Deutsche Bank - Egypt Real Estate - (6th of July 2010) - SODIC

5 July 2010 Real Estate, Construction and Building Materials Egypt Real EstateTable of ContentsExecutive summary ........................................................................... 3Outlook .....................................................................................................................................3Valuation ...................................................................................................................................3Risks .........................................................................................................................................3Investment strategy .......................................................................... 4Egyptian developers outperformed the CASE index in 2009 ....................................................4International comparison: Egyptian developers cheap against EM...........................................6Stay risk averse: Buy SODIC ................................................................................................... 10Valuation .......................................................................................... 13Valuation methodology ...........................................................................................................13Company snapshot ................................................................................................................. 16Putting regulatory risk into perspective........................................ 17Ambiguous legal framework has heightened regulatory risk .................................................. 17Madinaty judgement to set the benchmark ............................................................................ 17Key themes....................................................................................... 19Supportive demographics lead to strong domestic demand .................................................. 19Demand supply analysis: shortfall to widen, especially in the low- to mid-income segment . 21Affordability held back by lack of mortgage availability........................................................... 22Screening for risk…SODIC the least risky............................................................................... 25Market mispricing quality........................................................................................................ 28Commercial space undersupplied and quality below par........................................................ 30Retail market – Cairo has lowest retail GLA per capita ........................................................... 31Hospitality – low Euro/Dollar exchange rate is a threat........................................................... 32Company profiles............................................................................. 34SODIC ............................................................................................... 35Palm Hills Developments ................................................................ 55TMG Holding.................................................................................... 80Page 2Deutsche Bank AG/London