Modern Company for Construction and Real Estate (MCR) is seeking an area of 110 feddans in the New Administrative Capital and applied for acquiring lands, according to Mohamed Abdel Mohsen, chairperson of MCR.
Abdel Mohsen told Daily News Egypt that MCR plans to pump EGP 1bn in the construction of its projects during the coming year, EGP 500m will be spent in 2018 and EGP 300m were spent in June.
Abdel Mohsen said that the company is studying a market for the development of 50 feddans in New Cairo and 140 feddans in the coast and is seeking land in the Administrative Capital.
He added that the company will hand over several projects in Shorouk City next year and it will launch new projects.
He pointed out that the company’s land bank is estimated at 520 feddans distributed between New Cairo, 6th October, Shorouk, and the North Coast and provides the company’s activity for 10 years.
He explained that the company is studying the market in preparation for the development of the Le Park project on 50 feddans in New Cairo with expected investment of EGP 1bn.
He said that the company develops 22 projects in Shorouk, besides, Le Park. It will be diversified between Mini Compound, separate buildings and villas. The company delivered 10 of them and the rest is in the construction phase and plans to be delivered next year with total investments of EGP 350m.
Le Park is built on 10 feddans and consists of 117 apartments and 50 villas. Furthermore, the company marketed 80% of it and is being developed on one phase and implemented 35% of the project’s construction works.
The project includes a solar power plant with a mega capacity and will be delivered in March 2018 with investments EGP 400m.
“The construction cost increased by about 35% since the liberalisation of the exchange rate of the pound, which led the company to inject new financial liquidity in the current year. The company is seeking to hire companies from several countries to supply products for finishing the units of Le Park,” Abdel Mohsen added. “The company depends on self-financing in carrying out its projects because of the lack of suitable financing alternatives in light of the high interest rates on loans, which represent a great burden on the project and the bureaucracy in access to bank financing.”
The chairman noted that the company’s assets reach EGP 2bn and the number of customers is 1300 and aims to reach 4,000 customers by 2018.
The company plans to launch the first phase of the Oasis Park project in 6th of October City within two months with investments EGP 1bn on 50 feddans and will be developed on three phases including the 20 feddans are allocated for commercial activities.
The company started processing in the carrying out of the first phase of the project, which includes 1,500 housing units.
He added that the company develops all its projects individually without a partnership for not receiving suitable partnership offers from developers and did not buy a condition booklet of the land recently offered by the Ministry of Housing.
Abdel Mohsen stressed the importance of major consortiums that include companies specialised in various complementary activities in development real estate sector.
He explained that the company is interested in marketing abroad in its plan in light of the high attractiveness of selling the Egyptian real estate externally after the liberalisation of the pound exchange rate and its devaluation against the dollar. The company seeks to achieve this through its branches in Saudi Arabia, UAE and Kuwait.
Selling the company’s units for expats represents 20% of its sales, according to Abdel Mohsen.
Abdel Mohsen said that the Ministry of Housing competes with companies through its new projects that target middle-income tranche through the projects of “Dar Misr” and “Sakan Misr”, but they maintain the balance in the market and the rate of raising prices so as not to be exposed to a real estate bubble.
“The market will be expected to revive during the coming period,” he stated. “The changes that have occurred in the market following the economic measures have resulted in the re-structuring of companies, including the exit of some of them and the entry of new ones. Small and medium enterprises were the most affected because they did not have sufficient liquidity and the land bank that secures them from the high cost after selling the units at low prices and they have to build according to new prices,” he concluded.