SODIC targets recurring revenue of EGP 250m over the next four years through administrative and commercial components, CEO Maged Sherif said. He told Daily News Egypt, on the sidelines of the EFG Hermes 12th Annual One on One Conference, the first asset owned and currently managed by the company was the Westown Hub on area of 13,000 sqm. Approximately 60% of the Westown Hub project is leased and the company is currently developing an area of 100,000 sqm, 90,000 sqm of which will be used to establish commercial and administrative units. Sherif said the company signed a partnership agreement with Heliopolis Company for Housing and Development (HCHD) to develop 655 acres (2.751m sqm) and establish an integrated housing project. HCHD will receive 30% of revenues from the housing units while SODIC will receive 70%. Revenues from the administrative and commercial units and facilities will be divided between HCHD and SODIC, with 30.2% for the former and 69.8% for SODIC. Sherif said SODIC will be in charge of linking the project to a facilities network, while HCHD will be responsible for all internal facilities and networks. The project will raise the company's land portfolio to over 6m sqm. One of the main advantages of jointly developed projects is relieving developers from the burden of installments to pay off the value of the land at the beginning of the project. SODIC will complete the first phase of the project without borrowing funds, but may resort to it if necessary. A number of projects in the west and east of Cairo will be put forward throughout the year, as well as the second and final phase of the Caesar project in the North Coast, which stretches on an area of up to 100 acres. As for the impact of US dollar on the company's projects, Sherif revealed that most of the units under development by the company are semi-finished and therefore imported component are very limited. Moreover, the ratio of units that are delivered fully finished constitute only 3% of the company's business size. Despite his concern over the dollar crisis, Sherif said that irrespectively, Egyptians love to invest in real estate, which represents a safe haven from the declining value of the Egyptian pound. Furthermore, the actual demand for real estate makes the market relatively immune to market fluctuations. Rgearding the possibility of offering global depositary receipts (GDRs) for SODIC in the London Stock Exchange (LSX), Sherif said SODIC has already discussed this but decided to defer the decision until further notice. Moreover, SODIC CFO Omar El-Hamwi said the current prices and lack of liquidity are discouraging for such step. He said the size of the company's liquidity is currently EGP 1.7bn, while its commitments amount to approximately EGP 1.2bn. Sherif said the high prices have led to changes in market dynamics, another advantage for SODIC, since the company interacts with and responds to these changes and the patterns of demand in the market. In response to a question on expansion to other sectors, such as health and education, to reduce risk, Sherif said in light of the difficult conditions experienced by the market, the company's strategy is to focus on the its core business.
