Invest-Gate interviewed Ayman Amer, the General Manager of the Sixth of October Development and Investment Company (SODIC), to share insights on sales growth, expansion plans, and strategic resilience.

 Could you please provide us with the latest developments on the June project?

SODIC has successfully sold approximately 55% of the project, valued at EGP 2.5 billion, within just three days for the beach apartments area. This project introduces a new concept to the North Coast, inspired by European style. The delivery of the first phase will start in 2025 after all necessary services are developed.

Since the launch of June in 2021, how have the prices changed between 2021/2022 and 2022/2023?

During this period, June’s sales have increased from 40% to 100% across various projects.

Can you provide us with an update on the hotel project within the June project?

The 180-key hotel in Phase 1 is expected to open by 2027 on high-elevated land, offering stunning views. We are currently in negotiations with a major hotel management company, although no agreements have been signed yet.

Does SODIC have plans for new land purchases, and what is the value of your hedging inventory?

We aim to expand our land portfolio beyond the North Coast to include East Cairo and West Cairo. Currently, we have a significant land portfolio on the North Coast. The ‘June’ project has 140 unlaunched feddans, and we have recently acquired an additional 620 feddans.

Regarding our inventory, we store raw materials for approximately 6 months to a year, depending on their quality.

Are there any other launches on the North Coast this season?

We have recently launched in August the Beach Residences in ‘June,’ offering 180 feddans. We also plan to offer an additional 440 feddans next year.

What are SODIC’s sales targets for 2023, and what achievements have been made in H1 2023?

We have not disclosed specific sales targets for this year. Our standard practice involves continuous market analysis, considering market fluctuations, including changes in currency prices. In such cases, we temporarily pause sales to conduct comprehensive market assessments. However, in H1 2023, SODIC achieved a 23% increase in sales compared to the same period in 2022.

Could you provide information on delinquency rates and changes in payment periods?

In 2022, our delinquency rate was 8.2%, which has decreased to 4.5% in H1 2023. Clients are keen to hold onto appreciating property. SODIC offers vibrant communities that include a diverse range of residential homes, office spaces, schools, medical establishments, entertainment facilities, sports clubs, and retail offerings. We have a reputation for timely deliveries, and in some cases, we even deliver ahead of schedule.

Payment periods have been shortened from 8 years to 7 and 6 years, and ready units are now spread over 4 or 4.5 years. Whenever possible, we aim to accommodate customers by offering 3-year payment plans.

Which banks does SODIC collaborate with?

Our primary banking partners include Banque Misr, Arab African International Bank, and Commercial International Bank (CIB). However, we are open to working with all banks.

What is the total land bank held by SODIC?

Currently, SODIC holds a total land bank of 18 million square meters, with 12 million square meters already developed.

Have foreign and Egyptian overseas sales increased? What are the top nationalities?

Foreign sales constitute approximately 3% of our total sales. However, in 2022, SODIC achieved EGP 1.5 billion in sales to foreigners, including customers from Saudi Arabia, the United Arab Emirates, Canada, and the United States. In H1 2023, we have already surpassed EGP 500 million in foreign sales.

Meanwhile, some projects are highly sought after by Egyptians, as they purchase properties for their children or families, in contrast to the ‘June’ project, which has strong sales abroad.

Our top foreign customers are Emiratis and Saudis, followed by Americans, and Canadians.

Why does SODIC invest in the UAE? Are there any plans for Saudi Arabia?

The acquisition of SODIC by Aldar Properties and ADQ has positioned SODIC as a strong strategic developer. We are planning to open a new sales branch in the UAE soon. As for expanding globally, we are carefully studying the market to select the right markets.

What are SODIC’s upcoming plans and main objectives?

We have plans to diversify into various sectors, including the study of a 550-key hotel project, which could be located in Cairo or the North Coast. Additionally, we are opening the first Finnish School in the Middle East and launching sports fields at SODIC East Club in 2023.

Our goals include maintaining sales and margins while achieving steady growth. We have already achieved a remarkable 23% increase in sales, leading to higher profits this year.

What types of projects does SODIC target?

SODIC develops Class-A mixed-use projects that include a diverse range of residential homes, office spaces, and malls. We collaborate with the New Urban Communities Authority through partnerships, acquisitions, or public-private partnerships (PPPs) to expand our land bank. Our target lands typically span 300 feddans or sometimes even 150 feddans.

What factors enable SODIC to perform well even during market price fluctuations?

Before undertaking any project, we conduct thorough studies to ensure its feasibility. Our Risk department continuously analyzes daily percentages to address potential risks and report on our needs for the next 6-12 months. This allows us to make informed pricing decisions and navigate market fluctuations effectively.