Despite the novel coronavirus (COVID-19) outbreak, Madinet Nasr for Housing and Development (MNHD) has boosted its sales in the recent period.
The company adhered to the government’s precautionary measures and adapted its strategies in line with these measures to keep pace with new needs and requirements during that period, said CEO of MNHD Ahmed El-Hitamy.
El-Hitamy told Daily News Egypt that the Egyptian government has taken the right measures to mitigate the repercussions of the health crisis, noting that the local real estate market is improving and will keep growing.
Daily News Egypt sat down with El-Hitamy to learn more about the company’s work strategy and plans.
How did MNHD manage to boost its sales despite COVID-19?
We developed and implemented alternative plans to accommodate and mitigate the possible negative impacts on our operational results. We continue to offer the best in class residential and commercial units in our two flagship locations in Cairo, and we are looking forward to launching outside of Cairo soon.
Therefore, the company has taken some procedures and strategy was planned before the COVID-19, which is accelerating the construction process to avoid the increase in building materials prices and the company has visions that Egypt’s real estate market is stable, therefore, we have taken the decision to speed up construction works in our projects.
Would you please elaborate on the client’s needs during COVID-19 epidemic?
Many customers were afraid that they would be able to pay instalments of their units, while others were afraid that the company may fail to complete its projects on time, due to the COVID-19 crisis.
On the other hand, the state has taken some measures, such as slashing interest rate by 300 basis points, mainly in line with the stability of building materials prices, which prompted the company to offer its clients flexible and reasonable payment methods. First, we have provided customer with a grace period of three months to retrieve the unit to the company instead of 14 days according to the Egyptian law. Second, we provide clients with a delivery period of six months to a year.
Slashing interest rates gave developers the opportunity to provide their clients with a long payment plan, which may decelerate the construction process. Consequently, the company provided the 3% decrease in interest rate to its customers in the shape of discount on unit or return. We offered clients with 30% return or a cashback reward programme in the period from March to June. Some clients were more interested in low price more than long payment plan.
We achieved a 114% increase in contractual sales and we doubled the cash receipts in the third quarter (Q3) of the current year compared to the Q3 2019.
We have recorded consolidated revenues of EGP 1.8bn in Q3 2020, reflecting a rise of 22% year-on-year (y-o-y) from the EGP 1.4bn recorded during Q3 2019.
Have construction works been affected by COVID-19 outbreak?
We did not stop construction works for a single day, and the company has taken precautionary measures to keep the work on.
How much is the company’s investment in construction works in Q3 2020?
We have directed EGP 4.4bn to construction works.
What is the size of the company’s client base?
We have more than 8,000 clients. Our sales average 2,000 units annually.
What are the projects in the pipeline?
For the first time, we plan to launch a new project in Assiut governorate. The project spans over 104 feddan and comprises 1,000 units with EGP 2.5bn in investment. The company eyes EGP 4.5bn sales from the project which will be developed within seven years. We expect it will be sold out after three years. We intend to launch the first phase of the project for sale in the first half (H1) of 2021.
We are keen on expanding outside Cairo and we used to work in virgin places to accelerate the urbanisation of these regions.
Does the company aim to expand in new areas? Where?
We are interested in having businesses in the North Coast and Ain Sokhna.
How many units are still under construction?
We are currently constructing more than 3,000 units and MNHD plans to complete these units by the end of the next year.
In total, MNHD has over 10,000 units under development or design across eight key phases/projects in the Greater Cairo Area, offering exposure to a broad socioeconomic spectrum of consumers.
Do you plan to offer new products in 2020?
Certainly, we aim to offer new phases in our existing projects. We will offer Elect phase Taj City New Cairo development before the end of the current year. The phase spans over approximately 35 feddan, and comprises 280 villas with expected sales of EGP 2.5bn and will be offered in phases.
Regarding Sarai project, we propose to offer products inside the project next year. Moreover, the company has recorded EGP 2.5bn in sales inside the project in the first nine months of the current year. The company has developed 1.2m sqm out of 5.5m the total project’s area.
Does COVID-19 outbreak push the company to introduce new services in its projects?
We have contracted with some medical agencies to provide medical and emergency services inside our projects.
What is the size of MNHD’s land bank?
Our land bank is 10m sqm.
Do you plan to sell lands inside the company’s projects in the current year?
We will continue our strategy to sell plots of land in our projects to accelerate the development of our land bank. Additionally, we look forward to cooperating with specialised entities to integrate services inside the project.
How do you see Egypt’s real estate market amid COVID-19 pandemic?
The Egyptian government has taken the right measures to absorb the crisis and improve the market amid COVID-19 crisis. Local real estate market is improving and will keep growing. For MNHD, the sales have been boosted due to adhering to the government’s measures in the current period. We also adapted our strategies to these measures in order to keep pace with new needs and requirements during that period. I believe that the sector will grow and succeed in achieving more sales in light of the new incentive measures provided by the state.