Tatweer Misr invests EGP 8bn in tourist housing hotel project

Daily News Egypt interviewed Ahmed Shalaby, Managing Director and Board Member of Tatweer Misr.

Founded in 2014, Tatweer Misr is a shareholding Egyptian real estate company, founded upon the real estate and industrial experiences of its founders. The company's total shareholders include 10 large economic entities, including Arafa Group, Dawoud Group and Ahram group. To discuss the company's projects, Daily News Egypt interviewed Ahmed Shalaby, Managing Director and Board Member of Tatweer Misr.
What is Tatweer Misr's plan for entering the market?
Tatweer Misr has presented a medium-term plan that includes two projects. The company will start with the IL Monte Galala project in Ain Sokhna, with its first phase to be launched at the Cityscape conference. The first phase includes around 2,000 units, varied between chalets and villas.
Tell us more about the IL Monte Galala project; what is the volume of its investments?
The project is on an area of 2.2m sqm, and it is a tourist residential and entertainment project, with investments reaching EGP 8bn. The project will be developed in three phases, the first of which will take five years to be fully implemented, while the second will take four years, and the third three years, of which one year will coincide with the second phase. The full project will be completed in 10 years.
What is the project's current status?
The company has completed the first phase designs and will start preparing the land at the beginning of 2016. The reason that it requires so much effort, in light of the land's special nature, is it will be located in a mountainous zone.
How will the company implement the project?
Tatweer Misr is currently studying the mechanism of allocating the project's implementation to contractor companies. Most probably, the construction will be divided into parts, where each part is carried out through different mechanisms – this will either be through a general contractor, or a management company specialising in choosing contractors. In the meantime, the company has sufficient liquidity to finance the implementation process of its projects. Its current paid up capital is EGP 150m.
Does the company plan to receive money via bank loans?
The idea of borrowing won't be considered for the upcoming period, and will be mainly targeted at the hotel projects, as their revenues will be delayed until after they begin operation. The company will depend on self-financing from the company's capital, besides sales revenues, which will be used in the project's development. We alsi agreed with shareholders that profits will not be distributed for five years, in order to sustain the project's development.
Have you cooperated with companies and consultants?
Tatweer Misr started the project's preparation last January, and we received offers from 40 master planning companies, which resulted in a shortlist of six companies, and we then chose the Italian architecture company, 5+1AA for their unmatched experience in designing mountain projects around the world. We also cooperated with Projacs for project management and Colliers Company for economic feasibility studies, in addition to other consultants. We also hired an English office for the entertainment activities and its distribution inside the project. The company also contracted with Shaker office for facilities, Osama Okail for roads and Mona Hussein for interior design, to name a few. In addition, we have signed a contract with Rock'N'Rope, managed by Omar Samra and Noura Kafafi, to operate the mountain lodge and hiking activities.
Working with a large number of consultants guarantees that the project moves forward in a professional manner. Despite the high costs at the beginning of the building phase, it guarantees not needing to adjust any parts during the work that might cause higher costs in recon rebuilding. The company pays attention to every detail in order to bring to the project a kind of excellence. The project's main designs take into consideration the needs of every client, starting from little children and people with special needs, to the elderly, which is a main target of all the company's projects. The company is also targeting green architecture, and sought to create that in the master plan of its project in Ain Sokhna, including improving air ventilation, while deciding the buildings' locations, in addition to water treatment and using solar energy in lighting parts of the project, and installing solar water heaters.
What are the main characteristics of Egypt's real estate market?
The Egyptian market is a unique market where all developers start their sales off plan, which gives developers the opportunity to complete their projects through client financing. This is not available in many other countries, which assists client funding. The Egyptian real estate market provides all successful elements. We have a cumulative demand of 5m residential units, besides the demand for 350,000 units annually, while there are only 150,000 units available every year. The real estate market witnessed notable growth since the end of last year due to increased political and security stability, following a recession which lasted for several years. The market expected the demand and growth rates to increase by about 10% in the current year with the return of buying operations, in addition to the fact that real estate is a safe place in which to maintain value, and more stable than other methods of investment, such as the stock market.
The shareholder structure currently supports the company financially, as it includes a number of large economic entities. We can increase capital or invite new shareholders if we need to. In the mid-term plan, the company aims to establish a separate company for each project.
What are the company's other projects?
The company plans to launch the Fouka Bay project on the North Coast next year. The project will be established on 1m sqm. The company also is hoping to finish the consultancy work and designs, while completing the first phase in three years, and the project's development will be completed in five years. Investments for the project amount to EGP 2m. The company's investments in both projects will result in 20,000 direct and indirect job opportunities in the medium term. The company also seeks to participate in the residential section of the Administrative Capital Project. Further, the company is planning to expand and would be interested to invest in any proposed in New Cairo and 6th of October City projects, to establish an integrated residential project.
Which areas are you interested in?
The company is interested in the lands east of New Cairo, and the expansions of 6th of October City, as they need development. Moreover, they represent promising future opportunities. The company is looking for investments in this sector, wherever they are, but they would first be studied based upon the market's needs, before making decisions to develop them.
Tell us more about the company's establishment and the shareholders.
Tatweer Misr was founded in 2014 and specialises in the real estate sector, based upon the real estate and industrial experiences of its founders. The company's total shareholders include 10 large economic entities, including Arafa Group, Dawoud Group and Ahram group. The company's authorised capital is EGP 1.3bn, with EGP 150m in issued capital and EGP 150m in paid-up capital.