebaay said that offering lands on Dar Misr’s websites aims at providing services to the population, where NUCA will begin to deliver the units of the first phase to those who booked them for the coming period.

He pointed out that the NUCA is preparing for the second phase of the integrated urban investment offering through the one-stop shop system at the GAFI.

The first phase of the urban investment lands offering saw 40 companies applying for booking 17 pieces of lands out of 64 pieces of lands on areas ranging in size between 3.5 acres and 106 acres, which have been announced in 20 new cities. 12 pieces of lands worth EGP 698m were allocated.

Solving the problems of the investors

NUCA was working hard in the past period on resolving the problems of the investors and made many compromises. The compromises included scheduling the payment of the dues to the NUCA, studying the demand on the real estate communities, and approving many controls to ensure that the projects development rates will not be delayed.

He said that we need to change the concept of “disputes and settlements” because the NUCA did not have disputes with the developers over funds to be settled, but the debate is over guaranteeing the rights of the NUCA without wronging the investor through deducting lands or imposing new fees—provided commitment to development, according to El Sebaay.

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NUCA completes 65% of its investment plan in FY 2016/2017: Mamdouh Thu, 30 Mar 2017 16:30:43 +0000 The authority spent EGP 24bn on social and middle-income housing projects, as well as installing facilities

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The New Urban Communities Authority (NUCA) has completed the implementation of 65% of its investment plan for the current fiscal year (FY) 2016/2017. The authority spent about EGP 24bn, out of a total EGP 37bn allocated for investment by the end of June.

NUCA seeks to increase its investments to EGP 50bn in the next FY and complete the implementation of infrastructure projects and facilities of social and middle-income housing projects in the new cities.

Abdulmutallab Mamdouh, supervisor of the urban development sector, said that the authority’s expenditure was directed to social housing projects for low-income people and Dar Misr for middle-income people, as well as water and sanitation facilities.

NUCA’s investments amounted to EGP 37bn in the current FY, with an increase of EGP 15bn compared to the last year, distributed over three key sectors: the housing sector registering at EGP 20.4bn, the infrastructure projects and facilities at EGP 14.9bn, and the agriculture and services sectors at EGP 1.8bn.

6th of October City acquired the highest allocations—worth EGP 7.8bn—from NUCA, followed by New Cairo with EGP 5.5bn, 10th of Ramadan City with EGP 3.6bn, New El Alamein City with EGP 2.9bn, and Obour City with EGP 2.8bn.

According to Mamdouh, NUCA aims to complete its investment plan by June and prepare its new plan for the next FY.

NUCA takes over the installment of facilities at about 80,000 pieces of land, which were publicly offered for sale over the last year. The authority would also install facilities on 31,000 other pieces of land planned to be announced soon, with expectations to be completed in December. The new cities’ departments will set the timetable of delivering the housing units for the winners.

The New Administrative Capital

Mamdouh pointed out that the volume of works accomplished in the New Administrative Capital are worth EGP 2.5bn, out of EGP 9bn allocated by the authority to implement the housing units and facilities until June.

He added that construction companies installed the facilities on 3,130 feddans (3,248 acres) in the first phase of the project, in addition to the residential units.

A number of construction companies took over the building of 26,000 residential units on an area of 1,000 feddans (1,038 acres), including the Arab Contractors, Talat Mostafa Group (TMG), Petrojet, Concord Engineering and Contracting, the Holding Company for Construction and Development (HCCD)—affiliated with the armed forces—and Nile Valley Contracting and Real Estate Investment.

The cabinet has assigned four contracting companies to implement the facilities on about 40,000 feddans (41,510 acres)—worth EGP 4bn—in the first phase of the capital. The four companies completed the facilities of 3,130 feddans (3,248 acres), distributed as follows: 1,130 feddans (1,173 acres) by the HCCD, 740 feddans (768 acres) by the Alliance of Orascom and Hassan Allam Sons, 710 feddans (736.9 acres) by Concord, and 550 feddans (570.8 acres) by Arab Contractors.

The first phase of the New Administrative Capital is due to be built on 12,000 feddans (12,450 acres)—with initial investment of about EGP 60bn—out of a total 170,000 feddans (176,400 acres) allocated to build the new capital. The management company of the project was established with paid-up capital of EGP 6bn, distributed among the armed forces and NUCA.

The contracting companies will complete the establishment of 17,000 units in the residential area during December, while the completed units are expected to reach 26,000 in June 2018, including residential units, villas, and twin houses.

The third residential area is on an area of 1,000 feddans (1,038 acres) and divided into eight neighborhoods, including 328 villas, 624 twin houses, and 699 residential buildings, with a total of 19,900 units. It also has another 140 buildings, including 3,360 residential units and 1,120 commercial units.

New El Alamein City

NUCA is set to launch the first phase of land service in New El Alamein City during the month of April and the authority will establish a touristic boulevard and a corniche in the city within two months, according to Mamdouh.

He added that there are about 35 social housing buildings under construction in the city, consisting of 1,500 units, noting that the construction site was delivered to the executing companies.

The NUCA has removed buildings and pasture obstructing the path of the international coastal road project at a total length of 48km, while the Arab Contractors Company has completed the paving of about 28km in different areas in both directions.

The total area of New El Alamein City amounts to 48,000 feddans (49,820 acres). The first phase includes two key regions on an area of about 8,000 feddans (8,303 acres), including the coastal, archaeological, and urban areas with an expected population of 400,000 people.

East Port Said City

The armed forces took over the establishment of 4,940 units in East Port Said City, while the local authority of the city offered another 3,420 units.

The location of the new desalination plant has already been determined with a total capacity of 250,000 cubic metres per day. It will serve the port, the industrial area, and the city. The location maps were sent to the consultant in coordination with the armed forces, Mamdouh said.

NUCA is preparing the detailed designs of the tourist beach and its walkway in coordination with the city’s consultant. NUCA will also address the Suez Canal Authority to conduct marine surveying after completing the designs of the beach.

Upper Egypt Development

NUCA has developed a plan for the development of Upper Egypt, including Nasser-West Assiut and West Qena cities. Mamdouh said that the authority has allocated 1,600 feddans (1,661 acres) to implement the urgent phase of both cities and prepare the facilities’ designs, in preparation to offer the project for the contracting companies.

Nasser City is located 25km away from the Nile River and about 28km from New Assiut City, on an area of 6,500 feddans (6,746 acres). The urgent phase’s area of the city amounts to 800 feddans (830.3 acres) and includes luxury and social housing, as well as service centres.

West Qena City is located on the west bank of the Nile River—about 20 km away from New Qena City—on a total area of 8,112 feddans (8,419 acres). The urgent phase’s area of the city amounts to 800 feddans (830.3 acres). It includes various levels of housing, as well as social activities, and service centres.

Tourist Belt in Aswan 

NUCA launched the first phase of the Tourist Belt development project in New Aswan City, including a hotel on an area of 3 feddans (3.114 acres) and 75 villas on an area of 14.5 feddans (15.05 acres), as well as a large garden on an area of 11.8 feddans (12.25 acres). The entertainment complex of the city includes a shopping mall consisting of 30 shops and a cinema complex on an area of 10 feddans (10.38 acres). Additionally, the authority will prepare a tourist walkway on an area of 2 feddans (2.076 acres), including 60 shops, 3 administrative buildings, a restaurant, and 5 cafeterias.

The Tourist Belt of New Aswan is located on the Nile River. It will be divided into several areas, including investment and tourism land, the hospital—implemented by Magdi Yacoub—housing units, tourist villages built in Nubian style, a commercial centre, tourist housing, and a downtown area.

NUCA will take over the establishment of the mall and villas, while a number of investment lands will be offered for real estate development companies.

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Samcrete launches EGP 600m project by the end of 2017 Thu, 30 Mar 2017 16:00:01 +0000 We are planning to develop a residential project in eastern Cairo with investments of EGP 2.5bn, El-Kheshen says

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Samcrete for Urban Development Company plans to develop a residential project in 6th of October City in the next year, which will be an extension of its Pyramids Heights project, with investments of EGP 600m. The company also targets to develop a residential project in eastern Cairo with investments of EGP 2.5bn, and expects the Ministry of Housing’s offering of the second phase of the partnership projects.

Hisham El-Kheshen, managing director of Samcrete for Urban Development Company, said in an interview with Daily News Egypt that the extension of the Pyramids Heights project is expected to be built on an area of 50 acres. The company will start the establishment of the new residential project in early 2018.

What are the company’s future plans?

The company plans to develop a residential project in eastern Cairo this year with investments of EGP 2.5bn, in partnership with a real estate developer. The company has reached the final stage of negotiations over that partnership.

We are currently studying the launch of a tourist project in the North Coast region, and the company is searching for suitable pieces of land with areas ranging between 50 and 100 acres. It comes within the company’s investment plan for this year.

The investment cost of the Pyramids Heights project in 6th of October City increased to EGP 1.2bn after the flotation of the local currency.

What is the size of construction works which the company targets to implement?

Samcrete aims to implement construction works worth EGP 250m at the Pyramids Heights project this year, as part of its plan to accelerate the implementation of the project.

The total investments of the Pyramids Heights project reached EGP 3.2bn, consisting of two phases. The first phase was built on an area of 211,000 square metres, and was completed in 2000.

It has ten buildings including 12 local and international companies and about 640 housing units. It is planned to start delivering these units in the first quarter of 2020.

The administrative area in Pyramids Heights includes 14,000 square metres ready for use, in addition to another 35,000 square metres which have not been developed yet. The company is working to complete the whole project over the next five years.

How do you see the real estate market in light of recent changes?

The real estate market has seen many changes after the flotation, mainly the increase of residential unit prices by 20-25%. This increase affected the purchasing power of customers, so the market created new mechanisms to deal with those changes through offering facilitations in payment.

Real estate companies extended payment deadlines up to ten years. Such a step could only be taken with the companies which have a financial solvency, because this measure will affect the sale proceeds, which represent the main supporter of the companies in the implementation of their projects and commitment to deadlines.

It is difficult to predict the situation of the real estate market in the coming period, however there is an expected increase in demand, and the companies are expected to accelerate the implementation of their projects despite the increases in construction material prices in order to enhance their competitiveness.

The companies with strong financial solvency will seize new investment opportunities, securing large profits in the coming years. I expect that this year will witness great opportunities for companies that present clear investment plans.

