Aldawlia Developments plans to complete its project Regent’s Park Residence in New Cairo next year, with investments worth EGP 1.4bn. The company is spending EGP 250m on construction works this year, its general manager, Ahmed Elnesr, told Daily News Egypt.
The company recently celebrated the completion of the first phase of Regent’s Park and the delivery of its first units, with the participation of its customers, real estate developers, and celebrity artists.
What is the project’s details?
The Regent’s Park project includes 496 units with sizes that range between 100 sqm and 300 sqm and its units includes duplexes, studios, and apartments.
The company started implementing the project 18 months ago and implemented a large volume of work that exceeded 60% of the total construction.
What is the value of investments to be directed in the current year?
The company plans to direct EGP 250m into the project’s construction, of which the company has completed 60% within 18 months.
What are your sources of funding?
The company finances the project through the capital of the shareholders and the proceeds from sales, of down payments and installments, which represent 40% of the total cost. The remaining 60% of the cost is through bank financing.
What is the status of the project’s marketing?
The company has marketed 75% of the project, which includes a built-up area of only 20% while the rest of the area is dedicated to service activities, green spaces, corridors, and other services.
The company receives a 10% down payment for each unit’s value and the rest is being paid in instalments over six years. The project includes a club, a swimming pool, playgrounds and recreational areas for children, as well as a commercial part to serve the project’s residents.
Does the company plan to export real estate?
A limited percentage of units are marketed to customers outside Egypt, especially after the devaluation of the pound against the dollar. The company reaches customers through contracting with real estate brokers in some countries, along with advertisements via social media. Furthermore, the company participates in foreign exhibitions, the latest being a real estate exhibition in Dubai.
Do you plan to establish big commercial malls inside your projects?
We do not prefer to implement large service projects within our projects such as large commercial centres so as not to disturb owners and for those who prefer quiet, especially since New Cairo is characterised by the availability of services and their multiplicity.
What is the company’s expansion plan?
The company is preparing an expansion plan for the coming period, but it favours projects on medium-sized areas, which make possible their development in a short time and with the desired quality.
The company is studying the development of a project in the New Administrative Capital and another in the North Coast. The company is studying acquiring lads of areas between 40 and 50 feddans. We expect to make a decision during the coming period.
The company is studying investment opportunities in governorates other than Cairo and received offers to develop lands in the governorates of Fayoum and Assiut. The company is studying the development of these lands after conducting feasibility studies.
What are the other projects developed by the company?
The company has considerable experience in real estate activity and has developed a number of projects, including of commercial and residential activities, and is concentrated in New Cairo.
The company has developed 2.5m sqm of premium property in countries including Egypt, Sudan, and Yemen, as well as developed the Landmark Village project, besides several administrative buildings in New Cairo.
The company has completed the implementation of two administrative buildings in New Cairo on 90th Street, with leasable areas of 9,000 sqm per project.
The two buildings are leased to international companies and the company’s future plan guarantees the development of similar projects and is expected to represent 40% of the target investments compared to 60% for the integrated residential projects.
What kinds of clients do you attract?
A large percentage of buyers in the project are former clients of projects that the company has previously handed over, in addition to new customers. Our commitment to implementation and delivery times maintains the confidence of customers and aids the decision to purchase within our projects.
What is the value of the company’s capital?
The company’s capital is EGP 100m and its increase is subject to new expansions of the company and its financing needs.
Did the rain water crisis that flooded Fifth Settlement, New Cairo last month affect your sales?
The company took into account when implementing the project’s infrastructure the need for drainage of rainwater. The recent rainwater crisis did not affect our project.
Moreover, the company includes a group of departments to ensure the integration of the development of projects and the provision of services with the required quality on time, including a contracting arm and other project management to ensure the maintenance level.
Do leasable projects represent a burden on real estate developers?
The development of administrative and commercial projects with the aim of rent is a burden in the development stages, especially because the return is delayed until the completion of the project’s operation contrary to sale, which provides liquidity from down payments and instalments which contribute to covering the cost of implementation.
The company has prepared feasibility studies for the two projects with a view to lease them and has arranged the required financing. The company believes that the best investment is leasing, especially in light of the great demand for these types of units by foreign companies, which prefer rent.
What is your expectation for real estate prices in the current year?
Property prices witnessed a big boom last year as a result of the economic reform measures and raised the cost of construction, including units sold according to the cost prior to the decision to liberalise the exchange rate of the pound, but the company has committed to the values specified in the contracts and did not raise them, despite bearing additional burdens.
I expect a limited hike in prices during the coming period with the stability of the prices of building materials, but in the case of an increase in cost or value of land, that will be followed by increases in unit values.
Do you believe in an imminent real estate bubble?
The real estate market is safe from a real estate bubble because there are no reasons for the exaggerated evaluation of unit prices or the large dependence of customers on mortgage finance, in addition to the fact that the supply meets the demand from customers, whether for real housing or investment.
The reduction of banks’ interest rates spurred customers to inject liquidity into real estate and the recent period witnessed an increase in the demand for immediate repayment. Existing customers have a desire to pay the value of the unit and get a suitable offer in return.