PACT Real Estate is currently working on completing the first phase in the development of its first project White Bay, which will be worth an estimated EGP 1.7bn in total. The project is divided into four phases and provides a total of 600 units surrounded by green spaces and open areas, representing about 85% of the total size of White Bay. The first phase is set to be delivered by summer 2018.
PACT has entered into key partnerships with leading companies Cisco, Crystal Lagoons, and Multiples Group to provide state of the art technologies and facilities for White Bay, which is located in the Sidi Heneish area on the North Coast.
The project’s units are designed by Wessam Architects and are focused around the concept of smart homes. PACT has partnered with Cisco to implement the smart homes idea and support it with various other technological solutions.
PACT is also working closely with Multiples Group on the funding of its project. According to an agreement between the two, Multiples Group will be contracting and financing phase 1 and part of phase 2 in White Bay with an estimated EGP 325m through its contracting arm ASASS Real Estate Development.
The real estate company has also teamed up with Crystal Lagoons to reinvent the iconic destination by bringing their state of the art technology to develop man-made lagoons with crystal clear waters. The lagoon, which will cover 14,000 sqm, will feature sandy beaches and crystal clear blue water by using the latest technology under an investment valued at EGP 50m.
Daily News Egypt sat down with Moaaz Wessam, managing director at PACT Real Estate, to discuss the project’s development and important issues that are affecting the company and real estate market.
What is the latest update on the White Bay project?
We are currently continuing the construction work that is part of the first phase. We have offered the second phase of the project up for marketing ahead the Cityscape conference, which will be held in September. The second phase consists of 125 units and construction work is expected to start during the final quarter of 2016.
The third and fourth phases, which consist of 400 units, will be delivered after three years. Sales for the third phase will be launched next year and will contain 200 units. The fourth phase also contains 200 units with a hotel. The total cost of the two phases represents 60% of the total project’s cost, which amounts to EGP 1bn.
Has PACT selected the company that will manage the hotel?
Not yet. We have delayed making this selection because we are still in the process of choosing the hotel’s location. The hotel will be a 4-star hotel, but we may plan to develop it to meet 5-star standards and this will be determined based on its location.
How much money is needed for investing in the hotel’s construction?
The company has allocated EGP 300m as the investment cost of the hotel.
What is the value of the construction contract that was signed this year?
We signed construction contracts worth EGP 320m.
What services do PACT offer that sets it apart from other companies and makes it unique?
We put a lot of effort into seeking sustainable architects and buildings. If a building can last longer without maintenance then we could consider it sustainable. We want to extend the period between delivering units to customers and maintenance. The company is studying nanotechnology in real estate through partnerships to find companies that provide services that would maintain the quality of paint and furniture for longer period of time.
What is the total amount of investments secured for the current year?
Aside from the construction contract, we have secured about 5% to 7% of sales on units worth a total of EGP 30m.
What price increases has the company experienced due to the devaluation of the Egyptian pound against the US dollar?
For the first phase, we had to put a halt to some sales at the end of 2015 after the US dollar increased in value against the Egyptian pound. We had to instil a price increase of 15% to cover the actual increase during the second phase.
What is your opinion of strategic partnerships between companies to develop projects?
Engagement in strategic partnerships allows us to offer the best services and to add value to the product. The services under which we seek to be involved in partnerships with other companies our company can provide by itself. However, we want to seek out the highest qualified and specialised companies to take advantage of their experience through the company’s investments.
The company increased the company’s investment needs from EGP 650m to EGP 1bn. Is this amount expected to change again?
The cost of the project will be fixed at EGP 1bn.
When will the first phase be delivered?
The first phase is expected to be delivered in 2018.
Some companies depend on marketing the entertainment and service concepts of their projects before the residential concept to attract more clients. Has your company taken the same approach?
We mainly rely on our location on the sea for marketing. Our main priority in marketing is the sea and making use of our distinctive location in Sidi Heneish on the North Coast.
What facilities are you currently working on developing in the project?
The project’s services related to water are now all connected and we are almost finished with the electricity connection.
The company increased its prices by 15% due to the change in the currency exchange rate. As the currency exchange rate continues to change, particularly in recent months, do you expect the company will increase prices again?
We respect the increase in prices in the market; however, we do not expect to make a significant increase, as this would be unattractive for our clients.
Will the company launch new projects in the coming period or just focus on the current project?
There are a lot of opportunities and we are always studying these opportunities. White Bay is our first project and depending on the success of delivering on the first phase I think we will be able to think of new projects and opportunities soon.
What is the size and value of the company’s land bank?
Our current land bank is 70 acres. We will target increasing our land bank value to 100 acres in the North Coast once we have delivered on the first phase of the project. The increase has an expected value of approximately EGP 700m.
What is your expectation for the price increases in the real estate market?
I expect an increase of 15% to 20% by the end of the current year compared to last year.