What about the administrative projects?

The administrative projects have seen a change in the type of target customers. In the past, the real estate companies used to deal with global companies operating in Egypt, offering special designs and specifications that fit their requirements. The companies now tend to make changes in the nature of units to suit the needs of local companies.

Our company increased the prices of Pyramids Heights’ units gradually, after the liberation of the exchange rate, to maintain the company’s marketing plan and achieve the company’s target size of sales for the last year.

Would real estate companies change their policy of selling or marketing?

The real estate companies will certainly change the areas of housing units to fit the purchasing power of target customers, as well as finding solutions and alternatives to achieve optimum exploitation of the units. I rule out any decline in sales. Actually, the last three months witnessed an increase in sales, despite the high prices, due to the long payment periods.

Samcrete seeks to provide technical training for workers in the real estate sector through the National Academy of Sciences and Skills affiliated to Samcrete Holding—specialised in construction technology—in collaboration with a number of international partners for the development of technicians to compete with other companies nationally and internationally. The programme aims to develop Egyptian workers and enable them to work outside Egypt, in an attempt to solve the problem of unemployment and provide foreign exchange resources.

The government is keen to improve the Egyptian economy through increasing production and the development of national projects.

Does the real estate sector still offer safe opportunities for investment?

The real estate sector offers the most secure investment opportunities in Egypt, whether for housing or investment, which preserves the value of money more than any other sector, due to the high demand. I just urge the citizens to purchase their units from reliable companies.

On the other hand, the real estate market still faces several legal challenges, notably the delay in the issuance of the tenders law and the union of real estate developers law, as well as the new real estate regulations. The sector also faces economic challenges due to the high price of the dollar and, in turn, the construction materials prices, in addition to the lack of skilled workers.

Does the real estate sector still experience recession or has it begun to recover?

Egypt’s real estate market has been witnessing a recovery thanks to the undergoing state national projects, following the 25 January revolution and the subsequent events, which negatively affected construction companies. I expect that the construction sector will face some challenges in the implementation of the new projects, mainly the shortage of skilled labour and equipment, and difficulties in obtaining funds due to the high price of the dollar against the pound, as well as other factors that may limit the competitiveness of these companies.

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Hyde Park develops project on North Coast in July, investments reach EGP 12.5bn Thu, 30 Mar 2017 15:30:44 +0000 Company’s plan includes developing projects in 6th of October, Sheikh Zayed, Red Sea

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Hyde Park Properties for Development is set to offer the first phase of its tourism project on the North Coast in July and plans to implement the bulk of the work in the New Cairo project.

CEO of the company, Amin Serag, told Daily News Egypt in an interview that its North Coast project is on an area of 225 feddans (233.5 acres), which will be developed in six phases over six years. The project will include 1,000 units, a hotel district, and a commercial site with investments reaching EGP 12.5bn.

He explained that the company has been looking for a suitable area on the North Coast for one year, but faced some difficulties looking for the best-suited land.

What are the details of the Hyde Park project?

The company is focused on constructions in the Hyde Park project in 2017. We expect the contracts to reach EGP 2bn. The bulk of the project will be completed in 2017, including deferred contracts worth EGP 200m last year, next to new contracts worth EGP 1bn. We are preparing to add new ones over the year that add up to EGP 600m.

Hyde Park signed a contract with Hassan Allam Holding Company worth EGP 500m for 30 buildings of 465 units, which will be established within 21 months. The first phase will be delivered within 12 months. We also aim to sign another contract worth EGP 300m. Moreover, the company awarded some constructions worth EGP 200m to Misr Engineering Development Company (MEDCOM).

We secured the financial value targeted to implement the signed contracts so as to maintain our operation plan.

The Hyde Park project is on an area of 6 million square meters with investments of EGP 35bn in the 5th Settlement. The project is at the gate of the New Administrative Capital, close to the new entrance to Ain Sokhna and the new regional ring road, overlooking the South 90 Street.

What about Park Corner?

The company launched the second phase of the Park Corner project, which includes 1,000 residential units, next to 530 units in the first phase, which were announced in September and completely sold in one month.

We achieved sales of EGP 3bn in the past year and expect similar revenue this year in the Hyde Park project alone, next to sales from the North Coast project. But this is linked to the number of units that will be posed this year, which has not been specified yet.

The company provided seven different payment plans to our clients. We allow them to buy residential units through the mortgage finance initiative, where the Housing and Development Bank owns a subsidiary for mortgage financing that has a cooperation protocol with Hyde Park.

The company developed 40% of the Hyde Park New Cairo project. The remaining part will be constructed through the coming period. We expect to complete the project in 2024.

The remaining part includes a central park on 600,000 square metres, along with a recreational club. We are negotiating with a number of clubs to manage the new club. The same goes for the educational district, which will be managed through a partnership with a specialised company.

What about the company’s plans for the next stage?

We aim to continue developing our projects in Sheikh Zayed and 6th of October City, next to our projects in the Red Sea province. We are looking for suitable lands and prefer partnership projects with other companies or the state.

The company did not participate in the competition for the first offering in the New Administrative Capital due to the short time and our focus on the Hyde Park project. Yet, we intend to compete in the second offering, which will be clearer.

We plan to finish all delivery problems in 2017. We notified our clients with the new dates. We also provided facilitated payment plans to the clients that did not receive their units. The company receives weekly reports on the situation of development to ensure completing the project in time.

The company amended the general scheme of the project through the US Gensler office. The amendments included the redistribution of the central park to extend to the entire project, rather than being centralised. There were also amendments to the educational and services districts.

Do you plan on putting up part of the company’s shares on the Egyptian Exchange?

The company does not plan to sell shares on the EGX, as we have enough liquidity for the current plan, but we are studying the matter. This, however, takes a long time and complicated procedures that may begin in 2018.

I expect increased market activity during the second half of this year, fuelled by the seasonal activity in the summertime and the arrival of Egyptians living abroad, next to the expected economic improvement.

How do Arab developers see the real estate market in Egypt?

Arab developers are confident in the Egyptian real estate market. They have a strong appetite for investment in Egypt. They all agree that the flotation of the pound was a good thing that invited many of them to enter the market, being a step on the right path, despite the negative impacts that shall soon be resolved.

But the scarcity of land plots available in the market and the high prices of available lands pushed many companies to seek partnerships. Yet, the offerings plan and the establishment of new cities can secure inflow of new lands, especially after building the New Administrative Capital.

I believe that the general developer scheme is very important in the provision of land at this time. It has been proven to work well in different countries and we have great expertise in that field.

How do you view new cities on the North Coast?

New Alamein City is a good model for developing the North Coast. This is the first time we benefit from costs in development, instead of building resorts. This would mean more opportunities for the area.

I call upon the government to reconsider the mechanism of mortgage financing to include all units under construction, like many other countries around the world, instead of limiting the funding to existing units, as this may drive the growth of the market’s activity.

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The White Bay is planned to be delivered in 2021: says Mohamed Gamal, PACT’s board of directors’ chairman Thu, 30 Mar 2017 15:00:07 +0000 PACT is a real estate company who is currently present in the real estate market by its project White Bay in North Cost of Egypt. It is also willing to be present with a new investment opportunity, represented in a housing project, during the current year. In this regard, Daily News Egypt met with PACT’s …

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PACT is a real estate company who is currently present in the real estate market by its project White Bay in North Cost of Egypt. It is also willing to be present with a new investment opportunity, represented in a housing project, during the current year.

In this regard, Daily News Egypt met with PACT’s board of directors’ chairman, Mohamed Gamal, to discuss the steps taken in the project, especially under the changes that economy n Egypt faced lately.

Can you tell us a brief about White Bay? 

The project is located on 80 feddans in the North Coast. It is being established on four phases during seen years, with a percentage of constructivism less than 15%. 770 units to be built, and it the project is planned to be handed in 2021.

Can you tell us about the amount of investments in White Bay?

PACT for real estate investments is willing to pump investments in its main project during this year, White Bay, in the North Cost. These investments are amounted to EGP 220 million.

The total amount of the projects’ investments since it started reached EGP 330 million.

What about your proximate plans?

We are planning to deliver the project’s first stage during 2018, thus the company is now working on finishing this stage, as well as the landscape, during this year.

We are also working on the concrete work of the first stage to be finished by next June.

What are the challenges that are facing you?

Mainly the increase if the investment cost due to the un-peg of the exchange rate. The investment cost reached EGP 2 billion; this means that there are EGP 400 million more than what we planned when we launched the project.

How did the company deal with the economic instability?

The company extended the payment order’s period; this was after the changes that the market witnessed. It was a way to deal with these changes of prices in the market.

We are also making an agreement with one of the banks to launch the mechanism in favour of the company’s progress, to offer more facilities to our clients.

I believe that the real estate companies will tend strongly to extend the payment order’s period, till the extent of periods orders that would reach 10 or even 12 year, especially those with strong financial solvency that can bear this large period.

The solution of extending the payment period will require decreasing the money’s amount during the installment period.

How about promoting your product? 

We already marketed for 250 units from the total units of the project, till the moment. The company aims at marketing 25% from its total units abroad, whether for Egyptians abroad or foreign clients. We strongly believe in the importance of exporting real estate aboard, to energize the local market and the real estate market in Egypt.

Did you take any actions after the decision of flotation?

We raised the units’ prices by 15% since the flotation’s decision, till the moment. After un-pegging the exchange rate, and its impact on the cost of implementing the project, it was normal.

I also expect other increases during the season of the summer, so that the total increase would reach 30% in the project during the current.

Under the umbrella of the instability of the exchange rate, I could see that the increase even could reach 40% throughout the current year.

So how about the sales in the summer’s period?

I expect it will be strong and active, and won’t be affected by the late prices’ increase, as the purchasing power is still the same, especially in the tourism projects.

How do you see the importnace of the quick finance?

The incomplete funding real estate system, in a way that serves all the residential slides, including from low-income people and the luxurious housing, is an obstacle against the expansion in the real estate market.

Offering quick finance to the investor enables him to implement quickly his project, and to start new ones.

How does the company seek compensation as the price at the phase of contracting differed from the price that represents the current and actual cost?  

The company always reviews the cost’s study to evaluate the level of risks in the project. In the parallel market the company put the project’s plan in US dollar, what helped it to make marketing plan and fixing prices that are suitable to the period of un-pegging exchange rate.

