Al Arabia Real Estate and Development (ARCO) aims to achieve contractual sales worth EGP 5bn during the current year, driven by the real estate market boom and the launch of new projects in 2018, according to ARCO Egypt’s executive director, Ayman Ibrahim.
Ibrahim said that the market has seen many strong changes over the past year as the market in the current year is witnessing strong improvement, especially with the continued presence of real demand which depends on the increase in population, in addition to the continued gap between supply and demand that not all companies operating in the market can meet.
In an interview with Daily News Egypt, Ibrahim said that ARCO seeks launching business in the Delta and Upper Egypt regions.
What will ARCO launch this year?
The company is going to launch a new phase of the Lavande project, which is located in Sixth of October City on 56 feddans and includes townhouses and villas. It is located in front of the New Gezira Club and features 345 units. The design will be inspired by southern France.
The first phase consists of 100 units and launched on 24 November 2016, with total investments worth EGP 1.5bn.
Further, the company is developing a new phase of the Citystars Al Sahel project, which includes 900 residential units.
Moreover, ARCO is processing a partnership with the Ministry of Housing to develop new projects in New Cairo and Sheikh Zayed cities.
What is the value of construction contracts for the current year?
Our plan for this year is to pump EGP 1.7bn into construction contracts for our development projects.
What is the value of sales targeted by the end of the current year?
The company targets achieving contractual sales worth about EGP 5bn in the current year, an increase of about 20%, as the market supports the investment plans of the company.
What is the company’s expansion plan?
The Delta and Upper Egypt regions are at the top of the company’s expansion plan and is a key step that will likely come later for all companies. Currently we do not have a specific focus, but Upper Egypt will inevitably come as part of our investment plan.
How many units will be delivered in the coming period?
By the end of 2019, the first phase of La Fontaine project and consists of about 250 units. La Fontaine is located in New Cairo on an area of 34 feddans. It is located in front of Wadi Degla and just three minutes from the American University in Cairo (AUC).
The project include 85 townhouses and 565 units. Each group of buildings will have an indoor swimming pool and health club.
Moreover, the company will deliver 500 units of City Stars Al Sahel project. The project’s total area is 743 feddans and we are currently working on the first phase on 120 feddans. The project is being developed over 10 years.
The new phase of Citystars Al Sahel is sponsored by an international sports celebrity. Its lagoon area, 480,000 sqm in size, will be surrounded by 130 villas, both separate and stand-alone.
In early May 2017, ARCO signed Brazilian football star Neymar da Silva Santos Júnior as its brand ambassador for Egypt and the Arab world.
Neymar serves as the company’s public face across the MENA region as ARCO prepares to launch a host of new developments as well as developing phases of its existing communities.
What is the value of investments that have been spent on the project so far?
We have invested a total of EGP 1bn on the project so far. We contracted with Crystal Lagoons for the construction of an industrial lake on an area of 60,000 sqm within the project. During the current year, the project will see a big boom in construction work.
Does the company intend to invest in the New Administrative Capital?
The New Administrative Capital is part of our plan for the coming phase.
Do you expect a real estate bubble in the coming period?
The current period is witnessing great demand for investments in the sector, as Egypt’s real estate prices are unmatched compared to neighbouring and foreign markets, therefore the market is very far away from reaching a bubble.
We need to develop partnerships to carry out projects suitable for all segments of clients. Moreover, clients’ purchasing power is still strong in the sector.
What is your opinion regarding mortgage financing in Egypt?
The government has to support the mortgage financing system. In foreign countries, real estate financing is essential and Egypt needs it very much to meet the great demand on property.
What do you think about the overall real estate export strategy?
We target Egyptian expatriates to export property to in particular, as we go to the Gulf markets because the purchasing power of the Egyptians there is strong. In addition, we target the Arabs in residential tourism projects and we may target foreign clients, especially as the country aims to operate areas such as the North Coast throughout the year.
What are your expectations for this year’s prices?
I expect a 20% increase in prices by the end of the current year, and the price is still low compared to other markets of the region. Egypt has good investment opportunities in real estate, which I hope will benefit all investors.