Al Ahly for Real Estate Development (Sabbour) managed to achieve EGP 5bn in sales at the end of October, compared to target sales of EGP 7.5bn by end of 2018.
Over the course of 30 years, the company has successfully developed 57 projects in diverse fields, including residential, retail, office buildings, tourist, and social and sports clubs across Egypt on total area of 12m sqm, Managing Director of Al Ahly, Ahmed Sabbour, said in an interview with Daily News Egypt, the transcript for which is below, lightly edited for clarity:
How much is the value of RIDGE’s investment?
The RIDGE project was launched with a total investment of EGP 2.5bn. It is the second residential compound following Alaire, to be developed within Odyssia’s project, implemented by the company in El Mostakbal City, East Cairo. The project, built on an area of 220 feddans (1m sqm), included 1,400 units ranging from villas, townhouses, and twin houses, with an approximate built-up area of 400,000 sqm. The delivery of the project’s first phase is projected in 2023. The first phase was planned in different spaces with targeted sales of EGP 3bn. Al Ahly aims to achieve EGP 2bn in sales within two months.
When will the company complete the project’s marketing?
Marketing of the first phase will be completed by the beginning of 2019, while marketing of the whole project will be concluded by 2020. Odyssia was built on an area of 578 feddan in El Mostakbal city, close to New Cairo, with a total investment of EGP 32bn. It will provide about 15,000 jobs, and sales of EGP 2.3bn, only in the first phase.
What are the total sales of Al Ahly in the third quarter of 2018?
The company has achieved EGP 5bn in sales at the end of October, compared to target sales of EGP 7.5bn by end of the year, driven by new offerings and high demand.
Can you tell us more details about the company’s new project in West Cairo?
We are currently preparing designs of a new project in the Sixth of October City, on an area of 144 feddan, obtained by the company in a land offering by the New Urban Communities Authority (NUCA), after a competition with two big real estate developers. The company intends to launch there an integrated residential project that includes villas, townhouses, and twin houses. The project’s plan will be officially announced next year, and we will begin construction work before the end of 2019.
Have you obtained the ministerial approval for the project?
No, we are still awaiting the ministerial approval.
What of the developments of Green Square project?
The company has completed 45% of the construction works of Green Square project in El Mostakbal City. We plan to finish 70% of the project by the end of the year, and deliver the whole project by the end of 2020. We have succeeded in marketing 75% of the project’s units, and aim to market 90% before the end of the year. The project includes 1,027 units with construction costs of EGP 1bn.
Speaking of the company’s projects in El Mostakbal city, what are the developments of L’Avenir?
About 25% of the L’Avenir project has been implemented, with plans to execute 50% by the end of the year. We have marketed 90% of the project. Its construction costs reached EGP 1.8bn.
What about Gaia North Coast?
We launched the first phase of Gaia in the North Coast on an area of 285 feddan. The company has completed the project’s designs, and currently we are awaiting construction permits. We expect to start construction next year, at a total cost of EGP 5bn. The project’s sales reached approximately EGP 1.25bn in only one month.
Are you planning to apply for the first investment offering in New Alamein and New Mansoura cities?
We will buy the booklet of conditions of the new offering for a total of five plots of lands in both areas. We will study the conditions and see whether to apply or not. However, we have a great interest in acquiring lands in these cities to diversify our land bank, as we want to launch new projects in Nile Delta and Upper Egypt. The company is currently negotiating with the Minya governorate to obtain a piece of land for developing an integrated residential project.
Does the company plan to launch projects in New Administrative Capital?
We are interested in investing in the New Administrative Capital for its national and investment importance, distinguished location, and high demand. We will consider investment opportunities there next year.
What are the opportunities and challenges of Egypt’s real estate sector?
The speed of granting ministerial approvals for real estate projects compared to previous times is one of the important achievements which contributed to boosting investment and speeding up construction. One of the main challenges facing the real estate market currently is the presence of non-professional companies which threatens the field. These companies do not have a strong technical or financial solvency to face the challenges and market fluctuations. The government is also trading, not offering lands for development purpose, since they are means of development, not a commodity to be traded.
Do you think the real estate sector is facing a deceleration?
The market has witnessed a relative downturn during the last period, but it will be temporary until the rebalance of the purchasing power of target customers returns as regards to housing prices. This places the spotlight on the mortgage finance law for reconsideration, in order to activate its items so as to increase the amount of sales in the real estate market.