CAIRO: Egyptian real estate company Amer Group said on Wednesday it was scrapping plans to expand its Porto Marina Golf resort due to the economic slowdown.
Chief Financial Officer Hisham Taha told Reuters Amer, which has already developed the project’s first two phases that include 9,280 housing units, had decided to stop paying for a plot of land it had bought under installments for the expansion.
Porto Marina Golf is a residential and golf resort covering 1.5 million square meters (16 million square feet) of Egypt’s Mediterranean coast.
"In light of the current economic situation, the board decided to cancel the land contract of the third phase of Porto Marina Golf on condition that the paid amount is reimbursed," Taha said.
Amer Group, which sells property along the country’s Red Sea and Mediterranean coasts, has been expanding abroad with projects in Syria and Dubai. It has said it is also looking at investing in Saudi Arabia.
Taha added Amer was eyeing projects in Turkey. The property developer had begun selling units in its Porto Tartous tourist project in Syria.
The company last month posted a 10.6 percent increase in 2010 net profit to LE 557.1 million pounds.
According to an article in Al-Mal, a legal claim has been filed to annul a contract allocating 2.175 million square meters of land located on the coast of the Suez Gulf to Amer Group, on which Porto Sokhna Golf is built.
The claim stated that on March 13, 2007, the then-head of the Tourism Development General Authority sold the land piece at a cost of $1 per square mtere, which according to experts is estimated at LE 7,500, therefore wasting state funds.
In its daily market report, Beltone Financial said, “Golf Porto Sokhna is an operational project, and Amer Group has already sold 73 percent of the total units in this project.
“Amer group has not received any legal notice or any type of communication from NUCA/government authority about the Golf Porto Sokhna land. Operation in Golf Porto Sokhna is going normally, and the management is confident about the success of the project.” –Additional reporting by Daily News Egypt
