Maxim Developments Vice President Amr Mohsen is a visionary, seeking to offer an upscale lifestyle at attractive packages to his clients. His ideas are behind numerous one-of-a kind projects, bringing “El Gouna” concept of the Red Sea to the North Coast with his latest Bo Islands in order to maximize the tourism season, extending it to six months from the couple of months a year trend that bring in local tourists. Invest-Gate sits down with Mohsen to discuss Maxim’s projects with a special focus on BO Sid Abdel Rahman, the outlook for Egypt’s tourist destinations, and Maxim’s historical growth in clientele following the float of the local currency.
How do you view the Egyptian economy today?
We have a very high inflation rate and the value of real estate property is rising to compensate yet the people continue to invest in real estate. In merely one year, we have seen an increase in electricity, an implementation of the VAT, heightened water and electricity costs, construction materials cost increase, as well as, floating of the EGP. It has been a very hard year for developers; however, the purchase power remains highly visible. Clients understand where to invest after this inflation. Real estate is critical if you want to understand the Egyptian market.
Why do you think clients prefer investing in real estate as opposed to currencies or gold?
I think people find it a more stable investment outlet than others. It has ingrained in our culture since Ancient Egypt that we do not sell our land. Today, as soon as a young man graduates, he purchases a home, whereas in other countries young people buy mortgages.
How do you view the economic reform program? Are you optimistic about the future?
I am optimistic. We are now living in hard times; the economic equation, everywhere, is that after hard times the economy recovers again. Historically, the economy goes through a rough time every five to seven years but it soon recovers. However, the government has to support the consumer by not offering lands at high prices because the cost of land reflects on the cost of property. This is the main factor, leading to the frequent price increase of real estate in Egypt.
Tell us about some of your projects.
Maxim owns Royal Maxim Palace Kempinski, among some other developments, including BO Sidi Abdel Rahman (BO Islands and BO Sands), Royal Maxim Compound served by Kempinski, Maxim Country Club Compound, and Maxim Residence Compound (Sherouk City).
What about other projects in the pipeline?
We are opening a mall in New Cairo near the American University (AUC) Campus, as well as, another mall on the North Coast; so we have commercial and residential developments. The prior will open this September while the latter will inaugurate in 2018. This second mall is an open-air mall on the beach, somewhat the same concept of JBR in Dubai, with swimwear stores and accessories stores, mainly targeting clients on the beach. Our designs reflect those of Spain and this I believe this is our edge… We present a lifestyle and not just buildings, featuring a unique design. This impacts our clients. Exclusivity is also important; all our clients will receive a Maxim membership card, allowing them to enjoy all our project facilities. We sell a lifestyle.
How do you view the outlook for the North Coast? Do you feel it could become an international destination?
Our weather here is very good to Europeans. If we build our facilities and amenities well, we will convince people from abroad to purchase properties here. We have very good resources that are not well utilized. We have two projects in Sidi Abdel Rahman on the North Coast: BO Islands and BO Sands as part of the BO Sidi Abdel Rahman project. We are developing a gated community over 1,700 feddans, encompassing compounds, BO Islands and BO Sands, a polyclinic, a hospital, and a university. We have the advantage of being located in proximity to the New El-Alamein city, where we are constructing this gated community. The idea is to stretch the timeframe for the North Coast season from the two-to-three- months summer trend.
Bo Islands has already acquired Martin’s Beach that is already open to the public this summer. It has an astonishing atmosphere. In BO Islands, we are selling villas, all of which are waterfront. 88% of the projects comprise lagoons and landscapes while merely 12% is built. Our edge is the privacy and low density of the project. Each island has a name, character, and a different type of unit design layout. You can put your kayak in the lagoon right in front of your house. It is another lifestyle, with all the houses seafront. The lagoons are crystal clear, turquoise colored even.
Developers usually offer a mediocre product at a reasonable price or a good product at a high price. We managed to overcome this difficult equation and offer a high-end product at an adequate price level, which to me was a challenge. We present a lot of facilities, an exclusive lifestyle, and a high-end community. In the last couple of months, we have exceeded sales volumes of EGP 600 mn, which is remarkable. We overcame the challenge and we did well.
What do you think of the government’s plan to attract investments from Egyptians abroad and Arabs into the real estate market?
Two months ago I attended exhibitions in Dubai and Kuwait, where we made very good sales due to the difference in the currency value. We need, as a nation, to become visible to them; show them what we have to gain their trust and interest. If we take Maxim’s example… When we attended those exhibitions in Dubai and Kuwait, we received many interests from buyers to an extent that we just established an international sales department, which has been doing very well. As a matter of fact, it exceeded our expectations. This only happened because we took our products to them. They saw what we are capable of.
So how has the portfolio changed?
Today it mainly constitutes Egyptians living abroad and Arabs. We are targeting during the next period to expand to more markets. I think we have to start going to other countries and demonstrate our products.
What about other vacation destinations in Egypt; where do you feel we are not capitalizing enough?
There is very high potential but the problem is now the low tourist inflows, which the government is keen on resolving. Ain Sokhna is a case on its own. It mainly caters for the locals and is doing very well in that respect. However, Hurghada, Makadi Bay, Sahl Hasheesh, and El Gouna are slowing down because of the float and the tourism problem. I believe things will get better soon as tourism picks up.