CAIRO: In a bid to enlarge its family stake, Talaat Moustafa Group (TMG) Investment announced Wednesday it acquired the National Bank of Egypt’s shares in mother company TMG Holding in a deal worth LE 1.275 billion.
By virtue of the transaction, TMG will acquire 133,604,071 shares in the company, which constitute around 50 percent of total shares, said Hisham Talaat Moustafa, chairman of TMG.
With total land bank in Egypt standing at 48 million square meters, TMG has become Egypt’s largest developer by market value. The company has also built three luxury hotels under the Four Seasons brand in Egypt, and is expanding another in Luxor.
Moustafa told reporters on Wednesday that TMG made a first-quarter net profit of LE 425 million ($78 million), up 27 percent from the same period a year earlier.
“Profit in the second quarter will maintain first quarter levels, he said.
Sales rates, he added, would also increase this year on strong demand for real estate in Egypt, soaring about 21 percent. The company’s sales in 2006 amounted to LE 6.2 billion; while in 2007, sales jumped to some LE 10 billion. “We expect sales to hit around LE 12 by the end of this year, he boasted.
The firm – which began trading on the Egyptian Stock Exchange last November – has recently embarked on a large expansion plan, eyeing regional as well as international markets.
“Our strategy seeks expansion both regionally as well as [internationally], where we plan to be present in the [world’s] most promising markets,
Moustafa said. “We first began with the Saudi market.which we expect will generate 40 percent of our turnover by the end of this year.
TMG announced mid-May it agreed to buy a second plot of 3.8 million square meters of land in Saudi Arabia, raising its total land bank in Saudi Arabia to 7.8 million square meters.
“We are currently exploring further opportunities in Saudi Arabia where we plan to broadly increase our land bank because it is a very promising real estate market with huge potential, Moustafa added.
The company’s first housing development project in Riyadh, Saudi Arabia, will include 5,000 residences for an anticipated 22,500 people. Moustafa explained that the Saudi real estate market would increase the company’s revenues, as there is huge demand on buying property, particularly among the Kingdom’s young population.
“This is an indicator that demand will last for at least 25 years. Saudi Arabia also enjoys huge amounts of liquidity due to hikes in oil prices.which entails that income levels are also high. Furthermore, construction costs in Saudi are close to those of Egypt, which again points to the market’s high potential.
TMG said earlier this month it had formed a joint venture with US-based Hill International Inc. for construction projects in the Middle East. Hill International will manage TMG’s projects, including luxury hotels in Egypt and housing developments in Saudi Arabia.
Moustafa also revealed news that TMG is currently looking into entering European markets, namely Montenegro and Ukraine, to profit from growing tourism.
“Montenegro is a very promising country and has growing demand on real estate both domestically and internationally, while Ukraine enjoys high growth rates, he said.
“We are always eyeing markets with political stability, high economic growth, and high rates of tourism.
