SODIC, one of Egypt's biggest property developers, is planning to target Egyptian expatriates living in the UAE as it pools new customers for projects at home. The company, which has about US$6 billion (Dh22.03bn) worth of developments under way, may also establish a unit in the country, said Ashraf Farid, the director of operations. "We are now looking into, slowly but surely, getting our foot in the UAE in terms of sales," he said.
"We believe there's a huge demand for our projects in Egypt and we believe that the Egyptian expatriate population living in the UAE were not really affected by the financial crisis when it comes to property speculation in the UAE. Most of them are looking into transferring their money back into Egypt. So that's a good market for us." SODIC moved into Syria in June when it bought a 50 per cent stake in the Palmyra Real Estate Development Company of Damascus for $40.5 million.
House prices in Egypt started to rise again in the first quarter of this year after falling by up to 37 per cent in some areas last year, according to the Global Property Guide. Projects such as SODIC's Allegria, a high-end residential community, are springing up across Cairo, prompted by demand from affluent Egyptian buyers. Egypt's rapidly growing population and its shortage of housing has also encouraged investors from the Gulf to seek opportunities in the country.
Mr Farid said SODIC had been approached by a number of Gulf investors interested in developing projects as part of its Westown and Eastown developments on the outskirts of Cairo. SODIC is building the townships in partnership with Lebanon's Solidere. "Major companies are thinking of coming and building their own projects through us," he said. "They will choose their piece of land and will buy the building rights, so we would recognise revenues through that."
Egypt's government is also encouraging developers to build commercial, retail and residential property in areas outside of Cairo as it serves demand from a population of about 80 million. "There is a huge potential demand in Egypt, with the population and very low supply," said Mr Farid. Meanwhile, Egyptian developers are expected to outperform their Middle East counterparts this year as they tap into pent-up demand following a subdued year last year, Credit Suisse said in a report in June.
SODIC expects to earn $700m in the next three years as it completes projects, with most of the revenue coming from the delivery of between 800 and 900 homes at Allegria over the next year. "We're adapting our accounting method to only recognise revenues once we have delivered," said Mr Farid. Meanwhile, Dubai's Emaar Properties has also benefited from its investments in Egypt with revenue expected to be generated from the delivery of homes at projects including Uptown Cairo and Marassi over the next few months. Emaar established its Egyptian subsidiary, Emaar Misr, in 2005.
On the retail side, Al Futtaim Commercial and Administrative Centres, a subsidiary of Dubai's Al Futtaim Group, is building Cairo Festival City, a mixed-used community similar to the company's sprawling Dubai Festival City development. Gulf construction companies including Arabtec Holding are also seeking contracts in Egypt as they expand to foreign markets. Mr Farid said a number of contractors from Saudi Arabia and the UAE had discussed upcoming deals with SODIC, although he declined to name them.
"Once we have something confirmed, it will be announced," he said.
