By Lamia Nabil
The Six of October Development and Investment Company (SODIC) achieved EGP 1.8bn in sales during 2012, said Ahmed Badrawi the company’s CEO, during a press conference held on Thursday at the Cityscape Egypt event in Cairo.
Badrawi further revealed that the company had exceeded EGP 680m in sales during 2013 so far. He also said that SODIC had spent a total of EGP 800m in real estate development projects during 2012 and will invest a total of EGP 1bn in 2013.
“Also, as this is SODIC’s 7th Cityscape exhibition, we announce that we will deliver seven projects this year,” he said.
“I’m very optimistic about the market and the company under the current circumstances and the economic situation,” said Badrawi. “We are quite fortunate, as the real estate industry seems to be strong enough to face these kinds of economic problems.”
Badrawi said that the challenges SODIC, and Egypt’s real estate market as a whole had faced, included spikes in construction materials costs, which, he added, would eventually lead to increased development costs for the market.
“Real estate companies have been and will continue to defend their customers and their purchasing power by providing financial solutions and payment schemes to suit their needs,” he added.
Badrawi was also bullish about the sector, describing the Egyptian real estate industry as “a driving force for the economy at large”, “a lifeline for 26 other industries” and a provider of numerous employment opportunities.
He also stressed the vital role of the Ministry of Housing, Utilities and Urban Development in putting forth new legislations, regulations and investment incentives “so that the sector can overcome the current challenges and revitalise its function as a major contributor to the economy”.
“The authorities stopped issuing any new lands two years ago,” he continued. “It seems the new government is reluctant to do so because of the absence of credit in the market generally, whether for developers or consumers.”
“We have actually facilitated all customers’ payments during the last two years,” he revealed. “Our edge lies in our ability to deliver projects on time, even despite the current difficult situation. All our competitors decided to slow down construction for their projects for many reasons, but our strategy has been to push the construction work and to put all our money in to these projects in order to deliver on time.”
“We have taken risks in this regard,” he added. “And we have had very few customer cancelations despite all the problems we have faced during the past two years.
“I think this is one of the largest budgets for construction in the business, and allows us to deliver according the schedule and with the required high quality,” he said.
“Generally, the company is in extremely good position financially, legally, and in terms of reputation”, said Badrawi.
Former Chairman of the Board of SODIC Magdy Rasekh is currently accused of squandering, along with Housing Ministry officials, some EGP 970m in public funds by illegal profiteering from a plot of land in the Sheikh Zayed City which was sold to SODIC.
Rasekh, who is father-in-law to former President Hosni Mubarak’s son, Alaa, resigned from the board of SODIC on 10 May 2011, and currently owns a 0.0017% shareholding in the company, according to its website.
“The Egyptian real estate market derives its strength from various sources, including supportive underlying demographics with young couples always on the search for a home, a continued shortage of housing, and a lack of assets in which to invest,” said Ashraf Farid, executive director of operations at SODIC during the press conference. “The resilience of our market is reflective of our country as a whole: despite recent economic challenges, we remain a prime destination for real estate investment.”
Farid added: “The US Dollar exchange rate is a major issue for us, and for the sector as well, because most of the raw martials we use need foreign currency.”
To counteract this problem, the company tenders projects as soon as they are launched.
“I think things will stabilise in the coming few months as we start the summer session and most of Egyptians [abroad] transfer their money,” he added. “By then, hopefully, things will get better.”
“According to the last market research released in 2012,” he continued. “We have a market share of 50%, which is good given the land banks we currently posses. However, we don’t look to the competition as we try more to focus on our objective. During the past two years, which was a very challenging period, SODIC managed to create a very credible name when it comes to delivery and commitment, which is considered a very good achievement in such a climate.”
He said the company is looking to launch a new family housing project soon, but still awaits the “government to issue the necessary land to start the project”.
SODIC’s board also mentioned the status of their current land banks. In West Cairo, the company owns 1,500 Feddan for its SODIC West project, 300 feddans of which will be utilised in the upcoming period, according to Badrawy. “This year we are ready to deliver the first phase of the Westown project, as well as The Polygon, Forty West, and The Strip.”
Westown is SODIC’s mixed-used business and residential project. It will comprise offices for businesses at The Polygon, residential apartments at Forty West, and an entertainment and shopping hub at The Strip.
The company’s Kattameya Plaza project, which will house luxury apartments close proximity to New Cairo-located universities such as the Future University and the American University in Cairo (AUC), has now been completed, with all 480 units sold, according to Badrawi.
Badrawi also mentioned that SODIC delivered 800 units in Allegria.
Allegria is a residential project located in the fast growing suburb of West Cairo, off the Cairo-Alexandria Desert Road. The project, covering 2.4m square metresof land, holds over 1,200 villas and townhouses.
“We are constantly on the look-out for ways to expand and diversify our portfolio and are studying the feasibility of more investments in the future,” continued Badrawi. “Our financial position is strong and our operational performance is equally strong, due to our ability to adapt to consistently changing market needs. We are proud to be an Egyptian company working in Egypt because, to us, this is not merely an economic commitment, but a national duty,” said Badrawi