A number of real estate companies are reconsidering the pricing for their projects that will be executed this year due to the recent devaluation of the local currency, Al Mal reported.
Among these are Roaya Group Egypt, which is currently considering the new costs of its investment expansion plan in 2017 following its decision to increase the price of their projects by 15%, according to the company’s CEO Hesham Shoukry.
The company is planning to start construction in the commercial/office phase of its project Stone Park in New Cairo, which is set to be built on 360,000 square meters, while the entire project spreads on 2 mn square meters.
Shoukry added that the costs for developing the commercial area had already reached EGP 7 bn before the devaluation of the currency.
ARDIC is another real estate company that is currently re-pricing its projects, including the prominent Zizinia El Mostakbal, which previously had a total investment cost ranging from EGP 2 bn to EGP 3 bn, but is set to increase to EGP 4 bn in 2017 to make up for the additional spending.
The company has recently increased the prices by 10% and plans to further increase it to 20% or 30% in 2017. The company has also prepared plans to tackle the unpredicted costs if the dollar continues to rise to EGP 24, according to Ashraf Deiwedar the company’s CEO.
Further, Ibn Sina for Real Estate Investment has postponed construction on its project Cecilia Lagoons located in Matrouh until the market is stable and it has built a better financial plan for the increasing costs.
The company has increased the prices of their projects by 30% to 50% by the end of 2016 and plans to decrease the years of installments from six years to two or three years, according to the company’s Deputy Chairman Atef Ibrahim.
Meanwhile, other real estate companies have postponed sales of commercial units located in shopping malls following the flotation of the pound, while others yet are considering renting the units rather than selling them, Al Borsa reported.
Facilitations have been offered to tenants in shopping malls, including payment of the rental value in Egyptian pounds rather than dollars in large shopping malls, or extending the deadline of rental payment to an addition 15 days for medium and small shopping malls.
City Stars, Mall of Arabia, and Cairo Festival City are among the malls that have decreased the selling prices of their units and changed the payment method from dollars to Egyptian pounds, according to Ehab Galal, Chairman of iHome for Real Estate Marketing.
Shopping malls are expected to increase their rental prices by 30% in the upcoming period, according to Mohamed Gamal, Investment Manager at ERA Egypt.
Gamal also stated that approximately 80% of shopping malls have decided to rent their units in the upcoming period, rather than selling them, in efforts to make use of the rising price of the dollar and the increasing prices of products.