CAIRO: Arab Company for Hotels and Tourism Investments - a subsidiary of Talaat Moustafa Group (TMG) Holding - plans to construct Luxor's first Four Seasons Hotel after winning the land in an auction, the company said in a statement. TMG stated it submitted the highest bid for a usufruct license on Al Sultana Malak land in Luxor. The company will pay an annual fee of LE 6.8 million starting 2012, with a 5 percent annual increase to reach a total of LE 20 million in 2034. The company plans to construct a Four Seasons hotel on the land as well as a cabin cruiser to sail between Luxor and Aswan, Egypt's biggest tourist attraction cities. "Winning this piece of land will boost the group's revenues generated by the tourism industry [that include] revenues from Four Seasons Nile Plaza, Four Seasons Sharm El-Sheikh and Four Seasons in Alexandria, said Hisham Talaat Moustafa, chairman of TMG. TMG is Egypt's largest real estate developer, comprising of 21 companies operating in real estate and tourism. The group develops large-scale city and community complexes, mainly located on the outskirts of Cairo. It also develops hotel complexes which include residential apartments and/or villas and, in most cases, office spaces and shopping areas. The company is also active in the development of hotels and resorts. It currently has three hotels in operation: the Four Seasons Sharm El-Sheikh, the Four Seasons Nile Plaza and the San Stefano Grand Plaza. It has two other hotels underway: the Nile Hotel, expected to open early next year, and the Marsa Alam Hotel. According to HC Securities, hotels and services revenues contributed 13.7 percent to total revenues in 2007 that reached LE 255.0 million, while the group's entire projects have scored more than 70 percent year-on-year growth in revenues. The group's largest development to date is Madinaty, which comprises a land area of 33.6 million square meters in New Cairo City with a proposed residential capacity of 600,000 people. Sales commenced at Madinaty in 2006, and the project is expected to complete in 2023. TMG is also the sole-developer of residential projects Al-Rehab (in New Cairo City), Al-Rabwa (in Sheikh Zayed City) and May Fair (in Al-Shorouk City). TMG said on April 2 it sold real estate units worth a total of LE 3.2 billion ($587 million) in the first quarter of 2008, about 130 percent up on the same period of 2007. The value of sales in the January-March period of 2007 was LE 1.4 billion. The company added it now has sales worth LE 18 billion on its books but were not yet classified as income, in accordance with the company's principle that it does not count sales as income until it hands over completed units. It expects to complete all those units within three years. The group added that its first-quarter sales mean that the company can achieve its full-year sales target of LE 12.5 billion. TMG made headlines last November when it raised more than $750 million in a private placement and an initial public offering to be used to finance future projects in Egypt, the Middle East, and Europe. The IPO of 65 million shares worth LE 715 million ($129.3 million) - the biggest in Egypt's stock exchange history - was covered a 41.4 times. An earlier private placement of 330 million shares was 17 times oversubscribed, making it the biggest of its kind in Egypt. The group said last Sunday in a statement to the Cairo and Alexandria Stock Exchanges that it made a first-quarter net profit of LE 425 million ($78 million), up 27 percent from the same period a year earlier. It added it made LE 333 million from real estate and tourism activities and the rest from other investments. Meanwhile, the company recently announced it will begin its first real estate project in Riyadh with an estimated investment cost of $1.8 billion. The project is set to provide 7,000 housing units over the next five years. TMG has also made long-term plans to develop 18 hotels in Eastern Europe, with a combined investment cost of LE 8 billion. Shares of the company were 0.95 percent lower on Monday, trading at LE 11.44 on a strong turnover of LE 56.2 million.