In addition to White Bay, are there any other plans?

White Bay is our most important project which supports our existence in the real estate market. We are keen on delivering what promised on time. In addition, to present various products in the market, we target a new investment opportunity, through implementing a housing project.

How do you see foreign investors could be attracted to invest in the local market?

There has to be incentives for foreign investors in the local market, in a way that does not contradict with the state’s rights or the law. This is a way to achieve development. Also it will be a mean of providing the state of the dollar’s flow needed in the upcoming period.

It is very important to solve the problem of investors, but we should not depend on that to attract them.

I would like to add that the foreign investor should be offered legal guarantees and stable law/regulations in order to implement his projects in the local market.

What do you think about the actual crisis for the real estate companies who bought land from the Tourism Development Authorities?

 These companies have to pay the installments of these lands according to the dollars’ value at the time of installments. According to the law these companies should pay the value of the exchange rate at the time of payment. I believe that a fast resolution for this crisis should take place.

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Private sector can help government attract foreign investments: Ahmed Shalaby Thu, 30 Mar 2017 14:30:12 +0000 Established in 2014, Tatweer Misr is an Egyptian shareholding real estate company that capitalises on the wealth of industrial and real estate experience brought to the table by its shareholders.

The post Private sector can help government attract foreign investments: Ahmed Shalaby appeared first on Daily News Egypt.

How would you describe 2017 in the real estate world?

2017 is a challenging year for this sector and changes are occurring frequently.

The business model for real estate in Egypt is different from any other country where developers invest in their project, build, and then start to sell. In Egypt developers put the initial investment, and then sell off plan. The cash generated is then used in the projects. In order for our model to continue, the investment cycle has to go on.

So the problem with the Egyptian model today is that when the flotation took place, along with the introduction of the value-added tax, and also in the presence of all the changes in the market, this led to an increase in the cost of construction.

Therefore, the developers are facing a challenge with regards not only to the units sold before the flotation, but also the units to be built at present due to the increased cost of building materials.

How are you getting out of this vortex?

To resolve this, an in-depth study was needed. So we reviewed the costs, and we saw that the cost of construction has increased between 40% and 50%. An increase in the selling prices was unavoidable. But we also had to come up with an innovative strategy to avoid a drop in sales.

This strategy included three main tactics. The first was to speed up the construction at building sites. We even did better than last year as we believed that working efficiently at the sites is the most important factor to stand our ground and secure our clients.

The second tactic was to come up with a new mode of payment by offering longer instalment periods for clients, as the prices increased. However, the clients’ disposable income has decreased. So the idea was to prolong the payment period so as to be within the purchasing capabilities of clients.

I think we were the first company to initiate the concept of 10/10, in our project “IL Monte Galala”, which allowed our clients to pay 10% in advance and equal instalments over a period of ten years.

The third tactic was marketing and selling our units abroad. I think this would be of great benefit for Egyptian companies as this approach will not only benefit the real estate market but also the Egyptian economy as a whole.

In which way would promoting real estate outside of Egypt benefit Egyptian companies and the country itself?

I am saying this because I recall that Dubai last year sold real estate units worth $20bn abroad. We hope to reach this sometime in the future, because we believe real estate in Egypt could be a very important source for direct foreign investment.  If we can sell real estate properties to foreigners, whether in the Arab world or abroad, we can generate what Dubai has achieved, which can be a great source of foreign currency.

This is why we at Tatweer Misr are concentrating on this third point of our strategy, and we are in talks with other Egyptian companies to actively promote our projects abroad in the coming period.

For example, a cost of EGP 1m for a unit before the flotation was equal to $120,000, even if we raised the price of this unit by 50%, or even 60%, after the flotation it would still be around only $100,000, so for the customers living outside Egypt, the price has effectively decreased.

I also believe that we, as the private sector, can help the government to attract foreign investments through partnering with foreign investors in the real estate development sector.

Can you tell us more about “IL Monte Galala”?

Originally, according to our feasibility study, we expected that the size of investment for the project would reach EGP 8bn—but after adjustment for inflation, we expect it to reach EGP 12bn due to the construction material costs that increased on average 40-50%.

As for a construction update, in phase one we have already assigned the construction of 700 units to contractors at a total value of EGP 500m, and this year we will assign another 800 units at an estimated value of EGP 800m.

We are also working on the construction of the first man-made lagoons in Sokhna Mountains, which consist of six lagoons spanning a total area of 40,000sqm in “IL Monte Galala” at an estimated cost of EGP 100m. The first lagoon will be finished by the end of 2017, one year before the beginning of the first phase units’ delivery in 2019.

Currently, we are also working on finishing six mock-up units of different types of the project’s units which will be fully finished and furnished by September 2017. Our customers and potential customers can visit the location to see the type of unit they are interested in buying.

We will be investing around EGP 1.5bn in construction during 2017, which is more than what had been projected for last year.

What about your other project “Fouka Bay”?

Construction at Fouka Bay is progressing ahead of schedule; we have already started working on 25 units and are currently tendering for 130 units with a total cost of EGP 200m. We are expected to tender another 350 units with a total cost of around EGP 500m before the end of 2017.

As for the lagoons, we are expecting to start working on them during 2017 and their investment cost is expected to reach EGP 200m, while the total investment in the project has increased from EGP 2bn to EGP 3bn after the flotation.

So we can assume that the amount of work undertaken in 2017 is way more than that of 2016?

In 2016 there were a lot of preparations on site. Also keep in mind that grading and earth moving work consumes time, especially in IL Monte Galala as we are working on the mountain. In 2017 we are working with full capacity and for 2018 we are expecting to hopefully double our efforts.

We have increased our paid-in capital to EGP 175m, instead of EGP 150m.

Our sales are going positively and we have agreed with all shareholders to allocate all income generated from sales to construction works, which is helping a lot in increasing the pace of construction.

And what are your plans for the next period?

We are studying the different options for a first home project and we are open to partnerships with different stakeholders, whether Egyptian or foreign investors. We have a very strong technical team which is now capable of managing any project regardless of its size.

So what are the steps taken to partner with investors from the region?

Any foreign investor wants foremost to be sure where his money is going and what would be the return on his investment, so we are working on preparing different files to suit all kinds of investors and we will be presenting them to potential investors in the region.

Will banks be involved in financing your new hotels?

Financing through bank loans is one of the options we are studying for our hotels.  In general, banks are inclined to finance hotels, especially when it is an international one with a global management.

Last year, we signed an agreement with Six Senses Hotels Resorts Spas to manage a hotel that will be built at IL Monte Galala resort in Ain Sokhna with an investment cost of EGP 1bn. The hotel will include 90 suites and 60 serviced apartments for sale. Our plans also include another hotel with around 90 suites and for the second one we expect to offer around 300 serviced apartments for sale.

Can you give a brief us about your sales?

With regards to “IL Monte Galala”, we have sold around 1,500 units until today, as well as around 425 units in Fouka Bay.

We can say that we are close to a total of 2,000 units in both projects.

I would like to add that in March we have a private exhibition, in Dubai and Abu Dhabi, to start marketing our projects abroad, and in May we are participating in another one that will include many Egyptian real estate companies.

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NUCA preparing land offerings for investors and partnership projects Thu, 30 Mar 2017 14:00:31 +0000 The New Urban Communities Authority (NUCA) has received an offer from Egyptian and Arab alliances to develop partnership projects. The authority has requested companies to make offers to compete on the projects of the second phase. The planning and projects sector has completed the preparation of lands for investment and service activities, in addition to …

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The New Urban Communities Authority (NUCA) has received an offer from Egyptian and Arab alliances to develop partnership projects. The authority has requested companies to make offers to compete on the projects of the second phase.

The planning and projects sector has completed the preparation of lands for investment and service activities, in addition to individuals’ lands.

Deciding the price of the square metre is underway in preparation for announcing the offering date.

Waleed Abbas, Assistant Minister of Housing for NUCA affairs, said that the authority will offer 15 lands in the second phase of the partnership projects with the private sector in New Cairo, Sheikh Zayed, 6th of October City, New Damietta, and New Aswan.

Abbas told Daily News Egypt that the total area of the lands is nearly 4,524 acres. Specifying the estimated value of NUCA’s share is being decided in preparation for announcing the offering and receiving offers from companies.

NUCA received 60 offers from Egyptian and Arab companies to develop partnership projects. The authority requested from companies to re-submit their offers at the official announcement of the offering.

The new offering includes a land of 2,000 acres in October Oasis, and another of 65 acres in 6th of October City. It also includes five lands in Sheikh Zayed of 410 acres, 190 acres, 73 acres, 19 acres, 74 acres to establish urban, commercial, administrative, hospitality, and tourism activities respectively, in addition to one land of 22 acres in New Aswan, and a land in New Damietta with a space of 67 acres.

The new offering also includes six lands in New Cairo, distributed on lands of areas of 250 and 204 acres next to Madinaty, in addition to three lands with areas of 500, 400, and 150 acres next to the middle Ring Road, as well as a land of 100 acres in south El-Teseen Street in Fifth Settlement.

The authority has introduced amendments to the conditions of the new offering, including experience required from companies that seek to develop projects in partnership with the NUCA. The condition included a past experience in developing lands of areas ranging between 100-500 acres, with the priority given to companies that make partial cash dollar payments.

The authority decided to give priority to Egyptian investors who are allied with foreign investors and will pay the land’s value in dollars transferred from abroad. The NUCA requested from companies to look for foreign—especially Gulf—investors in order to form coalitions and compete on projects.

Among the companies that made partnership offers are Dar Al-Maaly for Real Estate Development and Investment, Salman Abdullah’s Aqary, and Fawaz Al Hokair’s Egyptian Centers for Real Estate Development Company. Additionally, there were partnership offers with Tatweer Misr, Orascom Development and Management, Al Ofouk Real Estate Investment, Misr Italia Group, 6th October Development and Investment, SODIC, and Hussein Anwar Atallah’s Dubai Real Estate Development.

Other companies include the International Center for Real Estate Development, El Shams for Housing and Building, Mabani Real Estate Invesmtent, Nasr City Housing Company, Hassan Allam Real Estata, and Badr El-Din Real Estate Investment.

The second phase of partnership projects

Abbas expected the second phase of the partnership projects to witness demand from Arab and Egyptian companies after the success of the first phase and signing four contracts for projects on an area of 1,927 acres in Madinaty, New Cairo, and 6th of October City with total investments of EGP 131bn.

