Beta Gardens is a social housing project—part of the national housing project for young people—by Beta Egypt for Urban Development. The construction of 1,000 units on 20 acres began in 2008, and by 2009, Beta Egypt for Urban Development had sold all available unites units.
Beta Egypt for Urban Development was founded in 1993, specialising in middle-income housing in Obour City by developing Golf House and Golf Palace projects. In 6th of October City, the company has developed Golf Residence, Beta Greens, and Beta Gardens.
Company chairperson, Alaa Fekry, told Daily News Egypt in an exclusive interview that the company is hoping to be listed on the Egyptian Exchange (EGX) within the next year and a half.
What are the company’s ongoing and completed projects?
Beta Gardens was delivered in 2009, and now there are some units for resale. The Beta Gardens investment project began in 2011 and was delivered in 2015. We also have the Golf Residence which site on 22 acres.
Our fourth project is Beta Greens which was started in 2015 and comprises 840 units over four phases. The units range from 130-140 sqm at EGP 4,500 per square metre.
Construction for the first phase of Beta Greens began in May 2015. It will be delivered in May 2017, while the second phase will be delivered in November 2017. The third and fourth phases will be delivered in early 2018. We executed and marketed about 80% of the project for the first three phases, and the fourth phase stage is yet to begin.
How many of the units have been reserved?
For three of the phases of Beta Greens, 65% of units have been reserved.
What are the total investments for the Beta Greens project?
The total investments amount to EGP 426m for the project’s four phases. Investments were about EGP 100m per phase. The project contains services such as fountains, a shopping mall, an artificial lake, a kids’ play park, a gym, and a track, in addition to places for reading.
What is the company’s land bank?
The company’s land bank has reached 280,000 sqm, with 84,000 sqm of this comprising Beta Greens.
Does the company intend to increase its land bank?
We continue to submit requests to the Ministry of Housing. The company has the ability to develop and facilitate lands of 50 to 100 acres; however, there is a scarcity in the land available for development.
We also submitted requests to the Tourism Development Authority (TDA) and the Industrial Development Authority (IDA). The government announced that it is offering lands for industrial purposes in 10th of Ramadan City and 6th of October City. The government is considering our requests.
We are interested in developing in some coastal regions such as the North Coast, Ain Sokhna and Ras Sedr. Damietta is also a possibility.
How many units did the company deliver in the first half of 2016?
Beta Egypt for Urban Development delivered at least 200 units of the third and fourth phases of the Golf Resident project.
How has the US dollar shortage and the change in the foreign currency exchange rate affected business?
As a matter of fact, the company does not import materials from abroad. The company does buy steel, wood, and aluminium as these prices are controlled by the international stock exchange that deals in US dollars. Foreign trading has, however, encountered difficulties lately due to the dollar shortage. Increased energy fees have affected the ceramics and marble industry and rising fuel costs have affected the price of bricks.
How does the increase in construction costs reflect on the client?
This increase, following the higher price of the US dollar, has increased prices by 15% for clients.
What is the size of the company’s capital?
The shareholders’ equity amounts to EGP 120m. The company relies on self-funding to finance its projects.
Are there plans for the company to be listed on the EGX?
Yes, we intend to list the company on the EGX, hopefully within the next year and a half if the investment climate is good.
Did the company request to develop land in the New Administrative Capital?
Yes, we submitted a request to the ministry to acquire a 1,000 acre plot of land there.
Did the company apply for a bid to acquire land in Mostakbal City?
Yes, we applied for the bid and we bought terms of conditions. However, we didn’t apply fully due to the close period of instalment dues and the high interest rate (18%). Besides, the location of the New Administrative Capital threatens Mostakbal City, as it will fulfil all the clients’ needs.
Does the company seek to form partnerships?
So far, we haven’t received any requests, but if we receive offers we will agree to collaborate.
What is the resale value of the company’s units?
Clients who bought units in Beta Gardens (national housing) can now buy their unit at a 70% increase of the unit’s price.
What is your opinion of financing through banks?
Interest rates on bank loans are very high. The government obtains loans at 16% interest, while this reaches 19% to 20% for the private sector; therefore, prices will be very high.
Does the company plan to acquire more land outside Cairo?
The company submitted a request to acquire 200 acres in Ras Sedr from 10 plots of land offered by the ministry—70 companies are competing to acquire this land. The company seeks to build chalets and resort units with investments of EGP 400m in the case of acquiring this land.
Did the company participate in the latest bid?
No, we did not. No one applied for this bid due to high price per square metre (EGP 6,000/sqm) for the developer, thus the cost will be very high for the client. This means that a 150 sqm lot is about EGP 1m before construction, which is out of our target range for middle-income housing.