Daily News Egypt sat down with Amr El Kady, CEO of City Edge Developments, to discuss the company’s development plans.
What are the projects the company is developing?
The company is developing two projects with total investments of EGP 5.5bn; a residential compound in Shiekh Zayed City, and a mixed-use project located 400 meters away from the first one.
Etapa, our flagship project, is an integrated smart residential compound that allocates 86% of its area for greenery and open spaces, while the remaining 14% is dedicated to the establishment of 493 units. The project is located on an area of 77 acres, with total initial investment of approximately EGP 2bn, provided by self-financing with the value of the land fully paid. The first phase of the project was launched last month achieved EGP 250m in sales, this phase represents about 10% of the project’s total number of units. The company also plans to launch the second phase next month, which represents another 10% of the project’s units and other phases throughout the year according to the construction and sales rates.
We started the earth works at Etapa after obtaining the ministerial approval for the project. Moreover, the mixed-use project licenses are currently in progress and we expect to obtain it very soon especially in light of the facilitations offered by the Ministry of Housing for the real estate developers to support the development movement and real estate investment.
The second project is a mixed-use development covering 14 acres with total investments of EGP 3.5bn, offering a range of commercial buildings along with medical, entertainment, as well as hospitality. The commercial part will be offered for rent to maintain and control the quality and activities of the project, while the medical and administrative parts of the project will be offered for sale.
What is the value of investment that will be allocated in 2018?
We plan to inject investments of EGP 1bn in both projects during the current year, especially with the company’s plan to accelerate construction rates. City Edge aims to achieve contractual sales of EGP 1bn in Etapa project by the end of 2018. In addition, the company plans to expand its participation in regional and international exhibitions to market both projects.
What are the company’s expansion plans?
The company plans to launch a new project in the North Coast next summer, in order to diversify its investment portfolio, and we will announce its details when it is launched, which will be a first of its kind.
The company’s vision is to ultimately be the national brand for premium real estate developments in Egypt, based on an ambitious expansion strategy capitalizing on its shareholder operational, financial resources and administrative structure capable of implementing that ambitious plan.
How do you see the competition between real estate developers?
There is a great competition in the real estate market in general and in Sixth of October city in particular, especially with the emergence of a range of projects with a high level of distinction recently. In addition, companies are providing different mechanisms of paying instalments that are attractive to clients, which leaves the client to be the main factor in this competition.
Moreover, target clients will be divided on all real estate companies operating in the market, especially with multiple options available to them, which is in the interest of clients, who are able to choose from many available choices. Therefore we aspire to set trends through the products we present to the market and achieve a satisfying customer experience.
How do you promote your export real estate strategy?
The export of real estate properties should primarily target non-Egyptian clients in order to obtain foreign currency to support the local economy. In addition, studies show that there are several nationalities that prefer to buy properties outside their home countries, which encourages real estate investors to compete in providing products appropriate for exporting.
What are the most promising areas for investing in real estate?
The new cities in general are the most promising; such as New Mansoura and New Alamein, as well as Upper Egypt’s new cities. These areas also include potential clients with high purchasing power according to studies and market research; also, previous experiences of developers in these areas support this trend.
Given its expansion plan, will the company resort to taking loans from banks?
All financing choices are available to the company as needed, and it seeks to create a strong management structure capable of achieving the ambitious expansion plan of the company. City Edge Developments is a partnership between the New Urban Communities Authority (NUCA) owning 60%, the Housing and Development Bank (HDB) with 38%, and the Holding Company for Investment & Development with 2%, with a total capital of EGP 1.3bn. Through providing the best in class standards, the company’s vision is to ultimately be the national brand for premium real estate developments in Egypt.
What are the international real estate exhibitions that the company will participate in?
The company plans to participate in the Egyptian Property Show in Dubai in April, targeting Egyptian expatriates there, in addition to GCC clients who want to acquire units in Egypt. Furthermore, granting accommodation for foreigners who purchase property in Egypt is the most important mechanism supporting that trend. Nevertheless, the presence of the NUCA in the company’s structure gives us great confidence both in the domestic and foreign markets.
What is your opinion regarding price increase in the market in 2018?
The market has experienced price increases of 30% since the floatation of the Egyptian pound, which does not represent the full increase in the cost of construction, as developers have endured part of the increase through offering payment periods up to 10 years in addition to lowering down-payments, which sometimes reach 0%, despite the price increases. This year I expect a reasonable increase in prices ranges between 15 – 20% if construction materials remain controllable.