CAIRO: Even with demand for high-end real estate at a low ebb, a handful of companies are forging ahead with projects they hope will coincide with high market demand a few years down the road.
In keeping with that theme, on Monday two companies, one a real estate developer and the other a project manager, signed a partnership agreement.
In May 2007, Barwa New Cairo, owned by Barwa Real Estate, one of the Gulf’s preeminent developers, purchased 8.5 million square meters of land for development in New Cairo.
Since, the firm has been working to refine a model for the development, which is expected to be a mixed-use project centered on middle and high-end housing units.
Barwa has issued a 12-year development plan for the land and the plan, said Barwa New Cairo CEO Tarek Al-Shazly, is to have “the first phase complete in the next two to four years.
To help work on the project, Barwa Monday signed an agreement with Barwa Real Estate subsidiary Qatar Project Management (QPM), which will serve “as a platform to reach [Barwa’s] ultimate vision, said QPM CEO Nasser Abdul Rahman Kamal.
QPM was established early this year, but it already has a number of projects around the region in places in like Syria, Sudan, Yemen, Morocco and Libya.
QPM said it will involve itself with a number of issues surrounding the New Cairo project. Services it offers include pre and post construction management services, cost estimating and control systems, design management and quality management.
In other words, Barwa has created a design for the development and has hired a contractor to carry out that vision. QPM will act as something of a go-between for the two sides.
Al-Shazly said that even though it’s a new company, QPM possesses the sort of know-how it will take to see the project through to completion.
When asked whether the global economic slowdown had given him second thoughts about the project, Al-Shazly argued that Egypt’s performance in the recession had given him reason to be optimistic.
“Egypt was the least impacted throughout the region, he said. “Any hits on other markets, brings attention to [the Egyptian] market.
Al-Shazly said the company tweaked its master plan in the wake of the global crisis but said that the plan remained “basically the same.
He says he’s optimistic, though, that developments in the real estate finance markets may make Barwa’s houses more widely affordable.
Mortgage finance, he said, “has been slow over the year. The low was in 2007.
But development in the private sector, as well as new government regulations, make him hopeful that financing plans will develop to boost demand that can meet the waves of supply expected as developers on all sides of the city begin putting housing units on the market.
And Barwa thought big when it developed this project. The development will contain 40,000 housing units, in addition to a hospital, three hotels, international schools, office building and a shopping center.
With plans to deliver the first units in 2012, the company will develop in four phases.
If Barwa is thinking big, it’s found a likeminded partner in QPM. Kamal said his young company was working with the aim of becoming one of the top five international project developers by 2020.
He also plans to increase the total number of employees at the company by 50 percent.
While the company has been most engaged with the real estate industry, Kamal said QPM has the capacity to engage in other sectors like energy, education and healthcare.
Completion of this project is far enough off that the global economy may yet have a few more boom-bust cycles before then. But the folks at Barwa and QPM, with their ambitious plan, seem to be playing for broke.