SODIC halted its real estate sales in early 2023 in order to review its unit prices amid hiking construction costs. The company, of which 85.5% is owned by Aldar-ADQ consortium, has recorded total sales of EGP 2.78bn in the first quarter (1Q) of 2023, compared to EGP 3.74bn in the same period last year. The decline in sales during 1Q 2023 on an annual basis is due to the limited launch of new projects in 2023 compared to the same period of 2022, according to the financial results of the company in 1Q 2023.
Sales cancellations reached EGP 579m in 1Q of the current year, which represents 21% of the total sales during this quarter, compared to cancellations of 10% during the same period in 2022. The increase in sales cancellations during this quarter is mainly due to the company’s tendency to cancel sales of stalled units, allowing these units to be resold at current market prices, thus supporting profit margins and increasing the total returns on those sales.
Net cash receipts amounted to EGP 2.03bn during 1Q 2023 with a default rate of 8.2%, compared to net cash receipts of EGP 1.37bn and a default rate of 8.8% recorded in the 1Q of 2022.
SODIC’s majority shareholder Aldar affirmed its commitment to being a long-term strategic investor in Egypt.
In a press release the company said: “In 2021, Aldar led one the largest foreign direct investments into the Egyptian real estate sector with the acquisition of SODIC, which is one of the leading real estate developers in the country. Following the acquisition, SODIC achieved EGP 21.3bn in development sales in 2022 which represents an 87% year on year growth. This growth is in line with Aldar’s strategy to advance SODIC’s position as a leading national developer by scale and reputation. That performance has spilled over to 2023 with EGP 3.1bn recorded in sales and reservations in 1Q 2023, which shows the resilience and attractiveness of the real estate market in Egypt.
SODIC’s future growth potential continues to be positive with a revenue backlog of almost EGP 35bn. It is also working on expanding its land bank in multiple areas across Egypt, including west Cairo, east Cairo and the North Coast, the company concluded.