Summer is still at its peak, with a diversity of real estate projects in Egypt’s coastal line. For that, Invest-Gate sits with one of the masterminds behind Tatweer Misr, which is implementing two megaprojects on the Egyptian coastline, North Coast’s Fouka Bay and Ain Sokhna’s IL Monte Galala, besides Bloomfields in east Cairo. Having managed to position the company among the industry’s tycoons in a short time, CEO and Managing Director Ahmed Shalaby sheds light on Tatweer Misr’s vital achievements in the past five years and upcoming plans, while sharing his insights on the market’s status.
As you celebrate five years of success, tell us about your company’s milestones/ achievements during that period?
Five years ago, Tatweer Misr started to present an added value and bring a different concept to the Egyptian real estate sector. We managed to be one of the market’s leading companies, in terms of numbers, givens, and achievements. Actually, we made remarkable progress in projects’ construction and delivery dates.
Currently, we are working on three projects, namely Fouka Bay, IL Monte Galal, and Bloomfields. Their land bank totals 5 mn square meters, with a built-up area of 1 mn square meters to date. Our goal remains the same, which is to always exceed our expectations and that of our clients.
We managed so far to attract 6,200 clients and we consider them part of our family. We are now celebrating the delivery of the 196-unit first phase of Fouka Bay, reflecting our objective to exceed clients’ expectations by delivering properties with specifications higher than those stipulated in the contracts.
We do not only deliver fully-finished units, but also ones with exceptional interior designs by Mona Hussein Design House. Now, people know the difference and the added value we endeavor to deliver.
How many sales did you generate of your projects so far?
We managed to sell 6,200 units, with a total value of EGP 15.5 bn across all three projects. In 2019, we target EGP 6 bn sales out of 1,500 units; we already achieved 50% of these figures in the first half, despite the intense competition. As for the upcoming years, targeted sales will depend on the land bank we plan to expand into.
What are the latest updates on your projects (Fouka Bay, Il Monte Galala, and Bloomfields)?
We are working simultaneously on the three projects, in terms of sales, construction, and delivery. Most of Fouka Bay’s units are already sold out, with the final phase including fully-furnished serviced apartments.
We signed an agreement with the international hotel operator Kerten Hospitality to develop seven hotels in Fouka Bay and IL Monte Galala. Kerten is a unique and modern company for they do not have a manual for hotels development; they first check the location and then accordingly start carrying out the venture’s interior designs and themes.
As for Bloomfields, we announced the signing of a memorandum of understanding (MoU) with New Jersey Institute of Technology (NJIT) and Ocean County College (OCC) to establish Egypt’s first American International Branch Campus (IBC) at the compound, situated in Mostakbal City. We are discussing the contract and its clauses, with full details to be announced by the end of this year.
We also inked an MoU with Global Entrepreneurship (GEN) to develop an entrepreneurship hub in the same project. As for the project’s residential component, we are currently presenting fully-finished apartments designed by Mona Hussein Design House, provided at competitive prices averaging EGP 16,000-17,000 per square meter. This is the gift we are offering to our current and new clients on the occasion of celebrating five years of success.
Overall, we also signed partnership deals with Orange Egypt and Schneider Electric to present smart solutions for our clients in the three projects. Schneider will implement a central control system to provide its users with a remote-control platform for all operating systems, including payment of electricity, water, gas, and electronic bills through a smart mobile application. This will make maintenance and energy costs drop in the long run by 20-30%. In addition, Orange’s Triple Play services will facilitate the connection to a variety of other services, such as controlling security, water, and electricity systems, inside and outside the residential and commercial units.
In brief, the model of projects we offer aims to present a different, sustainable, and smart lifestyle on all levels for more “happy communities.”
What are the most effective CSR initiatives you launched so far?
Our participation with Invest-Gate in its leprosy initiative is really important to us. We hope to build on it until we put an end to this disease in Egypt.
