Egyptian luxury-home developer Six of October Development & Investment Co. is in “advanced” talks with the government to buy land it will use to expand outside of housing.
The builder of suburbs to the east and west of Cairo plans to construct office and retail developments as well as resorts that include hotels, homes and leisure facilities, Managing Director Ahmed Badrawi said in an interview at his office in the capital yesterday. The developer, known as Sodic, expects sales to reach a record 3 billion Egyptian pounds ($420 million) this year, he said.
“The key message going forward for the next few years is diversifying out of pure residential,” Badrawi said. “Once you have a stable recurring revenue stream, it helps you a lot for future bumps in the road.”
Like other Egyptian developers, Sodic has spent the last several years embroiled in legal disputes over land it obtained under the regime of President Hosni Mubarak, who was overthrown in 2011. The last settlement, involving its Eastown project, was completed on April 6 and the stock has risen 84 percent since. Sodic reported third-quarter net incomeof 19.4 million pounds, down from 28.5 million pounds a year earlier, according to data compiled by Bloomberg.
The developer plans to invest about 13 billion pounds in the land it already owns, Badrawi said. The first phase of the 7 billion-pound Vilette residential project will start “imminently” on a plot east of Cairo that the company purchased recently, he said.
The government is offering Sodic various parcels of land in the Nile Delta city of Mansoura for a 310 million-pound mall project after local objections cast doubt on the original site. Sodic will see if the sites are desirable, Badrawi said.
Source: Bloomberg Businesweek