The coronavirus (COVID-19) outbreak has put a hold on DM Developments’ expansion plan, according to Managing Director Ahmed Abdel Hamid.
Abdel Hamid told Daily News Egypt that the coronavirus crisis will have an impact on the company’s expansion plans, postponing the new project’s launch by six months. The project had been scheduled for launch during the first quarter (1Q) of 2021, but will now be postponed to the second half (2H) of the same year. The company will, however, continue selling the third phase of The Groove project in Ain Sokhna, which was launched early this year.
He added that his company has not laid off employees as a result of the coronavirus outbreak, and has took all precautionary and awareness-raising measures to combat the virus. The company has been providing awareness programmes for office and on-site workers, in addition to spreading a culture of public hygiene.
Abdel Hamid also said that the traditional channels of dealing with customers would now be replaced with online channels. This comes in addition to regular temperature checks on visitors and taking hygiene procedures before entering the company’s headquarters or The Groove project site. There is also an isolation room for any suspected coronavirus cases at all the company’s sites.
“The property sales volume is expected to be affected in 2Q and 3Q 2020, due to current precautionary procedures taken by the government,” Abdel Hamid said. “However, I believe that this limited period will be followed by a large boom in the volume of sales in the 4Q.”
Abdel Hamid added, “All the crises that occurred globally, followed by a global trend towards safe investment vessels, namely real estate and gold, because of low risk proportions, moreover, property will remain the safe store of value, and this will happen after the end of Coronavirus crisis.”
Egypt’s property exports will recover by the end of the Q3, with the decision to postponement purchases likely to lead to an accumulation of demand following the coronavirus crisis. On top of the strong demand for real estate in Egypt, these will result in good sales.
In light of this, the company is targeting sales worth EGP 1bn by the end of 2020, with a deviation in the plan not exceeding 10% of total sales, Abdel Hamid said.
The Central Bank of Egypt’s (CBE) decision to slash interest rates will allow real estate companies to obtain lower interest loans compared to the previous period, leading to an expansion in their business. Additionally, companies that have suspended work during the ongoing pandemic will return to work and complete their projects. This will, in turn, encourage customers to borrow from banks to buy property, Abdel Hamid said.
DM has collaborated with Global Waste Water Solution, the Transworld Modern Services’ agent in Egypt, to carry out networks, utilities, and integrated infrastructure at The Groove Sohkna. The project, which is located in the El-Galala Plateau, will have investments worth EGP 200m in infrastructure.
Other projects on DM Development’s plate include implementing the Hilton International Hotel’s first phase, contracted at the end of 2019, worth a total investment of EGP 400m. The company will deliver the project’s first phase with investments worth approximately EGP 150m this year.
Abdel Hamid said, “We are committed to paying land instalments to the state which are to be paid on its scheduled dates. Likewise, we have a schedule for deliveries to customer, and we are committed to this programme so far, so there is no delay in customers’ instalments at the present time, because there are many obligations and contracts according to the changes that occur in the coming period. Therefore, there will be no postponement of instalments paid by the customers.”