(Photo Handout from Hany El-Assal)
Hany El-Assal, Chairman of Misr Italia Holding (MIH) Company, expressed his optimism regarding the future of the Egyptian economy through the coming years, pushed by the stability in the political and security situation. El-Assal expected the situation to reflect on real estate and tourism investment, which is likely to boom soon, due to the readiness of the market, including investors and consumers.
El-Assal disclosed, in an interview with Daily News Egypt, that he completed the initial features of the New Suez City and that it was submitted to the Prime Minister, Ibrahim Mehleb. He is waiting for a response within two months to start the execution procedures for over 10,000 acres.
What is expected from the New Suez City project that you proposed to the government?
The project will be over 10,000 acres of land; we demand that the government allocate them to our company through the land for development system. We already finished the initial studies of the project, and they were submitted to the office of the Prime Minister in 18 papers. We are waiting for the response of the presidency and cabinet within two months.
We are preparing with a major American engineering firm to draw out the blueprints for the project, after acquiring the official approvals and starting land allocation.
What about the nature of the New Suez City project?
The project will be launched next to the Mousa Coast project, affiliated to our company, at the entrance of South Sinai, as a comprehensive city that has all the sectors; on the top of them are the sector of small and complementary industries for exporting and providing the local market with the industry’s needs of raw materials. The plan is to build 25,000 factories over part of the total 10,000 acres.
The second sector is for modern and development cultivation, for exporting. The third sector is for housing, and it consists of small, medium, big, luxurious and villa units. The fourth sector is educational, and it includes schools for different stages, in addition to a sector for sports and it includes an Olympic village, which would have a horse-riding club and football training centres.
The sixth sector is commercial. It includes an international trade centre and congress centre. The seventh is a tourism sector, and it consists of spa, hotels and tourism centres.
The initial plan shows that moving in the city will be through bicycles. The project is environmentally friendly, working with alternative energy. The project has a green belt of Jojoba trees used in airplane oils, as well as cosmetics. It will work on the desalination of drainage water for irrigation and agriculture. We will not cost the country any money.
You said that the cost of the project is EGP 20bn. How will it not cost the country any money? What are the funding sources?
All we need from the government are the approvals and licences needed to start the project. As for the fund, it is self-funded by the shareholders of the company, and the outcome of listing in the stock market, beside partnerships with a number of investment companies due to the real estate developer system.
We already have demands for strategic partnerships with investors regarding the New Suez City project, but we are waiting for the approvals and may ask banks to acquire loans after a while, in order to fund expansions. Our company is ready for all funding sources, whether they are banks, the stock market, or national or international strategic partnerships.
I already proposed the project to the Governor of South Sinai, General Khaled Fouda, and he was excited about the idea; he asked me to begin immediately. I discussed the idea with the Minister of Planning as well. Now, it is on the desk of Prime Minister, as an initial plan.
What about plans of listing in the stock market?
We are serious about listing over 20% of the group’s shares in the stock market; we contracted with Prime Capital in order to promote the subscription. I expect Prime Capital to finish the procedures of financial, technical and administrative restructuring, in addition to evaluating the share within days, to allow listing to take place by the end of July.
We received, through Prime Capital, huge offers from companies, investment funds and Arab investors to subscribe in the company’s shares and purchase shares, which gives us hope that the subscription will succeed. The company wants to acquire around EGP 1bn.
What are the features of the structuring plan?
We are restructuring more than 10 companies affiliated to the company, working in touristic activities, hotels management, real estate and its development, decoration, in addition to investment activities,
The structuring plan will be implemented through trading shares between direct ownerships, including the shares of the affiliated companies; meanwhile, the loans of the partners will be paid in favour of these companies, aiming to start a tender in the stock market before the end of the year.
Prime Holding signed a contract with Acumen Financial Consultancy Private Limited as an independent consultant in order to estimate the company’s shares and fix a price for offering these shares.
What are the latest achievements concerning Mousa Coast?
We are about to finish the licensing procedure for Mousa Coast in Ain Sokhna, which started six months ago. The project, which is a hotel and a touristic village, is established on 150,000 sqm in Ain Sokhna, and it also includes around 1,800 5-star units, a conference hall, commercial mall, as well as other occupancies.
The company has obtained the land for the project establishment, thanks to a sealed bid launched by the Tourism Development Authority (TDA). It is worth mentioning that 36 companies were competing to win this bid, but the above-mentioned company has presented the highest financial offer, which was at $150 per metre.
The company is targeting the development of 1m sqm in the Mousa Coast Compound in Ras Sedr with EGP 1bn. As for the project, the company has already developed 2.5m sqm out of the total off 8m sqm, keeping in mind that the 1,000 vacation units were functioning last year.
We are about to finish developing around 5.5m sqm, which presents the remaining area in the project, in less than five years, although we have developed around 2.5m sqm in around 17 years, which means that the situation now is much better.
What about Cairo Business Park?
We established around 25% of Cairo Business Park’s constructions, in addition to marketing 5% of the units. We sold two buildings; one of them was sold to Software Company. It is expected that the project, which is divided into two phases, will be finished within three years.
The project is an administrative compound, smart village, established on 300,000 sqm, located on Road 90 in New Cairo, and it includes 42 buildings. Last but not least, the investments for this project amounts to EGP 1.1 bn.
What is the role of the government for the refreshment of the real estate’s investments?
The government is required to offer new lands for investors. During the past three years, there were no lands offered; therefore the government should offer lands in order to be allocated. Lands are owned by the government, while they should be privatised in favour of who is able to develop these lands.
When it comes to real demand on real estate investments and its variety, whether luxurious housing, middle class, housing for citizens with limited income or touristic real estate, Egypt is the country with most demands. Considering this fact, Egypt is a great attraction to many European countries with financial surplus, especially after the continuous price increase regarding real estate in Egypt.
The government still did not develop a vision for the future; it is still concerned when it comes to decisions, especially regarding planning for the future, and therefore the government represents an obstacle for this sector. I wonder how the government could manage to solve the traffic crisis, road crisis along with saturating lands? Keeping in mind that around 85% of the Egyptian lands are not planned; this is why the crisis occurred and the slums phenomenon appeared over the past 30 years.
A law should include articles for urban development in Egypt for the upcoming 50 years. In other words, 50% of the Egyptian lands should be planned over 50 years, and then 25% of its area should be planned over 25 years through a short term of five years.
