Abraj Misr signed a strategic partnership contract with Marriott International, owner of Marriott hotels and resorts worldwide, to build a variety of hotel apartments under the name “Element Cairo” within the company’s The Gate project on Tuesday. The project is the largest environmentally friendly residential, administrative, and commercial project in Egypt and the Middle East, with an investment cost of approximately EGP 4.5bn.
Abraj Misr has also contracted with Hill International to manage the project after completion.
The company is developing another real estate project, The Shore, which accounts for 180 acres in the North Coast. Abraj Misr targets reaching EGP 1.6bn in sales for its two main projects, compared to EGP 560m last year.
Daily News Egypt met with Abraj Misr CEO Ali Rabei to talk about the company’s strategy in managing and developing The Gate project.
What is the size of investment for the hotel apartments?
The investment cost of hotel apartments that will be built by Marriott International is EGP 620m.
What is the timeline for the project’s phases?
The first phase of the project is scheduled to be completed by the end of 2019. This phase comprises both hospitality and residential units. The full delivery of the second phase of The Gate project is expected to take place in 2021.
The company is in negotiations with the Arab African International Bank and Ahli United Bank for a loan to fund The Gate project. How large is the requested loan and when do you expect the banks to make a decision?
The requested loan is EGP 600m. I expect that the decision will be made within 3 months.
What is the role of Marriott International in the project?
The contract signed between Abraj Misr and Marriott International reflects the agreement for Marriott to be a service provider so as to be the largest Element Hotel in the Middle East and African region. Element Cairo is being developed by Abraj Misr Urban Development and is owned by Middle East Real Estate for Development (MERED), an Egyptian limited liability company. The contractual agreement reflects the provision of the hospitality services to these hotel apartments.
The company will announce new projects in the second half of 2017. Can you give us a hint regarding the type of projects and the potential locations?
We aim to focus on launching new projects in other areas including Sheikh Zayed and Ain El-Sokhna owing to the large potential of these areas.
Will the company raise its capital in the coming period? If so, by how much and when?
We target increasing the capital of MERED under the Abraj Misr umbrella to EGP 300m within the next three months.
What is the management system between Abraj Misr and Hill International?
Abraj Misr has fully handed over the management of The Gate project to Hill International as the sole project manager that is responsible for all phases of the project until completion.
Do you have any concerns about the declining tourist influx in Egypt? Will this affect the project’s revenues?
First, the location of The Gate project in the heart of Heliopolis differs from areas that suffer from declining tourism rates. More importantly, I believe that this current situation, the declining tourist influx to Egypt, is a temporary factor. Egypt has been and will remain as a key tourism destination in the Middle East and Africa owing to its historical prominence in the world.
In addition, as a real estate developer, I believe it is our role to attract international brands and foreign trade to Egypt, which will lead to the promotion of tourism once again. In addition, we are all motivated and believe that after three years, once the project is developed, this situation will be resolved and tourism will be at its peak once more.
When will you contract with Arab and Egyptian investors for them to participate in funding The Gate project?
We are in the final stages of negotiations with both Arab and Egyptian investors towards funding The Gate project. We aim within to increase our capital and sign the final contracts within three months.
Which company will be responsible for maintenance services?
The maintenance services will be handled by a services facility management corporation. This will be announced once negotiations with several international service facility providers are complete.
What distinguishes hotel apartments from other units?
The hotel apartments are eco-friendly, as the Element brand is internationally recognised as a green brand.
The hotel will offer spacious studios and one, two and three-bedroom suites managed by Marriot International.
The services that distinguish these units from others is that they are fully furnished—Element Cairo will offer a fluid design of modular furniture, fully equipped kitchens, spa-inspired bathrooms, and the signature Westin Heavenly bed. Hotel amenities will include free WiFi, complementary bikes to borrow, a 24-hour fitness centre, and an all-day dining café.