“NUCA depends on partnerships to provide sustainable income over the years of development for real estate projects past the selling phase. The partnership mechanism includes providing revenues for the NUCA throughout the implementation period of the projects and after its conclusion, as selling housing units can be delayed to take advantage of increasing prices.

Abbas said that the planning and projects sector has concluded the documents of the ministerial decision for the partnership project with Palm Hills. Detailed sketches were sent to the consultants of the project to be approved before the decision is issued.

He added that the revenues of the project of an area of 500 acres in New Cairo are expected to be EGP 35bn. NUCA will obtain 42% of the project’s revenues, including EGP 10bn financial share paid over 14 years in addition to an in-kind share of the total built-up area of the project of 150,000sqm, including residential units of 132,200sqm and commercial units of 17,800sqm.

He explained that the sector is reviewing the ministerial decision for the second phase of iCity, which NUCA develops in partnership with Mountain View.

He pointed out that the company has obtained the ministerial decision of the first phase of iCity in New Cairo. Total investments of the project are estimated at $3.6bn.

NUCA has signed a partnership contract with Mountain View and Saudi Sisban Holding Company to develop iCity on an area of 500 acres, with total revenues of EGP 35bn. NUCA’s share is 40%, equivalent to EGP 14bn.

The planning and projects sector is also reviewing another project in partnership with Mountain View-Sisban in 6th of October City, on an area of 370 acres. Total revenues of the project are estimated at EGP 26bn, with NUCA’s share being 30% worth EGP 7.5bn, representing EGP 4.8bn in cash while the rest is in-kind shares representing 11.8% of the constructed areas.

Offering a new phase of Beit Al-Watan

Abbas said that the NUCA will offer a new phase of Beit Al-Watan for Egyptians abroad, including 6,429 residential lands in nine new cities, and 25 service lands in four cities.

“The NUCA is reviewing the pricing in Egyptian pounds and its equivalent in dollars according to the exchange rate at the time,” Abbas said.

The recent offering of Beit Al-Watan lands included 3,000 lands with sales of $900m, including 2,000 lands in New Cairo and others in 6th of October City, Badr City, New Damietta, New Aswan, New Assiut, and New Qena.

The price of the metre in New Cairo reached $550, in New Damietta $400, in Badr $225, and in 6th of October City $450, while it reached $125 in New Assiut, New Qena, and New Aswan. Additionally, 10% are being added for special areas and parks, and a further 15% for the units facing the Nile or the sea.

The offering conditions included paying an advance of 25% of the land’s value and instalments over five years. In the case of instant payment, 15% are deducted from the remaining amount after paying the advance.

New Cairo expansions

NUCA is preparing detailed plans for the expansions in New Cairo, 6th of October City, and Sheikh Zayed in preparation for offering lands for individuals and investors, as well as medium housing projects.

Abbas explained that 71,000 acres were added to 6th of October City, 15,000 to New Cairo, and 9,300 acres to Sheikh Zayed.

The NUCA has issued a ministerial decision with the approval to plan and distribute 50 investment projects with an area of 4,450 acres. The projects serve 15 new cities and include integrated residential projects, tourist villages, and cooperative housing.

The projects include Al Bourouj, owned by Capital Group Properties, on an area of 1,042 acres in Al Shorouk City and in iCity on an area of 500 acres in New Cairo.

The projects aim to attract foreign investments, especially from the Gulf. They include Emirati and Saudi investments, and will provide at least 250,000 direct and indirect jobs.

The planning sector at the NUCA has completed planning for 58,000 acres during the last quarter of 2016, distributed over 6th of October City, New Cairo, New Assiut, New Beni Suef, Obour, New Souhag, 15 May City, and New Qena.

He said that more areas are planned, especially those attached to cities with high development rates, through a specialised team.

Some cities, however, are completely developed, so there are plans to utilise unused areas or add more areas.

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Al Ahly considers developing 100 acres in Mostakbal City in partnership with Layan Thu, 30 Mar 2017 13:39:38 +0000 Completing the fourth phase of Amwaj next year, developing two entertainment and commercial projects

The post Al Ahly considers developing 100 acres in Mostakbal City in partnership with Layan appeared first on Daily News Egypt.

What are the company’s most important projects?

Al Ahly Real Estate Development is currently considering a project in partnership with Layan within the Mostakbal City project. The project will be launched this year, in addition to the selling of the third phase of Square 2. The company has also received an offer to construct a sports club in Al Mansoura.

The project includes developing 100 acres in partnership with Kuwaiti Layan.

Last year, Al Ahly contracted with Layan to develop 150 acres owned by the Kuwaiti company in New Cairo. Al Ahly will re-plan the areas and implement the units in the projects to sell them.

The alliance with Layan is considered one amongst three other alliances. Al Ahly has also contracted with Dar Al Maaly to implement two projects, as well as with a Yemeni company to develop a large area in the Red Sea governorate.

The partnership with Layan is the second one to be considered by Al Ahly in Mostakbal City, where 400 acres—distributed on four lands—are developed in partnership with Dar Al Maaly. The company is marketing the first and second phases and is waiting for licenses to launch the third phase.

The company has cooperated with Dar Al Maaly in the Square 1 project in New Cairo, where 99% of it was implemented and a large percentage was handed to customers.

Dar Al Maaly has provided Al Ahly with EGP 1.5bn to develop new projects in the Egyptian market.

Dar Al Maaly is considering establishing a medical area in Egypt to include a number of hospitals, targeting Arab visitors who pay lots of money to receive treatment in European countries while Egyptian doctors have the same efficiency. Al Ahly, however, will play an advisory role only.

The third partnership is with a Yemeni investor. It aims to develop an area of 1,000 acres in Sharm El-Sheikh. Al Ahly signed a partnership contract before the 25 January Revolution and finished the designs; however, the delay in tourism over the following years led the company to work on the project with slow and limited rates, on both the executive and sales levels.

The company is currently issuing permits for the project in the North Coast. What are the features of this project?

The company has issued licensing for 300 acres in the North Coast to develop them in partnership with a local investor. It is expected to start implementation and sales this year. The project will be completed within two to three years.

Al Ahly concluded a partnership contract with an investor who owns the 300 acres. Al Ahly develops and markets the project for a share of revenues.

Al Ahly has signed a cooperation protocol with the Saudi Ministry of Housing a year ago. What are the details of this cooperation?

There is a cooperation protocol, which is currently under study that aims to implement projects for the middle class in Saudi Arabia.

Al Ahly signed another cooperation protocol with the Saudi ministry of housing a year ago, besides three other Egyptian companies. Al Ahly aimed to enter the Saudi market to develop real estate projects. The Saudi Ministry of Housing aims to facilitate the company’s work in Saudi Arabia as well as provide the necessary lands.

The protocol contains many risks, including working in a new country according to unfamiliar laws. Moreover, the Saudi government is supposed to support the units for the middle class, without specifying who they are exactly.

Does the company have any other projects currently?

The company has received offers to develop sports and social clubs, including one in Damietta. It plans to develop other clubs like “Platinum,” which was implemented in New Cairo and was opened last year.

This partnership will give Al Ahly full management of the club, thanks to its experience.

Why has the company not taken part in the first offering of the administrative capital?

For two reasons, the first is the strong competition by the state, as it implemented many units in the project for low costs because it started implementation before the pound flotation.

The second reason is that there are no customers in the area to sell the units to; hence, there is a difficulty in selling units, because ministries have not moved to the capital yet. The offered lands are 10km away from government bodies.

15 companies out of a total of 230 companies have competed over the lands. This means their points of view are similar to Al Ahly, and this will allow them to compete on the upcoming offers.

What about Amwaj’s project? When will the company complete it?

The company will complete the third phase of Amwaj on an area of 81 acres on the North Coast by May. The licensing for the project was obtained a year ago after six years of delay.

With the implementation of the third phase, this leaves only the fourth phase on an area of 80 acres. It is expected to be finished in summer 2018.

The hotels of the project will be assigned to local companies, where global companies in the North Coast have not achieved much success, according to the past experiences.

The project includes two areas, one commercial and the other a hotel. The company has already started the implementation of the commercial part of the project last year, and it is expected to be finished this year.

The North Coast still needs entertainment and commercial projects, which the company is seeking to achieve through the activities implemented by Amwaj.

Why has the company not applied to obtain lands in partnership with the Housing Ministry?

This is due to our fears from different trends adopted by the government or a change in the thinking of officials regarding the partnership system with the private sector.

Is there still a real crisis in land provision?

The crisis will not end as long as the state reserves the right to sell without giving large companies the opportunity to work as developers and provide alternatives for selling lands. The prices, according to which the areas were offered in the ministry’s last bid, reached EGP 4,500 per metre. They were not reasonable and hurt the market, especially with the increase of costs and utilities by 48% since flotation. This greatly affects large companies due to the decline of the purchasing power. Many buildings will be out of the reach of Egyptians financially.

The state has wasted about 100 square kilometres in the North Coast through the allocation of lands to a group of syndicates and cooperative organisations that obtained the lands and developed them with low financial efficiency that resulted in low-quality projects. They did not include lands that are able to attract tourism.

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From flotation to energy price hikes: how construction materials companies are affected Thu, 30 Mar 2017 13:32:43 +0000 The Egyptian state is seeking to reduce fiscal expenditures through fuel subsidy restructuring

The post From flotation to energy price hikes: how construction materials companies are affected appeared first on Daily News Egypt.

With the fluctuations of the economy in Egypt, the continuously-changing rate of the US dollar, and a general state of instability, it is important to ask several questions at this point. Where do industrial sectors stand? How has the Egyptian pound’s flotation affected the construction sector and the costs of importing materials? A more specific question would be “What kind of impact did the hikes of energy prices that took place in August 2016 and November 2016 leave on the sector of construction and the prices of building materials?”

Arqaam Capital has tried to predict the answers to these important questions. According to a report recently issued, Arqaam ran sensitivity tests to assess the impact of further fuel price hikes, 35-40%, on industrials coverage space. “We expect a second round of energy price hikes in the second quarter (Q2) and the third quarter (Q3) of 2017,” said Arqaam’s report.

