The National Bank of Egypt (NBE) has signed a financing contract worth EGP 1bn with the Palm Hills Development Company, using the receipts resulting from the sale of the company’s delivered “Ready to Move” units.
NBE Vice Chairperson Yehia Aboul Fotouh said that the contract comes in light of the bank’s keenness to finance major projects in general. The bank is particularly focusing its financing activities on the real estate field, due to this sector’s ability to preserve its medium- and long-term investment value.
Aboul Fotouh added that real estate is an important engine of economic growth, because it is linked, both directly and indirectly, to a large group of industries and activities that create job opportunities. These include the iron, cement, ceramics, wood, sanitary ware and electrical appliances sectors, which practically serve development plans.
He pointed out that the state is directing huge investments in this vital sector, in an effort to expand into integrated residential communities that include the various needs of their residents.
Meanwhile, Ali Thabet, a board member for financial affairs at Palm Hills, said the agreement with the NBE will enable the company to market and sell ready-to-move units available at its various projects. He noted that these are a unique product in the Egyptian real estate market, with the company’s customers able to access payment facilities of up to 10 years.
The securitisation of these units’ receivables come in accordance with the securitisation programme prepared in advance by the company.
“In this context, we confirm the company’s commitment to reach the target net debt of EGP 1.5bn by the end of the year,” he added.
Sherif Riyad, head of the NBE’s Corporate Banking Credit Group, explained that Egypt’s real estate investment market has witnessed a remarkable transformation in recent years. This, in turn, has been reflected in customers’ consumption patterns, supply and demand movements and market balances.
He pointed to the strong competition between real estate companies to develop their projects, in line with customer aspirations. Work has been particularly significant at residential projects and complexes located in Egypt’s new regions and cities, such as New Cairo and 6th of October City. These come as part of efforts to reduce internal congestion in Cairo proper, which has encouraged the bank to continuously finance real estate projects.