CAIRO: Egyptian real estate developer Six of October Development and Investment Company (SODIC) said it bought a 50 percent stake in a Syrian developer forming a new company called Palmyra-SODIC. In cooperation with Syria's MAS Economic Group, SODIC bought 50 percent of Palmyra for Real Estate Development Company, a subsidiary of MAS, for $40.5 million, according to a statement issued Thursday. SODIC will be responsible for Palmyra-SODIC's management, according to the statement. MAS Economic Group — a Syrian conglomerate working in the food, cement and real estate industries — will place Firas Tlass, its current Chairmain and CEO, as the chairman of Palmyra. Syria has “a population of 20 million, strong economic fundamentals, an underserved real estate market and a strong and reputable partner,” Maher Maksoud, SODIC's CEO, said in a statement. He added, “We plan to launch several projects over the next two years and to fast track the execution of the company's existing project.” At present, Palmyra has only one 200,000 residential project underway located in Kafr Kouk, which is comprised of 169 villas, with the delivery date expected to be in early 2012. A second project will be launched in the first quarter of 2011, which will cover 500,000 square meters near to Tilal Al Yasmin, and will be mainly residential, with commercial components as well. Hisham Halaleen, senior analyst at Naeem Brokerage, said on Thursday, “The markets have reacted very positively to this announcement; SODIC's stock is up, but it is still too early to know the full impact, as the details of the announcement have yet to be made.” This move will place it in a favorable position in Syria with regards to its competitors, who mainly focus on Lebanon and Saudi Arabia, he continued. SODIC is the first of its kind to enter the Syrian market, he added, and its main Egyptian competitors have primarily focused on Saudi Arabia. SODIC's entry and integration into the market will be facilitated and accelerated by the fact that they are buying into an existing company already on the ground and operating, rather than starting from scratch. Many French tourists would be attracted to development projects such as the ones SODIC would provide, as they represent a significant part of tourists that frequent the country, he added. Through Palmyra, the company will have access to a 2.6 million-square meter land bank located in Syria's major population and tourism centers in Damascus, Aleppo and Lattakia. Halaleen thinks that there is significant opportunity to be exploited in Syria, “although it isn't a main focal point for development companies such as SODIC, it is nevertheless an emerging market with potential.” The Syrian government has recently been more open to foreign investment and is working to gradually liberalize the economy. On SODIC's market performance, Halaleen explained, the company demonstrated positive results in the first quarter, and should be able to do the same in the third and fourth quarters of 2010 as it begins to deliver units in its flagship Allegria project.