Generally, we mainly focus on education and entrepreneurship, and we sponsor lots of such relevant events. We have been sponsoring the Global Entrepreneurship Week for four years now. We also hold an annual innovation competition, whereas the third edition will be convened this year. We also masterplanned Bloomfields’ entrepreneurial hub to teach entrepreneurship in different fields, while providing a network for entrepreneurs that will help them market their ideas and attract investments to their projects. Additionally, we sponsor students, from Cairo University’s Faculty of Engineering, who participated in Thailand’s Shell Eco-Marathon Asia Competition with energy-efficient designs for vehicles. As you know, youth under 30 years old represents the majority of our community and we believe they need to be equipped with the qualifications and tools to create a job opportunity rather than seeking it.
Through our collaboration with Invest-Gate, we aspire to have a more significant CSR role in the forthcoming period.
What’s your plan for the upcoming five years, in terms of new launches and investments?
For our current projects, we plan to deliver 700 units in Fouka Bay’s phase II and 1,200 units in IL Monte Galala. By the end of 2020, we aim to deliver around 2,000 units in total. Generally speaking, we are always hopeful. As we managed in the past five years to prove our existence with such strength, we plan to maintain our performance and focus working on three main axes.
The first axis is to boost non-residential components in our projects, in partnership with other investors, notably foreigners. Beyond that, activities such as hotels, international universities and schools, and commercial buildings will essentially enlarge the company’s name and value. I believe that the non-residential component is a recurring asset and the main driver for any developer’s sustainability.
The second axis is expanding inside Egypt; we are currently studying investment opportunities in Sheikh Zayed Extension and the North Coast. We are also looking forward to investing in New Alamein, New Mansoura, and Upper Egypt. I see that developers should invest more across the country rather than three or four destinations only. This will be a more sustainable approach for any company, backed by the expansion and diversification of its client base.
The third and last challenging axis is to be a regional and international player in real estate development, not only locally but also abroad. We are mulling investment opportunities in Africa, GCC, and Europe. You will soon find our name representing Egypt overseas and this will support the country’s plan for boosting real estate exports.
To what extent did the state’s participation in foreign exhibitions impact your sales to foreign buyers? What is the percentage of them out of your overall clients?
Expats represent 20% of our clients, while foreigners account for 5%. Nationalities vary from Saudi Arabia to France, the US, China, and the UAE. Extra efforts are urged to further market Egypt’s image abroad and provide strong incentives for investors, while developers need to expand in offering fully-finished units to be able to properly compete internationally.
Do you think second home destinations will become first homes, especially after the government’s efforts to turn coastal areas into year-round ones?
The North Coast is witnessing a development boom and this urban expansion should absorb part of the population increase in the upcoming period. This also explains why New Alamein is important as an integrated city and economic base that will create job opportunities and other living essentials. In turn, this will transform the North Coast into an all-year-round destination, with tourism businesses operating all year long.
I believe that New Alamein can open up the convention tourism market. However, this requires some essential factors such as international exhibition centers, hotels, airports, and the formation of a company specialized in managing conferences and setting an annual agenda for events all over the city.
Additionally, the state has Ras El Hekma, located near Marsa Matrouh, in the pipeline to make it an international tourist city.
How do you evaluate the market activity in 2019?
Real estate is one of the most important economic sectors and this has been reflected during the past five years. We have a strong urban development plan for east and west Cairo, Delta region, and Upper Egypt. Consequently, this led to the industry’s growth at an annual average of 50% in the past two-three years, driven mainly by high sales. The sector’s growth, this year, is expected to average 15-20% due to the low purchasing power.
I anticipate the growth average to not be the same for all companies; some will suffer and some will be shunned due to the intense competition and the market’s professionalism, so the current period only welcomes the professionals. Nevertheless, the industry will continue to grow strongly due to the increasing population, which calls for a real need for urban expansion. On a separate note, we hope to see a different model of banks financing private projects to boost the market’s activity.
Find out more on what’s going on the real estate industry during summer 2019, with an extraordinary focus on the North Coast, at Invest-Gate’s August report/issue.