CAIRO: A growing middle-class of affluent Egyptians are pushing demand for more commercial and retail space, but the sector is still an untapped market for property developers, a SODIC executive said on Wednesday. SODIC, which mostly builds for the high end of the real estate market, has been steering away from middle income housing units, largely because a tiny mortgage market, hemmed in by high interest rates makes it less economically attractive. "As the private sector becomes formal, large, and well-entrenched, suddenly there is enormous demand for commercial property. This is an area we consider extremely promising and extremely under-served," Chief Executive Maher Maksoud told a Reuters Middle East investment summit. But he said the firm, Egypt's third-biggest listed developer, would continue to build top-end houses where demand for homes in the country of 78 million people has helped fuel a construction boom even as a global downturn hurt other markets. "Certainly housing is not something to be put aside, but is an extremely competitive market. Everyone is involved in housing," Maksoud said. The company, which has made LE 1.6 billion ($279 million) of sales so far in 2010, is making more than 50 percent of its profit from commercial projects, he said. SODIC's first commercial development was launched in December. The firm aims to develop some 1.5 million square meters of commercial property around Cairo and is counting on commercial leasing to bring in LE 400 million a year by 2014. Retail power Small and medium-sized companies, which account for about 70 percent of Egypt's gross domestic product are at the heart of demand, employing millions and increasing purchasing power. "This is a milestone in the recent history of Egypt, the private sector has become a larger employer than the public sector," Maksoud said. "It's creating a total revolution in the real estate market and we are just at the very beginning of it." SODIC, in a consortium with Juhayna and a number of businessmen, is developing a $37 million mall and entertainment center in Mansoura on the Nile Delta. "Egypt has become extremely lucrative for retailers. It is one of the outposts of continued prosperity and confidence." SODIC is bringing Carrefour, Europe's biggest retailer, to the project, and is the first developer to look outside of Cairo for such a scheme. Carrefour already has outlets in the capital. The firm is studying replicating the project in Alexandria, the Delta, Assiut and Minya in Egypt's south, Maksoud said. "At the end of the day, we are betting on a certain macro-economic story in Egypt," he said.
