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

More documents

Recommendations

Info

5 July 2010 Real Estate, Construction and Building Materials Egypt Real EstateStrong management team is a differentiatorSODIC is run by a strong management team (appointed in 2006 to restructure the company).The management team has been fairly successful in resurrecting SODIC from a distressedsituation, arranging finance for land acquisitions at prime locations, monetizing the value ofSODIC’s landbank, partnering with other investors in its projects and above all providing aclear growth strategy for future.Shareholding structureEFG Hermes owns 15% (through its 94% holding in October Property Development) ofSODIC, followed by Olayan Saudi Investment Company (12%) and private individuals (12%).Free float is 58% while foreigners can own 100% of the stock.Figure 83: Shareholding structureOctober PropertyDevelopment16%Olayan SaudiInvestmentCompany12%Source: ZawyaFree Float58% Private Individuals12%GRE EgyptOther Corporate1%1%Key managersMr. Maher Rafik Maksoud – CEO and managing director. Prior to joining SODIC, heworked for eight years with Orascom Hotels and Development as executive vice presidentand CEO of the hotels division.Mr. Ahmed H. Dabbous – CFO. Prior to joining SODIC, he worked as a senior investmentofficer of IFC in Washington and as a country manager for Actis Africa.Mr. Youssef Hammad – Chief Commercial Officer. Prior to joining SODIC, he worked withProcter & Gamble, Orascom hotels and Orange.Mr. Ahmed Demerdash Badrawi – Chief Business Development Officer. Prior to joiningSODIC, he had a string of entrepreneurial successes having founded Egypt’s first recordmanagement business and Egypt’s first English language independent newspaper.Deutsche Bank AG/London Page 43
5 July 2010 Real Estate, Construction and Building Materials Egypt Real EstateReal estate portfolioKey development projectsAllegria (West Cairo)Spread over 2.4m sqm of land (556k sqm of planned BUA), Allegria is the flagship project ofSODIC. This luxury residential development located in West Cairo on Cairo Alexandria Roadtargets high end clients and will contain 1,224 residential units (in four phases) along with an18-hole Greg Norman Golf Course. The project was launched in 2007 and will be deliveredbetween 2010-2012. As of end March 2010, the project was c.75% sold (1,037 units) andc.45% of the cash has been collected on the sold units. The project has been well receivedby the market, as seen by strong price appreciation since launch.Westown (West Cairo)Located near Sheikh Zayed/Sixth of October City on Cairo Alexandria Road, Westown is oneof the two downtowns that SODIC intends to develop. It will be spread over 1.2m sqm ofland (BUA 2.0m sqm) and is set to be a mixed-use community with an optimum mix ofresidential, retail, commercial and hospitality space. The project was launched in 2009 andwill be delivered between 2013-2020. Westown includes a mix of “for sale” and “for lease”properties. The development has a strong location advantage as it is close to Smart Village, asuccessful business park. In light of the current market conditions, although the entire projectis master planned, it will not be launched together. Instead, it will be launched in phases (subdevelopments) with each phase catering to a mix of residential/commercial/retail usage. Welike the strategy as it reduces the risk of heavy upfront capex outlay in case the sales do notpick up as expected, and minimizes the risk of unsold inventory at completion.Figure 84: Westown BUA by segment – Sqm, end 2009 Figure 85: BUA by revenue mix – Sqm, end 2009Entertainment9%Hotel2%Residential23%Sale28%Retail18%Land Sale40%Commercial48%Lease32%Source: SODICSource: SODICThe developments in Westown planned for the next 18months are the following.• Polygon – Launched in 2010, Polygon is primarily an office complex (51k sqm) alongwith retail space of 3ksqm. 47% of the BUA is intended for sale while the remaining53% will be held as investment property. c.43% of the commercial space meant for salehas already been sold.• 40 West – Launched in 2010, with a BUA of 57k sqm, 40 West is a mixed-use project(73% residential, 12% commercial, 5% retail, 10% hotel). 73% of the project is meantfor sale while the rest is expected to be held as investment property. c.42% of theresidential portion has already been sold.Page 44Deutsche Bank AG/London
Page 1: CompanyGlobal Markets ResearchMiddl
Page 4 and 5: 5 July 2010 Real Estate, Constructi
Page 9 and 10: Page 8 Deutsche Bank AG/LondonFigur
Page 43: 5 July 2010 Real Estate, Constructi
Page 67 and 68: Page 66 Deutsche Bank AG/LondonFigu
Page 95 and 96:
5 July 2010 Real Estate, Constructi
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109:
Deutsche Bank AG/LondonMiddle East
show all

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

Create successful ePaper yourself

Delete template?

Save as template?