Radix Development, a subsidiary of the Saudi Mwafaq Holding Group, plans to pump a total of EGP 5bn in new real estate projects in Egypt by the end of 2025, of which EGP 1.25bn will be injected by the end of 2022.
Akram Al-Sheikh, Executive Vice President of Radix Development, said that Radix is studying the development of an integrated urban project of 30 feddan in the R8 area in the New Administrative Capital, which will include residential villas and a commercial administrative tower on an area of 12,000 sqm.
He told Daily News Egypt that Radix also plans to develop two coastal projects in the cities of New Alamein and El-Galala, as part of its expansion plan in the real estate sector for 2022.
He explained that the company has sold about 60% of the total units of the Radix Agile project in the New Capital, achieving contractual sales of EGP 600m since the beginning of 2021, including 30% to customers in Bahrain and Saudi Arabia, as well as Egyptians working abroad.
Al-Sheikh said that the company targets EGP 1bn in sales during 2021, as it sold about 50% of the medical and administrative units, and 25% of the commercial units, and plans to keep the largest number of commercial units and put them up for rent instead of selling.
He added that the Radix Agile project is located on an area of 7,500 sqm in the Administrative Capital, with investments amounting to EGP 850m. The construction area of the project is 2,000 sqm.
He explained that the average price per sqm in administrative units is about EGP 24,000 and about EGP 30,000 per sqm in medical units, and the average price per sqm in commercial units on the ground floor is EGP 100,000.
He pointed out that the construction cost of the project amounts to about EGP 400m and the company aims to pump 50% of the construction value by the end of this year, and 100% of the construction value by the end of 2022.
He said that the company contracted with the IEC office to develop engineering designs and consultancy studies for the project, and assigned the construction work of the project to the contracting sector arm, Al-Salmaniyah Real Estate Development, one of the group’s companies in Egypt.
Al-Sheikh added that the company awaits a construction permit to start implementing the project, and the company has also set a timetable for implementation, not linked to sales.
He explained that Mwafaq Group owns several specialized companies, including a company in management, operation, and maintenance, which ensures that Radix achieves the best operational performance for the project, and thus achieves the best return on investment for clients.
He pointed out that the group has a precedent that extends for about 30 years in managing and operating commercial and administrative projects and integrated urban complexes in various locations in Bahrain and Saudi Arabia.
He said that the company’s presence in Egypt as a foreign investor contributed to its offering of products that comply with the desires and needs of Arab customers, as a result of its great experience in the Gulf markets, especially since the main management of Mwafaq Holding company in Saudi Arabia is the one who reviews designs according to the requirements of Arab customers, which contributes In increasing the volume of Egyptian real estate export abroad.
Al-Sheikh added that Radix is adopting a proposal under study, which aims to provide a guarantee on the property, similar to European countries.
He explained that the company is considering participating in a number of foreign real estate exhibitions during October and November 2021, including “This is Egypt” and “Smart Camp” in Dubai, UAE.
He pointed out that the initiatives put forward by the state in the real estate sector do not come into contact with the requirements of real estate developers, because they do not aim to finance under-construction units, as they are directed to social and medium housing, while developers target luxury housing, and commercial, administrative, and medical projects.
Al-Sheikh said that New Alamein is one of the sites that the company is studying to develop several projects in during the coming period, as it is a promising city, and is characterized by available investment sites, which makes it a priority for real estate investors.
He added that the Egyptian market boasts huge investment opportunities, and needs real estate companies with a large financial solvency to launch new projects, in light of the state’s directions to expand urban areas to 14% of the total area of Egypt, through launching about 37 new cities.
He said that the new administrative capital has enormous investment potential, in addition to the government guarantee for the project, and the provision of all modern technology and digital transformation in the city’s infrastructure, which makes it the focus of the world’s attention.
He added that Radix is focusing on the use of technology in its real estate projects, through the use of companies specialized in this sector.
He expected real estate prices to rise by 10-25% with the opening of the capital and the transfer of ministries and government agencies to it, according to the location and specifications of each project.
He pointed to the need to develop a specific mechanism to control pricing in the Egyptian market, when offering lands to developers, obligating the developer to sell the meter at an appropriate value for market prices, in order to ensure fair competition, provided that prices vary according to the features, services and quality provided by each developer.
He said that the Administrative Capital for Urban Development has a clear pricing mechanism for lands according to its various activities, and it can be applied to units according to the type of activity, heights, and each specification and loading percentages for the entire project, especially since most of these controls are stipulated in the conditions booklet, which facilitates the developers’ commitment to them.
He added that the real estate sector is reaping what it has done during the past years, as the markets witnessed a growth in sales during 2021, and many developers compensated their losses during the Coronavirus crisis in 2020, or the slowdown in sales during 2019.
Al-Sheikh explained that the Egyptian real estate market witnessed an equal movement of demand and supply from both sides, and that the market accommodated the launch of more new projects.
He pointed out that obligating developers to implement 30% of the project before selling and marketing, whether for existing projects or plans to be launched in the future, will guarantee the rights of customers and regulate the real estate market.
Al-Sheikh said that the state aims from the decision to have serious developers who are committed to the regulations of the real estate sector, and those who have financial solvency and experience that qualifies them to implement projects.
He added that the benefits of implementing the decision are more than its drawbacks, especially since setting controls for projects and their implementation stages is one of the greatest needs of developers in light of the momentum the market is witnessing and the slowdown in project implementation.
He explained that the slowdown in implementation rates will not lead to a slowdown in the sales movement, because the customer differed, and the law regulates the real estate development movement in Egypt, and the state sets regulatory rules in order to preserve the public interest and the rights of all parties to the system.
He pointed out that the company, before starting the implementation of its project, placed about 25% of the project implementation value as bank deposits, as part of its keenness to implement the project according to the specific time plans with the Administrative Capital Company, and to separate implementation from sales.
He said that the companies of Mwafaq Group, with its various specializations, aim to expand the volume of their business in the Egyptian market, including the implementation of contracting works for the benefit of others in the administrative capital and the governorates during the coming period, along with design and engineering consultancy companies, a landscaping company, and an agricultural business company.
Mwafaq Group has been operating in Saudi Arabia since 1965, with multiple investment sectors, including the building and construction sector, with investments amounting to SAR 6bn and it entered the local market in 2018.