Since its establishment in 1975, Saudi Egyptian Developers (SED) has presented leading real estate projects for the Egyptian market.
SED is an Egyptian joint-stock company equally owned by the Saudi and Egyptian governments, with a capital of EGP 1.9bn.
Daily News Egypt interviewed Mohamed El-Taher, CEO of SED, to learn about the company’s latest developments and plans, on the occasion of its participation in the Cityscape 2021 exhibition, scheduled for 22-25 September.
What is the size of the company’s investments in the real estate sector?
The company’s total investments in its under-construction projects amount to about EGP 19bn.
What is the size of the company’s sales in the first eight month in 2021? What is your sales target during the year?
The company succeeded in increasing its sales volume during 2020 by 310% to reach EGP 5.6bn. We managed to increase our sales during the first quarter of 2021 by 275% compared to the same period in 2020 to reach EGP 1bn, compared to EGP 363m in Q1 2020. We also achieved a great leap in the sales of the Latin Quarter New Alamein, which amounted to approximately EGP 1.2bn in the first 10 days only from opening the reservation.
What is the size of each project’s investments, total area, and units?
The Saudi Egyptian Development Company has implemented more than 45 different real estate projects nationwide, through a long history spanning 47 years.
Bleu Vert is one of the major projects that the Saudi Egyptian Construction Company is very interested in, as it is distinguished by its unique location in the heart of the New Administrative Capital on the Mohammed bin Zayed axis, on an area of 70 feddan, 294,000 sqm and is implemented with a total investment of up to EGP 4bn.
The project includes 2,000 housing units between villas and buildings with a ground floor and 7 duplicate floors, with areas ranging between 70 and 200 sqm. The project also includes a social club, green spaces, a commercial centre, and other services and facilities. The project is implemented over three stages, with a sales target of EGP 6bn, and it is scheduled to be fully completed by 2023. The company has so far succeeded in selling a large percentage of the first two stages.
IL-Latini or the Latin Quarter is located in the southern region of New Alamein, near the universities area, the cinema and theatre complex, and the city of heritage and culture. The company achieved sales of EGP 1.2bn in the first 10 days of the reservation window. It is targeted to deliver the first phase of it in 2022.
The Latin Quarter is surrounded by main roads. It overlooks the new Lake El Alamein. All the buildings are fully finished in a way that suits housing throughout the year.
Hilton Nile Towers is one of the company’s mega projects. It consists of two towers directly overlooking the Nile, one of them is a luxury residential building and the other is a 5-star hotel managed by Hilton International. It is built on an area of 45,500 sqm in Maadi district. The residential tower comprises 190 units. The hotel tower comprises 256 rooms, in addition to restaurants and entertainment halls, with an investment cost of EGP 3.8bn. The project is scheduled to be delivered in Q1 of 2022.
Jade is an integrated mixed-use residential community, located on an area of 68 feddan (286,000 sqm), in the Fifth Settlement, next to Al-Rehab City, New Cairo. It features all the services necessary for a quiet, high-end life. About 72% of the project’s construction phase has been completed.
Sawari is the first and largest integrated urban community in Alexandria. It is built on an area of 417 feddan, in a strategic location next to Carrefour City Center Alexandria. So far the first and second phases of the project have been launched on an area of 455,000 sqm, and they include 64 residential buildings and 310 villas of different construction styles (standalone, twin, and townhouses). The project included a commercial centre, a social club, and a hospital, in addition to green spaces. The company achieved sales in its project estimated at EGP 6.5bn. It was also indicated here that the sales numbers are constantly increasing thanks to the marketing plans provided by the company to its customers.
The SECON Resort is a tourist residential compound that overlooks the sea in New Damietta. It includes a 5-star hotel managed by Hilton International, and is built on an area of 17.7 feddan, and consists of 192 housing units of different types. It also includes a 110-room hotel managed by Hilton Worldwide, with total investments in residential units of EGP 350m, and total investments in the hotel amounting to EGP 200m, and the project is scheduled to be completed by 2024.
Durrat Assiut is a residential compound in New Assiut city, located on an area of 11.3 feddan, and consists of 460 apartments, and includes all services and facilities that guarantee all factors of luxury and quiet life, (green spaces, shops, nursery, and other services and utilities), with a total investment of EGP 300m. It is scheduled to be completed by 2023.
We are also working on the Zahret Assiut project, which is a group of distinguished residential towers directly on the Nile River in Assiut Governorate. It is built on an area of 5.71 feddan, and consists of 575 apartments, with a total investment of EGP 450m, and is scheduled to be completed in 2024. It includes all services, facilities and entertainment amenities such as green spaces, shops, and other services and facilities.
What is the target volume to be injected into construction during 2021?
The company is working on the construction of 6 projects comprising 5,000 housing units
What is the size of the company’s land portfolio? Do you intend to increase it?
SED manages a diversified land portfolio of 417 feddan in the most prestigious strategic locations in various governorates, and its projects are divided between residential towers, tourist villages, hotel towers, and integrated urban communities. Of course, we seek to increase our land portfolio
How much did you pay to the Administrative Capital for Urban Development (ACUD) for the land?
We paid 70% of the land price to ACUD.
Did the company raise its unit prices? Do you intend to raise it again during the second half with the opening of the administrative capital?
We are committed to the terms of the contract that we conclude with our customers, whether in prices, delivery schedules or anything else stipulated.
What is the company’s expansion plan? Do you intend to acquire new lands or launch a new project during the coming period?
We always study our expansion steps and the available investment opportunities with the greatest accuracy based on scientific approaches and specialized market studies, and we announce them after the studies are completed and the actual start of the executive steps, and as I told you of course we seek to increase our land portfolio.
Is the company going to launch coastal projects?
SED was the first to decide and open the door for real estate investment outside Cairo in the various governorates of Egypt, such as offering tourist villages such as the Qasr Morsi Matrouh village project, the Rommel Morsi Matrouh village project, and the Hanovil village project in Ajami.
What do you think about the movement of sales in the real estate market during the last period?
The coronavirus pandemic certainly affected the whole world, and of course, the real estate market in Egypt was affected and witnessed a period of instability, slowdown and decline in sales, which appeared strongly during the height of the pandemic last year, and during 2021 the market also witnessed different cases, but it is certainly better off than 2020.
But despite all that, we succeeded, the process of renewal and the great structural development that occurred in the company and the large cadres and experiences working with us in increasing the sales volume during 2020 by 310%, despite the pandemic.
What is the impact of the Administrative Capital on the real estate market?
This will certainly cause a boom and a strong movement in the real estate market in general.
Will it attract more developers and customers?
The New Administrative Capital is a giant project that has never been seen before in the history of Egypt, but rather the region in terms of space, implementation, vision, infrastructure, and the great interest the state pays to it, and all of these factors help and push the process of attracting investors.
Does the commercial and administrative product still have the largest share of sales in the real estate market?
All real estate products residential, commercial, administrative, and touristic have their customers, some products may outperform others at times, and the market may go in certain directions for periods and then change the situation afterwards, but the real estate product remains the safe investment in every form throughout the ages
Will fierce competition push developers to provide more facilities?
Of course, whenever there is competition between real estate development companies, the customer is the first beneficiary in all aspects, whether in terms of facilities or product quality.
What do you think about the tendency of some companies to extremely reduce prices?
This is an issue governed by very many factors, discounts have seasons and occasions known to all, and even if the price is reduced outside these seasons and occasions, it should be reasonable.
When do companies turn to bank borrowing?
Based on the marketing and financial feasibility studies prepared for the project, the financing deficit during the construction period is covered by bank loans after obtaining all approvals from the concerned authorities.