Palm Hills Developments (PHD), Egypt's second-largest publicly traded developer, said yesterday it was in talks to expand on a major deal with Abu Dhabi's Burooj Properties. PHD said it was discussing selling more properties to Burooj, which bought 425 units in a project just outside Cairo for 315 million Egyptian pounds. Yasseen Mansour, PHD's chief executive, told Credit Suisse no agreementhad been finalised and that PHD was looking at deals with other companies in the region. But PHD was still in negotiations to expand on the deal with Burooj, which is the property arm of Abu Dhabi Islamic Bank, said Ahmed Badr, a property analyst at Credit Suisse in Dubai. Shares of PHD yesterday fell 0.96 per cent to 5.18 pounds on the Egyptian Exchange - nearly 17 per cent below Credit Suisse's target price of 6.06 pounds.
PHD remains Credit Suisse's top property pick, according to a note sent yesterday to clients. "They are expanding their target market," Mr Badr said of PHD. "They are targeting Egyptians who are living here [in the UAE], who can get mortgage finance deals from here at much lower rates." Mortgages in the UAE carry interest rates of about 7 per cent, compared with 12.5 per cent in Egypt. There are also no currency risks because Egyptian expatriates are typically paid in dirhams and would be making purchases in dirhams from PHD via an Abu Dhabi property company.
But Egyptian residents of the UAE are not the only targets for Egyptian property developers. Other Arab nationalities have also recently shown interest in or bought property in Egypt, Mr Badr said. Egypt's has been the best-performing property market in the region in recent times, he said. PHD this month reported second-quarter revenue of 332 million Egyptian pounds, up 37 per cent from the same period last year. Profit declined by 12 per cent in the period because of higher interest costs, larger tax provisions and increased minority interests.
halsayegh@thenational.ae
