Al-Ahly Real Estate Development Company plans to achieve contractual sales of EGP 3.5bn and invest EGP 2.5bn in its projects during the current year, according to Ahmed Sabbour, the managing director of Al Ahly for Real Estate Development.
Sabbour said that this amount of investment is driven by market strength and participation in local and foreign exhibitions.
Sabbour told Daily News Egypt that the total volume of the company’s land bank is about 5 million sqm the company hasn’t develop yet. In addition to, a million sqm under development.
He pointed out that his company aims to diversify its portfolio of investments and move to the Delta and the Upper Egypt, especially in areas where market studies prove the high volume of purchasing power, but the company is still in the search for land that represents promising investment opportunities in these areas.
On offering part of the company’s shares on the Egyptian Stock Exchange(EGX), Sabbour said that this step is still in the study phase, which has several advantages of the company. The most important; providing greater liquidity enabling the company to achieve its expansion plan during the coming period, and contribute to improving the level of management of the company, which will lead to maximize company’s investments and its role in the local market, in addition to providing liquidity to shareholders.
“The company is still in the study phase for all forms of offering by the New Urban Communities Authority, although the company’s possibilities are more oriented to the axis of partnership, especially with the preference of the company for this system because of its role in directing liquidity for the project instead of paying the value of the land, Sabbour said.” Al-Ahly Company focuses on acquiring lands, which are offered in East and West Cairo.
He added that the Central Bank of Egypt’s decision to raise the interest rate on lending twice a year to reach about 16% from 9% affects the real estate sector by raising the cost of implementation—in case of borrowing— in addition to withdrawing part of the clients’ investment in the real estate market for banks. However, the profits on the property is still higher compared to bank deposits, pointing out that this effect soon fades away with the benefits of economic reform that is currently taking place.
He noted that the trend to export the local property abroad [buying property to foreigners and expats] needs to be further regulated and intensify efforts to organize and participate in real estate exhibitions abroad, especially in the Gulf countries, in order to benefit from the currency devaluation after the flotation of foreign exchange and benefit from the wishes of many Egyptian citizens to own units in their country.
The total number of residential projects (compounds) carried out by the company since its establishment amounted to 57, including more than 26,000 units, with an issued capital of EGP 1bn and paid capital of EGP 300m, according to Sabbour.
He stressed that the “current economic and political improvement supports the company’s trend to expand in local market.”