2Energy price hikes throughout the past months

Over the past months, the Egyptian state has increased the electricity prices for the residential, commercial, and industrial sectors, with a difference in the increase for each industrial sector depending on the type of the industry as well as the intensity of energy consumption in it. This first round of increases took place in August 2016. Subsequently, the second round of fuel prices occurred with the flotation of the Egyptian pound on 3 November 2016, when the government increased the prices of diesel and gasoline by 7-47%, which was a major increase, of course, and perhaps a striking hit to several companies in several sectors that depend on these fuels.

Further price increases in the future are not off the table. An average 35-40% increase in energy costs is excepted as the government attempts to reduce the amount of subsidies of the fiscal year (FY) 2016/2017.

The increases in energy prices to be undertaken by the government are expected to mainly affect cement producers. The rise in electricity costs will directly affect them as electricity represents 9% of the direct expenses for cement companies.

Cement companies affected, industrial companies on a safer side

Industries that use fuel intensively are actually expected to face an increase in electricity cost within the range of 35-40%, implying 48% average downside to earnings per share (EPS) for cement stocks under coverage. Additionally, a 35-40% increase is expected on diesel and gasoline costs, which will primarily affect Tourah Cement as the firm still operates its kilns on heavy fuel. However, conversion to coal is planned by 2018.

The increase in the costs of energy should have a rather neutral impact on EPS at both El Sewedy Electric and Ezz Steel, as both businesses retain strong pricing power, allowing a full pass-through of increases in direct costs, primarily in the imports of raw copper and iron following the flotation of the Egyptian pound and the removal of electricity subsidy.

3El Sewedy is considered Arqaam’s top industrial pick with 48% and 15% upside risks to FY 2017/2018 earnings estimates and target prices respectively.

As for Orascom Construction, its relative value remains compelling in FY 2017/2018 as it trades at 54% vs. MENA contractors, with an unwarranted discount given the group’s gross margins that are substantially superior. Backlog is highly diversified by geography, where for Egypt it is 63%; for the United States of America, it is 28%; and for other geographical regions, it is 9%. Classified by sector, the backlog is 75% in infrastructure, 14% in the commercial sector, and 11% in the industrial sector.

Ezz Steel has benefited greatly from the devaluation of the Egyptian pound over the past period because of its pricing that is based on the US dollar. This allows for expansions in the gross margins of FY 2017/2018 by 300bps or more. This also implies 70% and 20% upside risks for the EPS and target price respectively in FY 2016/2017. The group has re-priced 100% of end product value for any sudden move in the foreign exchange market (FX), while only bearing the impact of cost growth on 75% of the cost of goods sold (COGS).

4Misr Cement Qena (MCQE) is among the top cement picks of Arqaam Capital in Egypt. The reasons for this include the company’s superior cost efficiency and its location near quarries and demand, its 100% or more utilisation rate, and its high quality of limestone. This all has resulted in gross profit margins for the company of 23% in FY 2017/2018, against only 9% for the whole sector. Some other reasons why MCQE is the top pick include the comparatively attractive returns. They are estimated at 18%, compared to 12% for the sector. The last reason includes the stock’s unwarranted 67% discount to peers in FY 2017/2018.

Meanwhile, the Arabian Cement Company Egypt (ARCC) remains better positioned compared to the majority of its peers. The company actually continues to enjoy a 30% or more cash cost advantage compared to its peers that run on natural gas. The cost is estimated at $8 per one million British thermal units (MMBTU), which is paid for in Egyptian pounds, converted at the prevailing exchange rate. The strengthening in cement prices suggests 33% in upside risk to the current gross profit estimates of FY 2017/2018. Increased exports, the source of FX income, should allow for more favourable payment terms on coal imports.

For Sinai Cement, the second round of the industrial subsidy cuts might leave an impact of FY 2016/2017 margins, especially with the growth in coal import costs as a result of the weakening value of the Egyptian pound against the US dollar. There has also been a rise in transportation costs. They play a large role in determining margins. Sinai Cement transports sales from its single plant in North Sinai to the areas of Greater Cairo, Suez, and Alexandria where demand is mainly concentrated.

Lastly, Tourah Portland’s margins are expected to remain subdued in FY 2017/2018 as it is quite unlikely to see the business running on coal before the end of 2018. This, of course, makes earnings extremely vulnerable and sensitive to the rising prices of mazot.


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Invest In uses the latest technologies to revolutionise real estate sales Thu, 30 Mar 2017 11:30:30 +0000 What makes us different is that we take no commissions, we are only distributors, says Osama

The post Invest In uses the latest technologies to revolutionise real estate sales appeared first on Daily News Egypt.

Invest In for Real Estate is a company that has been in the market for a year and a half. It is a distributor for 15 of the biggest real estate development companies in Egypt and five of the biggest companies in Dubai—with clients such as Orascom, Sodic, Palm Hills, Tatweer Misr, La Vista, Pyramid Hills, and Soma Bay.

“What makes us different is that we are simply distributors,” said Mohamed Osama, managing director at Invest In.

“We don’t do resale; people don’t come to us to sell their homes. We either do studies for companies, sell new real estate, or relocate companies,” he added.

Invest In educates their clients before they make their investment decisions.

“We have three projects in Ain Sokhna; one offers Ganzoury parties, one doesn’t allow veiled women to enter the compound, and one is moderate,” explained Osama.

“However,” he added, “people decide to invest in a place by just hearing that it’s the best without learning further about the community and whether or not it’s the most suitable for them.”

What Invest In does is teach their employees to listen and understand carefully what the client is looking for, and consult them on what is best and suitable for them, with no interest in selling them one project over another.

“Our priority is the client’s comfort and helping them find what they’re looking for,” said Osama.

New technologies for marketing

Employees at Invest In are not called salespeople; they are called client-partners, because they are the client’s partners in making a decision.

Invest In is using two new technologies to help them sell in a new, different way.

Osama said, “People used to use brochures to show clients projects. Now we have two new technologies: real time and virtual reality.”

According to Osama, real time is a technology that enables the client to see the house in a somewhat updated version of 3D, allowing the viewer to go inside the house, open doors, go outside to the balconies to see the views, etc.. It takes the client there without physically going there.

Virtual reality, on the other hand, is the latest technology, where the client puts on glasses and earphones, where he can see or hear nothing in the world they’re in and enter a different world—as if he entered the actual project they’re looking at.

In technical terms, it is a 3D, computer-generated environment that can be explored and interacted with by a person, allowing them to become part of the virtual world and enabling them to move objects and take actions.

The client would start to hear sounds of the waves and birds singing, if, for example, it’s for a project on the North Coast or Red Sea.

They can take a walk or get on a train or a helicopter to tour the project—as if it’s a movie.

Virtual reality leaves the client with the feeling of having visited the place in real life.

“I think that these technologies will not be optional in the near future; those who don’t use it, will be a lot behind,” said Osama.

“We currently use these technologies for our client companies, since we don’t yet have our own projects,” he added.

Challenges of the devaluation pounds

With the sudden changes of the devaluation of the pound, Invest In faced challenges with clients who were confused at the sudden rise in prices.

“Frankly, the impact was on the end-user (consumer/buyer), not on us as a company,” said Osama.

He explained that houses that were worth EGP 5m now cost EGP 8m.

The only readjustment for the company was recalculating prices and increasing them, yet the only one affected is the end-user or investor who ends up buying for more.

However, Osama said, “in comparison to neighbouring countries, our prices are still very reasonable. Despite the flotation of the pound and the increase in prices—that have witnessed a 30 to 40 percent rise in the past 6 or 7 months and will still witness another 30 to 40 percent rise in prices in the upcoming 6 to 7 months—we are still a long way from saying Egypt is an expensive country compared to Arab countries and neighbouring ones.”

According to Osama, business is still going well for brokerage companies, because those who used to buy the biggest houses, only started buying smaller houses so the biggest ones are left—yet sales are still running smoothly and have not stopped.

“In fact, in the past few months, people started investing even more, perhaps to invest in their economy and put their money into the safest investment. We thought that with the devaluation of the pound we will sell less, but it turned out that we sold even more than the six months before that,” added Osama.

Osama said that since there has been a rather sated market for luxurious, big houses, smart developers consider altering their targeted customer base to those who want luxurious houses but in smaller spaces.

“I assume that we’ll be witnessing developers maintaining their quality and value but decreasing house sizes to 60-70 metres that are worth about EGP 1 million,” he explained.

He added, “We’ve in fact noticed developers maintaining their luxurious quality of work, yet in smaller projects and houses. I’ve heard about studios in many projects, and one-bedroom apartments, etc.. Even town houses have decreased in space and size, yet maintained their luxurious quality and design.”

Invest In Dubai

Invest In is now also an office for Orascom; their clients can go to Invest In’s office to sign checks and finish their paperwork.

Orascom works in more than nine countries outside of Egypt and shares a goal with Invest In, which is spreading around the globe, so Orascom is an important client for Invest In.

Invest In started in Egypt and is expanding outside of Egypt. “Egypt is the point where we begin. What we’ll add to Egypt is that we aim to expand in order to sell Egyptian real estate abroad. For example, we’re going to Dubai to sell to Egyptians there, and to Saudi Arabia, Kuwait, and Spain—not just to Arabs. We will also work with developers there, but the main goal is Egypt,” explained Osama.

Invest In is now focused on opening a branch in Dubai—Invest In Dubai.

Osama clarified, “Our target is for Invest In to be available in different places around the globe. Egypt is only the start, but hopefully every year we’ll branch out to a new country.”

Invest In is currently focusing on projects in Hurghada. “With Egyptians’ new perspective,” said Osama, “we find Hurghada to be the new hot spot.”

“Our goal for 2017 is to reach 1 billion pounds in sales,” said Osama.

“For a company that works in various things like us, we always depend on A class clients, because these are the ones that are willing to spend even $200,000-300,000 on their investments or houses,” he added.

Invest In is signing new projects with developers that will demonstrate their whole projects using real time; however, the developer is anonymous due to the confidentiality of the project until now.


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The best thing to do is to save your money at a fixed rate by investing in real estate: El-Shinnawy Thu, 30 Mar 2017 10:30:30 +0000 We are committed to deliver high-end projects and a quality of that serves all family members: El-Shinnawy

The post The best thing to do is to save your money at a fixed rate by investing in real estate: El-Shinnawy appeared first on Daily News Egypt.

With the chaotic rate of the dollar and the drastic increase in prices, people would think that real estate sales would suffer losses; however, the figures show opposite results.

