Daily News Egypt interviewed CEO of Samcrete Development Hisham El-Kheshen about the country’s ongoing projects, including their flagship project Pyramids Heights Business Park, the first business park in Egypt.
What are the company’s ongoing and completed projects? What is the size of its current investments in Egypt?
Samcrete Development’s flagship project Pyramids Heights Business Park—the first business park in Egypt—offers a diverse selection of office space in west Cairo, abiding to corporate international standards and a modern work environment. The business park currently serves around 12 corporations from prominent market practitioners. Designed to accommodate all business types and needs, the Business Park was designed by award-winning Perkins & Will, utilising a harmonious design focused on ergonomics and functionality.
Following the success of Samcrete Business Park, the company decided to launch its first residential project, Pyramids Heights Residences. The project creates a fully integrated gated community in west Cairo. We made sure to collaborate with some of the world’s most refined consultants, offering around 600 units with diversified designs and unique architecture styles.
Our current size of investments in Egypt is around EGP 2bn.
What is the size of the company’s land bank?
Samcrete Development’s land bank is comprised of around 2m sqm.
The Pyramids Heights Residences project is set in a very premium location of an approximate land area of 400,000 sqm, offering easy access to the city, where many of the units are overlooking the Giza Pyramids.
Does the company intend to increase its land bank?
We intend to extend its heritage, sector’s expertise, and strong calibre capabilities in providing state-of-the-art and premium architectural designs. Our expansion plan currently includes west Cairo and east Cairo, as well as the North Coast.
How much revenue did the company accrue in the first half of 2016?
Considering Pyramids Heights Residences, residential sales are approximately EGP 800m. As for the business park, our business rentals reached around EGP 45m during the first six months of the current year.
What are the total investments injected in the Pyramids Heights project? What is the price per metre in the project?
Pyramids Heights’ total investment is calculated at around EGP 1.2bn. We consistently conduct extensive market research to be acquainted with the key sector’s moves and unit pricing to make sure to provide the market with premium designs at the most convenient prices.
As for our price per metre, we are very keen to add value to our customers through providing designs that exceed their expectations and practically meet their needs.
What are the expected sales and revenues after completing the project?
The expected revenue after completing Pyramids Heights Residences is around EGP 2bn.
When will the project be delivered and what are the services provided inside the project?
The project’s first phase is expected to be delivered by the first quarter of 2020.
The units’ owners will be granted a number of facilities to serve their needs and help them maintain a healthy modern and comfortable life. The project facilities include a clubhouse, sports club, and themed community pavilions.
Are there any updates regarding the central park project in Sheikh Zayed?
This project is contracted to our sister company Samcrete Contractors. Samcrete Holding Company is really proud of this project, and we do believe that it will add great value to Sheikh Zayed residents and will introduce a new concept for families to enjoy an open space experience widely lived internationally.
What is your opinion regarding the high prices for lands offered by the New Urban Communities Authority (NUCA) and the lack of facilitated lands offered by the government?
The new approach of partnership with developers resolves the issue and the government is planning to issue a much diversified portfolio of land.
What is your opinion regarding investment in the real estate sector in Egypt?
The real estate sector still remains a safe haven. The sector is mainly driven by the increased demand of Egypt’s rapidly growing population. A significant number of Egyptians perceive the domestic housing market as a preferred destination to park their savings.
We think the sector is currently flourishing and in the short–term, it will see a price adjustment that will make it healthier.
What is your opinion regarding the US dollar shortage in the Egyptian market? Does this affect the company’s business in Egypt?
It does affect—positively and negatively. Positively, it increases sales as it confirms real estate as a safe haven and investment vehicle. Negatively, the cost side is becoming very unstable and unpredictable.
How does the company handle the issue of the US dollar shortage?
We try to do early procurement for US dollar sensitive material. On the other hand, we believe it is a crisis and we will work to overcome such a challenge.
Will the application of the value-added tax (VAT) affect the company’s business or sales?
Nothing is clear yet. The VAT will be applied by this year’s end. Let’s wait and see. However, for the time-being, we believe it will have an impact on the cost side.
Does the devaluation of the Egyptian pound benefit the company’s business?
We always look at the bright side of any scenario. We think there will be a certain period of uncertainty that will affect the business but that will hopefully be followed by market adjustments.
What is Samcrete’s expansion plan in the Egyptian market?
We see a very good opportunity in east Cairo and the North Coast of Egypt. Accordingly, we plan to have our next projects there.
Will the company inject new investments in the real estate market?
We will definitely continue to create more projects. As mentioned earlier, we find the real estate sector one of the most stable sectors in Egypt, and one that is experiencing growth. Expanding our project’s portfolio will enable us to increase our revenues year after year, while empowering the overall construction sector through unique and comfortable designs.
What is the rate of price increases the company had to apply after the US dollar appreciation?
We added about 5% to 10% to selling prices.
Can we expect new partnerships between Samcrete and other companies?
We always welcome any new dedicated associates who will definitely have an added value to all the good work we do. However, we don’t have any approved partnerships that we can report for the time-being.
Did the company request to develop land in the New Administrative Capital?
We are still studying the project to perfectly assess all pros and cons.