President of real estate development company PACT Mohamed Gamal met with Daily News Egypt to discuss the latest developments in the company’s project White Bay. Gamal revealed the company’s delivery plan, its planned investments, and its vision for the hotel in the area.
The company previously announced its intentions to invest EGP 1.7bn over the next 10 years? What are the developments with these investments?
PACT, as you said, planned to invest around EGP 1.7bn, however, this amount has now increased. Investments in White Bay were around EGP 700m and this has now surged to EGP 1bn owing to various reasons such as reprising and inflation among others. These reasons will lead to an increase in our investments in the coming period from EGP 1.7bn.
How much do you expect the investment figure to be?
I expect that, within the next five or six years, it will be EGP 2bn.
What projects is the company focusing on at the moment?
Our main focus is White Bay in Sidi Hinish and everything else remains on hold. We want to deliver the project on time.
You previously told Daily News Egypt that you will deliver the first phase of the project in summer 2018, are you still planning to deliver on that date?
Yes, hopefully, we still have the same plan.
As I understand, the project is comprised of four stages and a hotel?
Yes, but instead of introducing the hotel after the fourth stage, we are planning to introduce it with the second stage between 2018 and 2019. This is still being studied.
What is your vision for this hotel?
It will be a five star hotel. Having a hotel in the region will revive the area as a vacation spot; we want the hotel to serve the entire area [not just White Bay]. We met with some hospitality experts and hotel owners. Now we are studying the option of partnering with an investor for building and we will have shares in the project. We are still studying our options at the moment. It will be a partnership, of sorts.
One year ago, 80% of phase one was sold. Did you start selling anything from phase two?
We have almost sold every unit in phase one and now we will launch phase two. At the CityScape property event, we will launch the second phase. The remainder of phase one are more selective units that we are reserving for some clients.
Can you give me more details about the second phase?
It has around 160 units and expected sales of EGP 500m. Some units were reserved and the contracts signing will happen at CityScape.
You previously told us that expected profits of the project are EGP 1.6bn. Has this figure increased?
The profit reflects the increase in investments but any change would be marginal. Profits would not notably increase, they might be delayed. Our focus at the moment is to pump investments into the project.
We signed several contracts with the African Consultant Office, Crystal Lagoons for construction of the lagoons, and Maher Stino for landscaping, and of course, Sisco.
We signed these contracts to insure good quality for our clients. We will initially invest EGP 325m, which is the cost of the first phase and part of the cost of the second phase.
Have you started construction yet?
We started mobilisation and choosing the lands on which the company will construct. We will start construction within one month.
Can you provide us with some details about the project?
The project has around 600 units, aside from the hotel of course, we are building on just 15% of the land. We have around eight or nine feddans of Crystal Lagoons. We have standalone villas, twin villas, townhouses, lagoons, and even penthouses with private pools on the roof and a view for the beach, called SkyVilla. Now we have two roads leading to White Bay and clients can reach us from Cairo in around two hours. The area was still unpopular then but now developers have started to notice it and we are seeing work done in Sidi Hinish.
What are the commercial areas in the project?
We have a clubhouse with a view over the lagoons. We will not disclose names at the moment but we can say that several restaurants and brand names will be announced upon launch of the project. On the sea, we have a smaller clubhouse and a restaurant. We also have a business centre as well as a fitness arena and a sports academy for those who need a regular training schedule.
Are you planning to rely on loans to finance phases of the project?
The construction sector in Egypt generally needs all elements to come together in order for it to succeed. One of these elements is banks so we will definitely rely on them at some point. We have started negotiations with some banks but nothing has been signed yet. Within five or six months, we will reach a profitable agreement with a bank.
What are the challenges facing you as a construction company?
We initially faced some challenges but that has recently started to change with the new direction of the government and the new construction legislation.
The most prominent issue has always been the finalisation of documents and licences for building, which results in notable delays in implementation and delivery. We needed this to change. The government is currently working on allowing the developer to receive the land with a licence for construction. Sometimes you receive the land but could wait for months, or even years, to receive the licence to build. If you do not have a problem with the ownership and are ready to invest, you should not face problems in obtaining the licence to construct. If there is a specific time frame with exact demands then the process can be done faster.
The second problem was the availability of land and now prices have gone up too. However, the formation of agreements between the public and private sectors are taking a new direction. The ministry and developers are starting to form partnerships and this initiative will solve a huge problem for developers.