SODIC intends to accelerate the pace of construction of its projects in East Cairo, West Cairo, and the North Coast. It has also allocated 10 billion Egyptian pounds for construction works in the current year. Engineer Ayman Amer, the company’s CEO, stated that they have decided to hedge against market variables by allocating 2 billion pounds to purchase building materials and inputs during the year 2023 to ensure the continuity of work in their various projects during the current year.
He mentioned that the company intends to resume sales in its projects in the coming days after closing them last November to study market trends and prices. They are also close to opening a sales office in the United Arab Emirates, and they are considering establishing offices in several Gulf countries. He mentioned that the company has sold 205 units out of a total of 446 in “The Estates” project in West Cairo.
They have also sold 40% of the “VYE” project, which is being developed in partnership with the New Urban Communities Authority, covering an area of 464 acres with over 5,000 units. The completion rate has reached 45%. SODIC is considering purchasing new lands in West and East Cairo with areas of no less than 400 acres, according to Amer.
He clarified that the company owns a land bank of approximately 1,700 undeveloped acres, distributed between 750 acres in the North Coast, 500 acres in West Cairo, and 450 acres in East Cairo. SODIC aims to increase the proportion of recurring revenues from non-residential projects from the current 7% to around 15% while operating four hotels in the North Coast and West Cairo with a total of 500 hotel rooms.
Last August, SODIC signed a partnership agreement with NUBO Hospitality Company to establish two hotels in its projects in West Cairo and the North Coast. As part of the partnership, the global brand “NUBO” will be launched in two of SODIC’s projects in both “New Zayed City” and the North Coast. Amer believes that the Ras El Hekma deal in the North Coast is more than excellent for its role in accelerating coastal development and putting Egypt on the tourism map.
He affirmed that the cooperation with the Emirati side is more than excellent to position Egypt as a global leader, in addition to achieving leaps in the real estate export sector. He confirmed that the company achieved contractual sales during the year 2023 worth 30 billion pounds, despite the challenges facing the real estate market.
He explained that they have the ability to increase sales ratios, but the hedging policy they adopted confirmed that the achieved sales rate aligns with the requirements of the current stage, which emphasizes a balance between sales, profits, and financial obligations.
He added that the company achieved a growth rate in contractual sales achieved last year in 2023 compared to what was achieved in 2022 by about 50%, with a value of about 20 billion pounds in 2022. He explained that SODIC targets growth rates in all activities and indicators within the various departments of the company.
Engineer Ayman Amer, the CEO, mentioned that the second half of the current year will witness a significant breakthrough in the market’s size and sales. This comes in light of the decrease in the prices of some raw materials such as iron and cement, which confirms that the market will experience a change during this year.
Amer stated that the company is studying several investment opportunities and seeks to acquire new lands in the current phase, including areas in East Cairo, specifically those under the New Urban Communities Authority.
He mentioned that the company has completed the development of approximately 30% of its new land portfolio in East and West Cairo and the North Coast. He confirmed that the company has increased prices by percentages ranging from 30% to 100% during the past year due to continuous increases in construction materials.
It is expected that this trend will continue in the current year, but the percentages will revolve around 30%. Amer also highlighted the company’s interest in expanding in the renewable energy sector. There are residential solar energy stations in the majority of their projects, which enhance sustainability and reduce harmful emissions.
He praised the multiple decisions issued by the Cabinet and the Ministry of Housing to facilitate the real estate sector, including the reduction of land installment interest rates, which alleviated financial burdens on developers. He ruled out the emergence of new waves of increased installment periods for real estate sales, which he believes will revolve around a maximum of 7 years.
Amer revealed that the company has paid off a sum of 644 million Egyptian pounds, representing its partners’ share in the SODIC East project near Shorouk City and VYE West Cairo. He clarified that the company has paid around 421 million Egyptian pounds to the New Urban Communities Authority, representing their annual share in their partnership to establish the SODIC East project in East Cairo.
Amer added that SODIC also paid 223 million Egyptian pounds during the past year, representing the New Urban Communities Authority’s share in their joint project in West Cairo. It is worth mentioning that the New Urban Communities Authority signed a partnership agreement with SODIC in 2016 to develop 655 acres in the New Heliopolis City. The same mechanism was repeated with the New Urban Communities Authority in the VYE project in West Cairo.
Amer stated that the VYE project covers an area of 464 acres and includes 5,000 units, with the target to deliver 1,991 units between 2025 and 2026. The delivery of the project’s first phases is expected to begin in the second quarter of 2025. He also mentioned that approximately 45% of the project’s land has been built so far.
Furthermore, he explained that The Estates project in West Cairo spans over 630,000 square meters with 446 units. To date, 205 units have been delivered since November 2023. He confirmed that the company is exploring all available financing alternatives to enhance financial stability and complete ongoing projects.
They also have detailed studies for any expansions in East or West Cairo or on the North Coast, provided that suitable opportunities are available. In November of last year, SODIC signed a credit facilitation agreement with Commercial International Bank (CIB) worth 1.2 billion Egyptian pounds, for a duration of 7 years, with the aim of financing the company’s ongoing operational activities for various projects.
Amer clarified that the company sold 1,984 units during the past year, contributing to a total contracted sales value of 30.2 billion Egyptian pounds, with an annual increase of 42%. Strong sales were achieved in projects in West Cairo, which accounted for 51% of the sales, followed by 32% for East Cairo projects, and 17% for projects on the North Coast.