According to the sales director at Hassan Allam Properties, Sherif El-Shinnawy, sales have increased after the flotation of the pound.

Although the uncertainty after the devaluation of the pound took over the sector, and confused people about where the pound was going, Hassan Allam Properties’ sales have been working very well in comparison to Q4 of last year, despite them not launching any new projects in the past three months.

However, Hassan Allam Properties’ case differs from most—if not all—real estate developers in Egypt, because they have an important strength, which is that they are the sister company of Hassan Allam Construction.

The flotation of the pound had a negative impact on the real estate sector when the prices of the materials increased, leading the majority of developers to increase prices by 20 to 35 percent.

El-Shinnawy said that Hassan Allam raised their prices competitively and efficiently compared to other developers, because they do not outsource their construction due to working with their sister construction company.

“In my opinion, sales have increased in number after the flotation of the pound, especially in projects like Swan Lake El-Gouna,” said El-Shinnawy.

He explained that El-Gouna, or the Red Sea area in general, which is the place of one of their most successful recent projects, is related to the dollar because it is priced in dollars, making it a really good real estate investment in Egypt.

“I think the whole real estate sector was working well after the devaluation—especially the primary market—because real estate in Egypt is like a safe haven. Many anticipated that real estate would suffer tremendously after the 2011 uprising, but quite the opposite happened, and most developers’ sales soared dramatically in 2011-2012,” he said.

“Bottom line is it is the most secure form of investment for the majority of Egyptians,” he added.

Hassan Allam Properties achieved 173% in Q4

In Q4 2016 Hassan Allam Properties achieved 173% of sales compared to Q4 of the previous year. “I believe this is a direct effect of the flotation,” said El-Shinnawy.

Hassan Allam Construction works for some of the biggest real estate developers in Egypt, like Palm Hills, Emaar and SODIC, not to mention projects for the government and the army; “you name it,” said El-Shinnawy.

“You’d be surprised at the scope and variety of the projects we build if you check out the Hassan Allam Construction projects on our website,” added El-Shinnawy.

Hassan Allam Construction is one of the biggest and oldest construction companies in Egypt and is a private-sector company.

“Having Hassan Allam Construction as our sister company,” said El-Shinnawy, “not only allows us to deliver on time or even ahead of schedule, but also gives us a huge edge in regards to construction cost efficiency.”

Developers primarily consider projects based on return on investment (ROI) first; and high-end projects offering luxurious products provide a much better return on investment for both developers and clients.

El-Shinnawy said that “this sector is performing well and there is a huge surplus in demand over supply, especially in the high-end segment,” he said.

Some developers launched projects in the past two months, and they outperformed expectations despite the 20-30% increase in prices and despite January and February traditionally being the slowest months in the industry.

It is not certain where the pound and the dollar are heading, therefore the best thing to do is to lock your money with a fixed rate by investing in real estate and paying via instalments with a flexible payment plan over six and seven years, according to El-Shinnawy.

Compounds’ prices escalate around 25% annually 

Hence, many people now think that the best investment is in real estate in order to keep their money’s value, and to quit the habit of keeping up with currency’s chaotic updates.

El-Shinnawy explained that the investment decision is as following: “you are not just investing in real estate, you are investing in a credible and well-established real estate developer, and at the same time, the neighbourhood and community are essential.”

He added that some compounds look great, but have a substandard location and community, which adversely affects demand—specifically in A-class projects.

However, El-Shinnawy explained, “Conversely, other compounds, no matter how small, have an exceptional community and a great neighbourhood resulting in steady demand.”

Those compounds’ prices escalate around 25% annually.

“These are the keys: a credible developer, and a good neighbourhood and community,” said El-Shinnawy.

Hassan Allam currently has six up and running projects with quality of landscape: Swan Lake Kattameya, Seasons Residence New Cairo, Park View New Cairo, Little Venice Ain Sokhna, Azzura Sahl Hashish, and Swan Lake October.

Regarding these projects, El-Shinnawy said that the people’s satisfaction with the quality and community is the prominent factor.

The two projects that are under construction but are selling right now are Swan Lake North Coast and Swan Lake El-Gouna, which were both launched in the last 18 months.

Hassan Allam Properties is currently planning and designing the master plan of a new project that will be in 6th of October City, and by next year there will be new projects in the North Coast, New Cairo, and 6th of October City.

Finish Swan Lake North Coast and Swan Lake El-Gouna in 2017

The 2017 goal for the company is to sell and finish Swan Lake North Coast and Swan Lake El-Gouna, as well as to achieve more than 50% sales of the new 6th of October City project. El-Shinnawy added that the aim is to “not just sell out, but maintain the right calibre of clientele,” said Shinnawy.

Hassan Allam Properties targets the upper A-class of the society.

El-Shinnawy clarified that part of their mission is to remain Egypt’s foremost boutique developer that cares about quality, not just quantity. Their slogan is “Family comes first.”

A-class developers in Egypt offered a lot in the sector. They offered luxurious products, quality, and community, which are essential and contributed a lot to the sector.

Hassan Allam Properties’ priority is community, and according to El-Shinnawy, it is the key factor of Hassan Allam Properties’ success.

“We are committed to delivering high-end projects, focused on creating highly selective communities, and a quality of projects that serve all family members,” said El-Shinnawy.

Hassan Allam Holding is one of Egypt’s largest and best-known construction and property groups, serving customers at home and throughout the region. They operate through two distinct and wholly owned subsidiaries—Hassan Allam Construction and Hassan Allam Properties—with a successful network of subsidiaries in strategic regional markets such as the Kingdom of Saudi Arabia and Algeria.

The company employs over 11,000 people that operate through Hassan Allam Construction and Hassan Allam Properties.

Hassan Allam Properties was among the very first privately owned construction companies to ever be established in Egypt and is widely recognised as an early pioneer of the modern construction sector. Today, the group continues to rank among the very top construction and property businesses in the Egyptian market, with heavily expanding activities throughout the Middle East.


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Fawaz Alhokair set to expand investments in Egypt Thu, 30 Mar 2017 09:30:16 +0000 The Saudi investment group is aiming to expand its portfolio through its Egyptian subsidiary MARAKEZ

The post Fawaz Alhokair set to expand investments in Egypt appeared first on Daily News Egypt.

The Saudi Fawaz Alhokair Group aims to expand in the Egyptian market and diversify its investment portfolio by adding residential activity to its existing commercial portfolio, including the Mall of Arabia. The company will also open new branches for the mall.

Ashraf Farid, chief business development officer at ‎MARAKEZ, the group’s subsidiary in Egypt, told Daily News Egypt in an interview that the Saudi group relies on MARAKEZ in its expansion in Egypt as it constitutes the group’s investment arm in the local market.

When did you start your business? And what are your most important activities?

Fawaz Alhokair Group began operating in Saudi Arabia 28 years ago. The group has different investments in several sectors, such as retail and commercial chains.

The group owns more than 80 international brands in Saudi Arabia, around 21 malls in the kingdom, and 20 malls outside of it. This makes the group the first company in the Middle East to own such a large number of shopping centres.

Moreover, the group also expanded in the hotels sector and currently owns two hotels in Saudi Arabia and another two in Spain, next to investments in electricity generation through solar power plants.

Fawaz Alhokair Group is present in 16 countries around the world, including Italy, England the United States, and Serbia.

What about your presence in the Egyptian market, specifically Mall of Arabia?

The Egyptian market is one of the most important markets for the group. We obtained a land plot in 6th of October City in 2007 to establish Mall of Arabia, which has become the largest shopping centre in Egypt.

MARAKEZ opened Mall of Arabia in 2011, despite the economic developments in Egypt at the time. These circumstances also did not impact our plans to expand in Egypt ever since.

To establish the mall, the company obtained 210 feddans (217.9 acres) during a tender posed by the New Urban Communities Authorities (NUCA) in 2007 at a price of EGP 1,302 per square metre, which amounted to EGP 1.148bn in total.

The company hired new staff in October 2015 to develop the work and turn MARAKEZ into the investment arm of Fawaz Alhokair Group in Egypt.

What about your affiliated brands in Egypt and expansions of Mall of Arabia?

MARAKEZ owns 26 brands in the Egyptian market at Mall of Arabia and outside of it.

The local market is promising, given the population of up to 100 million people. The company decided to diversify its investment portfolio and expand in new projects in the Egyptian retail sector.

The company also plans to inaugurate the second phase of Mall of Arabia in September with investments amounting to EGP 1bn. The rentable spaces that will be added include 40,000 square metres.

The rentable spaces in the first phase amounted to 110,000 square metres after investments of EGP 4bn.

The license includes commercial, administrative, residential, hospitality, and entertainment activities.

The new expansion in the project does not aim to lease shops only, but to also create a new concept of malls—not limited to buying, but rather spending an entire day there.

The new phase includes multi-use gardens on an area of ​​10 feddans (10.38 acres). There will be a walkway area, a closed children’s games area on 5,000 square metres, an events area, and a food court.

What about occupancy of the first phase?

Occupancy of the first phase of Mall of Arabia is over 90%. The remaining part is in the process of renovation.

The Egyptian market needs integrated malls, which still amount to less than 20 malls across the nation, even though shopping season is about seven months of the year, due to the mild weather.

The company will establish a residential project on an area of 21.5 feddans (22.31 acres).

The Ministerial Committee to Settle Investment Disputes had issued a resolution to give MARAKEZ back 21.5 feddans (22.31 acres) and itself kept 40 feddans (41.51 acres) out of 61.5 feddans (63.83 acres) as the total area of the second phase of Mall of Arabia.

The company reached a settlement with the committee after proving its seriousness in implementing the project.

We allocated EGP 1.3bn to develop the residential area of Mall of Arabia. We submitted the project’s blueprints to NUCA as a prelude to obtaining the ministerial decision for the new area, the licenses, and the permits.

The residential project will include buildings composed of a ground floor and three upper floors, as well as residential towers 72 metres high. Each unit will have space ranging between 150 and 300 square metres.

MARAKEZ will prepare the detailed blueprints for the project and agree with a consulting firm to pose tenders for the establishment of the project so as to begin construction this year.

How much was allocated for the project?

The project investment is about EGP 1.3bn. The company will have a specific period to implement the project, according to the settlement with NUCA.

Minister of Investment and International Cooperation Sahar Nasr met last week with representatives of Fawaz Alhokair Group to discuss boosting the group’s investments in Egypt.

