In an interview with Daily News Egypt, Mohamed Hany Al-Assal, board member of Misr Italia Holding Company, explained the details behind the company’s investments in the real estate sector.
What are your upcoming projects?
We are preparing, until the end of 2015, our stock market issuance that will act as a source of funds for the company. The issuance will take place during the first quarter of 2016. On the other hand, we are undertaking serious negotiations to obtain 1,500 acres on the North Coast, and another 500 acres in New Cairo.
How many companies are you going to issue on the stock market?
We are offering five companies operating in real investments, out of our 12 companies: Misr Italia for Real Estate Investment; Misr Italia for Touristic Development; Misr Italia for Urban Development; Misr Italia for Red Sea; and Misr Italia for Housing and Reconstruction.
Are you issuing 20% of your stakes?
Until the present moment, they are not 20%, as there is a Gulf company that wants to acquire 10% of our stakes, so we might issue 10% on the stock market.
Who is the Gulf company?
It is a Saudi company, operating in the real estate market.
Did you reach a final agreement regarding this?
No, we are still in the negotiations phase.
How did the move come about?
The company has made us an offer, as they have several projects in the real estate sector, and they have shown an interest in entering the Egyptian market. They sat with several Egyptian companies, and then we travelled to them to discuss the move, and we’ve seen a great potential in the move.
Who is the company coordinating the stock market issuance?
It is Prime Holding.
Are you going to invest in the Suez Canal Axis Project?
We are already participating, as we have Mousa Coast that is near the Suez Canal Axis, and we made some changes in the Mousa Coast project to cope with the mega project. For example, we had planned a commercial mall with a space of 10,000 sqm, however, after the New Suez Canal’s opening, we decided to construct a commercial centre with the space of 80,000 sqm. In addition to that, we have obtained a licence to establish a university for tourism and hotels near the area, which will serve the mega project. We are also planning to establish five hotels with 1,500 rooms. The Mousa Coast project has turned from being a normal tourist resort to a coastal city to accommodate 16,000 units, an Olympic club, commercial centre, spa, pools and over 10 restaurants.
Are there any updates regarding the project’s construction?
We have already handed over 2,000 units, and by the end of 2015, we will hand over an additional 500 units. Our plan is to hand around 500-1,000 every 1.5 years.
What is the timeframe for concluding the Mousa Coast project?
It will take from 15 to 20 years. It is deemed one of our biggest projects.
When is the value of investments you are pumping into the commercial mall?
It costs between EGP 1bn-EGP 1.5bn. We will start building the commercial mall by the end of this year.
How much are you planning to invest in Mousa Coast in FY 2015/2016?
We are planning to invest no less than EGP 0.5-1bn.
You mentioned that you have purchased land along the North Coast. What projects will you build on this land?
We’ll do something similar to Mousa Coast, and we’ll start the preparations by early 2016.
How much will you invest in this project?
Not less than EGP 20bn. It will take from 15-20 years.
What are the updates regarding the Cairo Business Park project?
It will be the first administrative compound in New Cairo. It consists of 42 administrative buildings covering 90,000 sqm, while the commercial buildings will cover space of 20,000 sqm, in addition to a car park, a 120-room hotel, a conference hall accommodating 1,000 individuals. It serves medium-size and large-sized projects.
When will the project open?
The first phase will be in 2018, the second in 2019, with the third phase in 2020.
How much are you pumping into this project?
It is around EGP 1.2bn. We have sold 90% of the first phase, which consists of 10 buildings and we will showcase the second phase at the Cityscape conference, which consists of 20 buildings. We’ll sell 30%, and 70% will be for lease.
What are the latest updates on the Italian Village?
The project is built on 36 acres, consisting of 1,700 residential units of which 1,250 units have been handed over. Inside the Italian Village, a project named Italian Square will be established.
What is the Italian Square?
It is a commercial mall, and we’re making it a brand. It will exist in 6th of October City, New Cairo, Mousa Coast and our project in Ain Sokhna. The New Cairo Mall will be the biggest.
What is Misr Italia’s total value of investments in 2016?
Next year, we will launch 2,000 tourist units in Mousa Coast and 500 tourist units in the Ain Sokha project, with EGP 2bn in investments. It is 20%-25% more than the 2015 investments.
Are you negotiating with the government to participate in the Cairo Capital project?
Yes we are, but we are waiting for the issuing of lands for sale. We are targeting 500-1,000 acres.
Have you obtained any loans recently?
We negotiated an EGP 600m loan from the National Bank of Egypt (NBE), to finance the Cairo Business Park.
What are the projects that you will showcase at the Cityscape conference?
We are showcasing the La Nouva Vista project, which has already been constructed. It is more of a residential resort, consisting of 131 villas on 40 acres. We made investments of EGP 800m on it.
From your viewpoint, what are the main challenges facing the real estate sector?
The increasing prices of lands, for example lands price in New Cairo this year has doubled compared to last year. Also, the unavailability of the US dollar is negatively affecting the sector.
