Concept Real Estate Group sold more than 95% of the first phase and achieved sales of 65% of the second phase of the project since its launching four months ago, chairperson Ehab Abou El Magd told Daily News Egypt.
Abou El Magd said in an interview that by November 2018, the company would have competed the selling of the project’s two phases.
The company participates in several real estate exhibitions internally and externally. Does the company achieves the target sales through these exhibitions?
We participate in exhibitions not to sell our units, but to be present in the market. In other words, we seek to brand (to be known in the market), not to sell. We are doing well in selling the units online through our social media outlets.
Furthermore, selling in exhibitions varies from one to the other. Sometimes, we sell in an exhibition, while we don’t do so in another. However, we achieve very good sales in exhibitions in Kuwait and Qatar. We only had one outdoor campaign to market our project, and the results were really good. To that, we are planning to launch more outdoor campaigns in the beginning of next year.
We may participate in a UAE real estate exhibition in November.
What are the sales of the first and second phases of Siela North Coast?
Siela project is located on an area of 10 feddans in Kilo 57 Alexandria-Matruh Road. It includes 650 units with an area of between 50 and 85 sqm. The allocation of the 10 feddans is divided as follows: 28% construction, 20% water, and 52% to green spaces and roads.
We sold more than 95% of the first phase and achieved sales of 65% of the second phase of the project since its launching four months ago.
By maximum November 2018, we will compete marketing the two phases of the project.
When will the company deliver the two phases?
The first will be handed over in July 2019, which includes 216 units with sizes ranging between 50 sqm to 85 sqm. The second phase will be delivered in January 2020. The whole project will be completed in 2022.
When will the company start construction of the third phase?
The construction in the third phase will start after delivering the second phase in 2020.
What is the price per square metre?
The price per square metre is EGP 4,500.
What is the company’s expansion plan?
Our target is launching coastal and residential projects. Thus, we seek acquiring land in 6th of October City or Fifth Settlement in New Cairo for residential projects. Moreover, for coastal projects, we are searching for a plot of land in the North Coast with a close proximity to the sea.
When will the company acquire land in the North Coast?
First, we are trying to reach an agreement with the squatters on the land, and then we will buy it from the government. However, for residential projects, we search for lands in 6h of October and New Cairo, which became difficult, especially in New Cairo, because there are few lands to be sold.
How much of Siela has been built?
The land of the Siela project was a mountainous one. We started digging works in 2016, and we continued in 2017. The company removed 300,000 cubic metres since the beginning of 2017.
Franco-Tech for Engineering Works is developing the infrastructure of the project. Concept was founded a year ago to develop Siela, and its founders own Franco-Tech for Engineering Works, which is specialised in the infrastructure works of water, sewage, and electricity networks. It carries out annual works worth more than EGP 10mn and has implemented a number of projects for SODIC, New Giza, and Amer Group, and will take over the infrastructure work of the Siela project, thereby reducing the cost of implementation.
What is the construction cost of Siela project?
The project’s investments reached EGP 350mn.
What are the services the project provides?
The project includes artificial lakes (lagoons) and basins, and an aqua park will be implemented by the company E.MAK. Besides, there will be playgrounds, a mall, and entertaining area for kids, as well as an artificial waterfall and a range of other services developed in three phases.
Moreover, the project includes five plants: desalination plant, drainage station, treatment plant, water plant, and electricity plant.
What payment facilities does the company provide?
The down payment is 15%, and we facilitated to the customers through paying 10% as a down payment and the remaining 5% over a year. The rest of the price of the unit is paid over the course of 6 years.
By how much in terms of percentage did the company’s units increase?
In November, since the flotation of the Egyptian pound, we increased prices by 25%. However, since the beginning of the current year, the company has increased prices by 20-22%. I expect unit prices to increase again by 10% by the beginning of November.
What is the size of the mall in Siela North Coast?
The size of the mall is 1,600 sqm and will include 40 units with space of 40 sqm. The mall is developed on two phases. The first will be inaugurated with the delivery of the first phase of the project. The second phase of the mall will be opened after delivering the project’s second phase.
What are the problems facing newly established real estate companies?
The main problem is that the new companies are not well known; however, we have another company that has a good reputation and experience; thus, we depend on this company in marketing ourselves.
The other project is cash flow as we receive the unit’s price within six years, and the company has to deliver the unit within two years only. Besides, the problem of raw materials’ price hikes.
Do you have to pay any dues to contractors?
No, we don’t.
Do you think real estate companies face problems in acquiring lands?
Of course. We do not have enough information regarding available lands in coastal or residential projects.
For example, some of the land in the North Coast is affiliated to the Tourism Promotion Authority, some is affiliated to the General Authority for Investment and Free Zones (GAFI), and others belong to the Ministry of Agriculture and the Matruh governorate. Besides, squatters illegally own part of that land.
Furthermore, land prices have gone up wildly. The government sells a square metre of land now at EGP 4,000 or more, without connecting the lands with utilities.
Do you think the government is a competitor with real estate companies?
No, I do not think so. For instance, the government is developing projects for tranches whom are not a target of real estate companies.
Do you think liberalising the exchange rate and increasing interest rates affected the market?
I think that liberalising the exchange rate of the pound and increasing interest rates are great decisions.
Although the decisions were good, all construction raw materials increased. Nevertheless, the sales weren’t affected by the liberalisation decision.
I don’t have any concerns regarding the increase in interest rates, because the increase will be absorbed by the inflation after three years. Real estate units’ prices are constantly increasing; therefore, real estate property is a great investment opportunity.
How much was the increase in construction costs after the EGP flotation?
For the project’s plants, raw materials increased by 300% since the acquisition of the land in 2015. Moreover, steel and cement prices also increased by 200%.
Why doesn’t the company plan to launch a project in Ain Sokhna?
Lands in Ain Sokhna are very expensive. A square metre there is estimated at $300 (approximately EGP 6,000).