The Saudi group allocated EGP 15bn for investments in the Egyptian market through MARAKEZ over the past three years.

These investments include three branches of Mall of Arabia at the New Administrative Capital, New Cairo, and Tanta, along with other projects that are still being discussed.

MARAKEZ obtained a land plot of 100 feddans (103.8 acres) on a usufruct agreement for 50 years in the New Administrative Capital, east of Cairo.

The project investment will reach EGP 3bn to establish the mall. The total area of rentable spaces amounts to 130,000 square metres. We aim to complete establishment of the first phase within three years.

We obtained the plot for a rental value that increases per year. The state will get back the land with the constructions after the usufruct period ends.

How much investments were injected so far?

The company injected $20m into the project until now. The engineering management is preparing the designs to be approved. A consultant will be selected to pose the tenders and begin constructions in June.

Current constructions at the site are conducted by FAS Construction, another subsidiary of Fawaz Alhokair Group. The group also owns an engineering consultant office, but will pose a tender to utilise other contractors.

The first part of the first phase at the new capital is on 12,000 feddans (12,450 acres).

Marakez for Real Estate Investment obtained another land plot of 100 feddans (103.8 acres) for usufruct rights for 50 years in New Cairo for another Mall of Arabia branch with investments of EGP 3bn.

FAS Construction began digging operations. The first phase will be completed within three years.

The land is three kilometres away from 90th Street. We are preparing to pose a tender this year.

Could you brief us on your investment plans outside of Cairo?

Egypt has several large cities with important economic activities. These cities are candidates to attract other branches of brands available in Egypt.

The company obtained a land of 135,000 square metres in Tanta to establish a branch of Mall of Arabia.

The project investments amount to EGP 2bn. The usufruct period is 73 years.

The project will be established next to the college complex in Tanta and close to the international coastal road. The tender for implementation will be posed.

We held meetings with residents of the city and university students. They all agreed on their need for an integrated shopping centre such as Mall of Arabia, especially as they travel to Cairo and Alexandria to visit similar projects.

The prices of land and units in Tanta are high. Some are even higher than Cairo. Many provinces also have strong purchasing power and need commercial projects that offer new activities.

The total investments allocated for the plan until now add up to EGP 11bn. The company is studying other investment opportunities available in the local market to develop new projects.

Are you exploring other opportunities in Egypt?

The company awaits the investment opportunities offered by government agencies, such as the second phase of the partnership projects with the private sector.

We submitted a request earlier to obtain a land plot and develop it with NUCA. We are now waiting for the tender specifications brochure to choose the lands over which we will compete.

NUCA is preparing to offer 15 land plots on areas totalling 4,524 feddans (4,695 acres) as part of the second phase of the partnership projects, including six plots in New Cairo, five plots in Sheikh Zayed, two plots in 6th of October City, one in New Damietta, and one in New Aswan.

Fawaz Alhokair Group investments in Egypt are transferred to the company’s subsidiary in Egypt. The company uses part of the funds to pay for its USD-denominated liabilities and utilises the remaining amount for its investments in Egypt.

The company is one of the few companies in the domestic market that exchanged huge amounts of dollars since 2015.

The exchange rate represents a major challenge to the work of the company in the Egyptian market, but the float of the pound was positive.

What is the fair exchange rate in your opinion?

The market will reach a fair exchange rate this year. The Minister of Finance expected the exchange rate to be at EGP 16 to the USD in the coming year budget plan.

We also decided to collect the rent from the shops in Mall of Arabia in Egyptian pounds instead of the US dollar to help tenants.

We do not operate as a traditional mall owner, whose only goal is to collect money, but we consider tenants and brands our partners.

Sales are done in Egyptian pounds and the shortage of foreign currency hinders tenants from paying in dollars.

We have already amended 50% of agreements and all our new contracts are including payment in pounds.

In addition, we also review our contracts with the companies we deal with. If a contractor is losing due to the exchange rate, we compensate them.

The number of visitors in 2015 amounted to 15 million people. We aim to increase the number to 20 million this year, after opening the second phase of the project.

Rents inside the mall differ according to the space and activity of the shops. Some brands are subsidised because we guarantee demand, which will attract more visitors.

The company deals with about 400 brands in Mall of Arabia. Each contract is different.

The lease period is also different. We begin at one year up to nine years, according to the activity.

Ashraf Farid joined the company in October 2015. He is in charge of the expansion in the Egyptian market and oversees the commercial and legal activities of the companies as well as public relations.


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The Egyptian real estate market: a future between skyrocketing prices and fear of recession Thu, 30 Mar 2017 09:00:21 +0000 Daily News Egypt has obtained data from Aqarmap, the real estate search engine, regarding land prices in Greater Cairo

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Egypt has suffered for over half a decade from turbulences and uncertainty. Since the 25 January Revolution, the economy encountered numerous challenges, from political unrest and declining tourism to foreign currency and fuel shortages.

Consequently, to adopt an economic reform programme aiming to improve Egypt’s public finances, the authorities decided to introduce the value-added tax (VAT) law; raise the price of subsidised fuel; free-float the Egyptian pound; and obtain loans from the International Monetary Fund (IMF), the World Bank, China, and others to finance its ambitious programme in the period between September and November 2016.

The real estate sector was one of the of the most affected sectors after the Central Bank of Egypt’s (CBE) decision to float the pound on 3 November 2016, when it lost around 52% of its value as a consequence. This resulted in uncertainty and doubts in the real estate sector, leading both investors and owners to postpone their decision until the value of the pound stabilises.

Moreover, the currency devaluation greatly increased costs of raw materials, and this had a negative impact of investors’ cash flows. The extra costs were transferred to the end customer, resulting in huge price hikes. Yet, some real estate developers decided to either offer more flexible payment plans or more price-efficient designs, according to JLL’s “Cairo Real Estate” report.

Within a month from the currency flotation, the prices of real estate have spiked. Most real estate developers had increased their prices between 15 and 20%. However, a lot of Egyptians started to buy properties at the new prices with longer payment plans of between 5 and 7 years—some real estate developers, such as ARCO, even offered 10-to-12-year payment plans—as a result of the fear of more price increases in the future.

Consequently, various top-tier real estate developers’ new projects were sold out within a very short period. With the rising uncertainty about the value of the Egyptian pound, many Egyptians tend to consider the real estate sector a safe haven to invest their savings. The longer and more relaxed payment terms allowed people to conserve current prices since they are paying in instalments according to the contract they signed.

2According to Aqarmap, a real estate search engine, the average price per metre for New Cairo’s Fifth Settlement has risen from EGP 5,450 for apartments and EGP 11,550 for villas in November 2016, to reach EGP 6,250, and EGP 13,050 respectively in March 2017, which marks a 12-15% increase.

However, the average price year-on-year increase of 30% in Egyptian pounds was not enough to overcome the decrease in the value of the Egyptian pound as a result of the currency flotation. Average sales prices for both apartments and villas decreased significantly in US dollar terms.

On the other hand, the resale market took a completely different turn. Property owners started to realise they have to increase unit prices, as keeping the same pre-flotation prices would mean losing 55% of the value’s property in dollar terms.

As a result, various property owners doubled the price of their properties after the pound flotation; others calculated the value of their properties in dollar terms previous to the currency flotation and sold their properties at that price. However, buyers cannot afford these prices, as there was no increase in income or savings to fill the gap between the new and old prices.

Furthermore, the difference in expectations between sellers and buyers has led to the reduction of transaction within the market, with the exception of high end luxury properties, which maintained their prices in US dollars.

6.Age2016 was a very busy year for the real estate residential sector, as it witnessed the completion of several new projects across both 6th of October City and New Cairo. In 6th of October City, significant apartment sales were recorded in Ashgar City, Palm Parks, and October Park. In New Cairo, significant sales were recorded by TMG’s Rehab and Madinaty, Emaar’s Mivida, and SODIC’s East Town, according to JLL report.

Yet, rentals within the residential sector have shown more resilience towards currency flotation than sales prices. One of the reasons that could be attributed to this is that some units for rent are targeting foreigners, where asking prices are usually in US dollars—even though the exchange rate used is generally capped at a lower rate than the market rate.

In regards to the office sector, Q4 2016 has witnessed the completion of Majarrah Business Complex in 6th of October City, which added 17,000sqm to Cairo’s office supply. Post flotation, smaller companies have abandoned their plans to upgrade their office spaces and are considering relocating to areas with lower rents as a result of the spike.

The office market has also been significantly impacted. As most lease contracts were formally quoted in US dollars, rental prices have effectively doubled for office occupiers in terms of Egyptian pounds. However, vacancy rates remained unchanged throughout 2016, which represents a sign of limited office activity across the market. New Cairo kept its lead as the most desirable destination for office occupiers, while the activity witnessed in Q4 2016 in 6th of October was very limited. Vacancy rates in the office markets JLL monitored currently stand at 27% and are expected to increase as new supply is added to the market and demand remains at its current levels.

Moreover, because of the witnessed increase in office rent prices, in addition to the increased prices of raw materials, workers demanded higher wages. Companies now naturally face difficulties in paying their rents, which drove some landlords to agree on exchange rates that are below the actual market rate.

7.Family MembersOn a year-on-year basis, office rents stabilised—at least in US dollar terms—as the market is still adjusting to the current business conditions; however, New Cairo was the exception, as a 7% decrease was witnessed. A further lowering of office rent prices might occur during the medium term. A stronger demand could, however, be generated by improved business conditions as a result of the structural and economic reforms being introduced.

No additional retail space was completed in 2016 for the retail sector, leaving the stock at 1.3 million square metres. But in March 2017, the opening of Mall of Egypt took place—a project worth EGP 6bn. The opening of Madinaty’s Mega Mall has been postponed from Q1 2017 to 2018.

On the other hand, vacancy rates have marginally increased year-on-year in 2016 on the back of limited new completions, and are still expected to increase in the short term. While rents for prime units remained stable at $1,600 annually per square metre, the number of units that are being developed and can achieve this level is stagnating.

Further decline in the average price of rent is expected as a result of diminishing purchasing power. A possible recovery in the second half of 2017 is expected in case sufficient foreign currency is available and the adopted economic programme bears fruit.

