PACT Real Estate Group is a recently established company, which plans to invest EGP 2bn-EGP 3bn in the coming five years in the real estate market for residential and tourism projects. Daily News Egypt sat down with Mohamed Gamal, PACT’s President, to discuss the company’s recent project, White Bay, and their future investments.
Can you brief us on PACT Real Estate Group and its projects?
The company was established in December 2014. The first project is White Bay in Sidi Heneish. We also have a project in New Cairo, and hopefully in Ain Sokhna within the coming year.
Tell us about White Bay’s master plan?
Let me tell you about the land. PACT is a partner with Redco Construction for the land. We own some of the land, and we are partners in other parts.
What is your percentage of ownership?
Between what we fully own and what we are partners in, we have about 80% of the project. The land is very distinguished. Its weather and sea are nice throughout the year. The architecture design is also great. The project is spread over 70-75 feddans, and we constructed on 15% only of that area. We could construct the ground floor and two floors and a roof. However, in 90% of the project, we constructed a ground floor, a first floor and a roof. This is to better manage the project and to have a successful project. So, instead of having more units, we opted to have fewer units to create a true community. The project has about 525 units. It could have been 1,000-1,200 units, but we wanted the project to succeed in terms of quality, facilities and services.
In which stage are you in currently?
We are working on studying the details of the designs and the technical tests. We will start construction by the end of the year, in November or December. Hopefully, the first phase will be delivered in the summer of 2018.
When will the contract sales start?
We have already started and we sold about 80% of the first phase, which is about 100 units.
What is the project’s construction cost?
The construction cost of the project is almost EGP 700m during the five-year duration of the project. The construction phase will be around three or four years. The construction cost of the first phase is EGP 200m that will be pumped during the coming two years. We will deliver the project in 2018, then in 2019, and later in 2020-2021. The last phase will be the hotel.
What are the expected revenues of the project?
We expect EGP 1.5-EGP 1.6bn in revenues.
The company has previously referred to the units in the project as smart homes. Can you tell us more about that?
We have two main pillars. We want to build alliances that can help us deliver a product with high quality. The second is that we want to facilitate life for the client. A service is cost-centred, and if it cannot be covered it will be a problem. We wanted smart homes because we wanted to facilitate the residency of the client, from electricity to operation of electronic devices using smart phones. Anyone who wants to travel would like to get their work done, so there is also a business centre. We want to have this project operating all year and we want to have the aspects that will make that happen. There is also housekeeping services and catering services.
You mentioned a project in New Cairo. Can you give us more details on that?
This is still under study so we would be ready to talk about it by next year.
The company announced that the cost range of any future project will range from EGP 500m to EGP 700m. Will they all be residential?
Mainly residential, and the corporate and commercial buildings will accompany those projects. Any compound that is being built must have a commercial area. During the coming three years, we will work on developing residential projects, whether as first home or a second home [vacation pots].
Are you eyeing any other projects on the North Coast?
We are focusing on White Bay and we want it to grow. We are focused on having all required ownership papers and work licences, to avoid any problems that can face developers in the area. It is a new destination, and that was a challenge. Most of the compounds on the North Coast are located in a certain area, and we wanted to take a challenge and truly develop. The idea that it was far away would make people fearful of it, but now there is a new road being implemented that serves the North Coast destinations until Marsa Matruh. The time needed to arrive to White Bay [from Cairo] will be around two hours. There is a city being constructed by the government close to Sidi Heneish, that will help populate the area.
You mentioned having a hotel in the project. Can you give us more details on it?
The hotel will be owned by us, but managed by a hotel management company in order to have the needed experience. We can’t disclose who we have talked to, until the talks become more serious and committed. This will not be earlier than two or three years from now, as the project starts its operation.
How did you finance White Bay? Did you rely on any bank loans?
We didn’t rely on any bank loans. It was financed by the company, and we will be covering almost 25% of each phase. The remainder will be financed by itself [sales] over time with the cash inflow, which is the finalisation of 30% of the project. If any hinderances are faced, the developing company will pump in some money to deliver on time.
Will that remain your financial strategy in future projects? We have seen many developing companies rely on the stock market for finances, would you consider that?
This is not an objective, but it can happen but according to plans. If we find that it will suitable to enter the stock market, we will do so. It is a mandatory step for any growing company, but we need to create value in the market we are in first. It might be a step taken, but no less than five years from now.