According to the JLL report, rent to the retail sector was doubled, also quoted in US dollars. Retail tenants faced import restrictions and a diminished demand from customers as a result of the skyrocketing levels of inflation post flotation. Some mall developers have capped the exchange rate in order to alleviate pressures faced by retail tenants while other developers changed their quoting currency to EGP.

During 2016, 500 hotel rooms were added to Cairo’s hotel sector. The opening of the refurbished and rebranded Steigenberger in Tahrir Square, the St. Regis Cairo, and the Radisson Blu Nasr City have been delayed and are now scheduled to enter the market in the first half of 2017.

According to the report, to create value from more efficient operations rather than investing in new buildings during the current volatile business climate, it is forecast that older buildings will be renovated in the short term.

Although Cairo’s occupancy rate was being forecast to be high in Q1 2017 and has increased in comparison to 2016, a pronounced drop in hotel revenues per available room (RevPAR) is expected as a result of the devaluation of the Egyptian currency in November, according to Colliers International’s “The MENA Hotel Forecasts” February report.

9.Purchasing objectiveEven though occupancy rates are increasing, average daily rates (ADRs) did not increase at the same rates due to the current reliance of hotels on the local market, and a ceiling to price increases was established to attract visitors. Once travel bans are lifted and foreign tourists and currency begin to flow, ADRs are expected to increase.

The hotel and tourism industry is the sector of the market that should benefit the most from the currency flotation. Demand in this sector is expected to increase as visiting Egypt has now become 52% cheaper. This has helped increase occupancies in the hotel market. However, the travel ban imposed by Russia and the UK took a significant toll on tourism inflows, especially in Hurghada and Sharm El-Sheikh.

What’s next? 

JLL has released data on construction costs for different asset classes in Cairo, with this data collected from their growing project and development management teams. The devaluation of the pound has resulted in a major spike in construction costs in 2016, and this is expected to result in double-digit increases in tender price inflation over the next two years.

Furthermore, there is a higher risk of approaching a real estate bubble, following the current boom witnessed within the sector, as a result of the incredibly high profit margins, decreasing demand, and increasing prices, Samih Sawiris, head of Orascom Development Holding, told Daily News Egypt.

One of the main issues facing Egypt’s real estate resale market is the fact that it is still underdeveloped, and most property owners ask for the requested amount as an upfront payment. During the current environment of volatility and uncertainty, buyers will avoid paying large amounts of cash. As a result, buyers tend to buy new properties with long-payment plans.

If Egypt’s real estate market indicators are measured in Egyptian pounds, prices will show a general increase. Yet in US dollar terms, prices will show a decrease. The decrease, however, does not equal the 52% devaluation of the pound caused by the flotation in November but is slightly lower due to the value indicators’ increase in pounds.

In the near future, real estate market prices are forecast to increase further to match the value lost by the Egyptian pound and rising inflation. However, in US dollar terms, prices of real estate properties have witnessed a significant drop, and they are not expected to reach pre-devaluation levels. While in regards to the resale market, it is expected to take a few months to stabilise but will eventually increase by percentages comparable to the new sale market.

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Land sales in 2016 greatly exceeded rates of previous years: Madbouly Thu, 30 Mar 2017 08:00:37 +0000 Ministry to expand in granting lands to achieve a real estate boom

The post Land sales in 2016 greatly exceeded rates of previous years: Madbouly appeared first on Daily News Egypt.

The Ministry of Housing laid down several aspects of its work in the coming years, including continuing construction at the New Administrative Capital and expanding its offering of lands for real estate companies and individuals in Egypt and Egyptians living abroad.

In an interview with Daily News Egypt, Minister of Housing, Mostafa Madbouly, said that the ministry relies on land offerings to stimulate the real estate sector and provide jobs at real estate companies, so as to counter the recent economic challenges, such as the rising cost of projects after flotation.

What are the main aspects of the ministry’s work in the coming period?

The ministry began a series of lands offerings this year, including lands for residential and investment uses, along with the ministry’s own residential projects. The New Urban Communities Authority (NUCA) aims to provide ready-made lands with facilities in large and medium areas for real estate companies, as well as small land plots for individuals.

Are there statistics on the size of NUCA’s offerings?

NUCA’s offerings in 2016 surpassed its previous offerings. In 2016 alone, we offered 80,000 land plots to individuals across several housing categories.

What is NUCA’s plan in 2017?

The plan is to offer 31,300 land plots to individuals across different housing categories. The offerings will be announced in the coming period after finishing pricing and preparing the specifications brochures.

In April, we will offer residential land plots to Egyptian expats. The prices for the land will be paid in US dollars through wire transfers to secure inflow of hard cash and foreign currency.

What are the details of the offering?

The new offering includes 6,429 land plots at the Beit Al-Watan project. These lands are in nine cities. The offering will also include 3,312 units as part of the NUCA’s kind share in Madinaty and El Rehab projects in New Cairo, along with 7,054 units in Dar Misr for Egyptians abroad.

The Ministry of Housing has earlier offered 2,568 units to Egyptians abroad. The price of these units was $800 per square metre in El Rehab and $575 per square metre in Madinaty. We only requested 40% advance payment and the remaining part of the payment extends over seven years in instalments.

Moreover, NUCA received 10,680 units from Talaat Moustafa Group as part of the settlement agreement. The number of units will increase even further after adding 1.1 million square metres to the NUCA’s share.

What are the details of offering lands to Egyptians abroad?

NUCA will offer 25 services land plots in the Beit Al-Watan projects in four cities and five integrated urban land plots in three cities to Egyptians abroad. Awarding the plots will rely on early booking and stipulating the establishment of companies to develop the projects first.

Furthermore, we are also preparing to offer units in the low-income social housing project for Egyptians abroad with different payment methods.

The ministry will offer 14,900 units in the third phase of Dar Misr’s middle-income housing projects in seven cities and 3,000 units in Madinaty.

In 2016, the ministry sold EGP 22.2bn worth of investments, services, and residential units and lands to both real estate companies and individuals.

How are the ministry’s projects contributing to the real estate development plan?

The ministry is contributing to the state’s plan to boost the business size of the construction sector to about EGP 1tn over the coming five years. The ministry also offers lands to real estate companies and individuals, which eases the burden of construction on the ministry, while at the same time it increases the activity of real estate companies.

What are the details of the NUCA’s investment plan?

NUCA’s investment plan in 2017 is the biggest in its history, reaching as much as EGP 37bn, which is EGP 15bn more than the 2016 plan. The ministry aims to increase NUCA’s investments to reach EGP 50bn in the coming fiscal year. Most of these investments will be channelled to developing new cities and expanding in different investment activities.

Furthermore, NUCA’s investments increased from EGP 4.8bn in 2012/2013, to EGP 7.7bn in 2013/2014, and to EGP 12bn in 2014/2015 before hiking to EGP 22bn in 2015/2016.

How does this impact the real estate sector?

Increasing NUCA’s investments reflects the growth in the number of projects and provides lands ready with facilities and residential units that fit all segments of society. The government aims to attract foreign investments to the Egyptian market through partnership projects between NUCA and real estate developers. The second phase of these projects will be posed in the coming period.

What are the details of the second phase of the partnership projects?

NUCA is preparing to offer 15 land plots in New Cairo, Sheikh Zayed, 6th of October City, New Damietta, and New Aswan with a total area of 4,524 feddans. Plots range in size between 19 and 2,000 feddans.

The permits for these lands include residential, commercial, administrative, entertainment, and tourism activities. NUCA urged Egyptian investors to cooperate with Arab, especially Gulf, companies to compete on partnership projects. We also prefer giving lands to the companies that pay part of the price in US dollars.

NUCA signed four partnership project contracts with Egyptian and Arab companies for total areas of 2,000 feddans, with investments reaching EGP 131bn. Constructions are ongoing in one project, while the other three are pending ministerial approval.

What are the developments in the new cities’ plan?

The ministry will provide several spaces to the work of real estate companies in the cities that are under development, including the New Alamein City. We are preparing to offer the first phase of investment lands. Companies will receive opportunities in other cities. We are currently developing New Aswan and New Damietta to expand tourism activities. We are also initiating construction in Nasr City and West Qena in Upper Egypt.

The new land offerings will provide lands for the real estate development sector to face the growing size of real estate projects in the current and coming fiscal year.

Does the ministry have a plan to solve the problems investors face?

The Ministry of Housing is working to solve the problems that investors face in the real estate sector. We took several decisions to solve the investors’ problems and to ease the procedures for real estate companies. This was done through a cooperation protocol between NUCA and the Real Estate Development Chamber, affiliated to the Federation of Egyptian Industries (FEI).

This protocol includes the formation of a joint committee to solve the problems of investors and developers. The committee will also work on speeding up the process of granting permits.

Additionally, the State Council is reviewing the final draft of the new NUCA real estate bylaws, which would include the procedures for reoffering lands and contracting with real estate developers to ensure the state’s rights and deal with serious investors only.

What are the developments at the New Administrative Capital project? 

The New Administrative Capital is one of the ministry’s most important investments in the coming period—in terms of size, business volume, and number of companies working on site.

The ministry is preparing to put up 17,000 units as part of the first offerings in the residential sector of the capital. The establishment of these units will be completed in December. The total number of units will reach 26,000 by mid-2018.

What is the main objective of the project?

The New Administrative Capital is a development project that aims to create an integrated business environment equipped with a high-quality infrastructure. It also aims to attract capital and global companies to reduce congestion in Cairo, resulting from the number of employees at ministries and government agencies. After that, Cairo will become a capital of heritage, culture, history, and tourism.

A number of Egyptian construction companies began to implement the government district, which will include both the parliament and cabinet buildings.

The first precedence is of 12,000 feddans with investments valued at EGP 60bn. The total area of the capital is 170,000 feddans. The company was established with EGP 6bn of paid-up capital from the armed forces and NUCA to run the project.

Construction companies are implementing 26,000 units in the residential district on 1,000 feddans. The cabinet has awarded four contractors agreements worth EGP 4bn to provide utilities to 40,000 units in the first phase.

Does the project affect the overall development plan drawn up by the government?

The size of the new capital is twice the size of New Cairo. It will provide enough land for investments over the coming 50 years. The capital is necessary for the coming period and has been postponed long enough.

The New Administrative Capital is a major national project, despite all the opposing views. Only 6.5% of Egypt is inhabited. The ratio is slowly going up. But to achieve the vision of Egypt 2052, we have to double the populated area to 12%.

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