Leading Real Estate Consultants in Egypt: New Homes

Interview with Mohamed El Banany, VP Business Development at New Homes (Coldwell Banker, Egypt)

Let’s start with New Homes. Where do you stand today?

The new concept of New Homes has been in the market since 2008. We have the brokerage company (under Coldwell Banker) working as usual with re-sale etc. But we created this new company to serve the local expansion, the developments coming out of the city, going into the eastern and western suburbs, to ease the congestion in the downtown area. We created the new concept of New Homes to serve the developers as a marketing arm and as a consultant to consumers, to assist them in choosing from different developments across the country, especially residential, gated communities, or as we call them, ‘compounds’.

So we created the company to cater to this clientele, who are hesitant or do not know which ‘compound’ to go to. We cater to the client as per his budget or his needs. There are a lot of new developments, mega projects, particularly in the east and west of Cairo. Our part is to give consultancy to the consumer with zero commission, the service is free. We cater to each client according to their need and the requirements of payment for a particular development and we do a comparative market analysis of each. The new concept brings a variety of projects under one roof, a one-stop shop. We are now serving about 80 projects around the country, representing more than 24 developers. We assist the hesitant and wary clients, giving them a variety of projects to choose from, best suited to their needs and budget. We also assist the developer as a marketing arm, promoting their projects among buyers. We have a client database which we have been maintaining since 2001. We capitalize on this client base.

You are one of the leaders in the market. Tell me why people should choose you over your competitors. What advantages do you bring? Competition is booming with more players entering your market space.

As I said we are pioneers in the market, even in the brokerage side of the business. We created the Coldwell Banker brand in Egypt in 2001. At that time we were the only international brand in real estate brokerage in Egypt. We have put in all the measures and terminology for this business in the market. We are always perceived as the pioneer and as a professional company that gives credible advice to clients and developers. Additionally, due to our performance in the market since 2001, we have the know-how to assess projects and developers on behalf of the clients. We do our due diligence with each of them and choose the best developers to work with. We don’t just work with any developer. We are very picky. We choose those developers who will be a safe haven for investors. The other thing is the credibility of the company. As we have been in the market for 13 years now, we have a database of clients who trust the brand, they trust our services. That is our competitive edge. We also have the most professional force of real estate consultants, because of the big volume of projects we deal with. Our consultants are better trained, have more exposure to the market and better know-how on the developments that best suit a particular client. The variety of developments we deal with also gives us an edge. Most brokers don’t have access to big developers. Big developers are also picky and look for a company that can assist them in a professional manner.

What are the most interesting projects you have on hand now that people should look into? Especially for the upscale, high-net-worth clients.

The market in Egypt is a very promising market. In the last 10 years or so, development companies have been doing well in terms of return on investment, delivery, providing the best services and facilities. Now the development market is very mature. The developers are very professional about building communities. It’s not so easy in other regions and countries.

The congestion in the downtown area of Cairo is a big reason for market expansion. Everyone wants to get out of downtown and move to the suburbs, east or west. We have very respectable developments coming up in the country now. In the Red Sea area we have El Gouna, which is a masterpiece. It has hotels and all other facilities you can think of. In terms of tourism and investment, it’s a very attractive and saturated destination now.

Orascom is one of the big companies we work with. Here in Egypt we have many developers. We have Palm Hills, SODIC and companies from the Gulf like Al Futtain and Emaar. We have very respectable developers from the region investing and operating huge mega projects in Egypt. Developments in Egypt could be anywhere from 1 million square meters to 10 million square meters. These are huge developments. The major players in real estate development are either local companies or Gulf companies from Kuwait, Saudi or the Emirates. These are companies like Al Futtain, Emaar, Sharbatli, City Stars, etc. We have a very mature market in terms of return on investment. The market is strong in comparison to other countries in the region. It’s very promising.

What are the challenges for the market itself, in terms of regulations, and for your company in particular?

The big challenge for the company and the industry as a whole in the country, is the lack of legislation needed to legalize brokers. We do not as yet have a licensing system for brokers. We are trying to highlight this problem and put a lot of pressure to fix this. There is no legislation to protect the consumer or companies from unlicensed brokers. We have been asking for and pushing for laws to protect the industry and developers from unprofessional, untrained, unlicensed brokers. Another challenge is the clients themselves. They have been dealing with unprofessional brokers who have given them bad service and recommended bad projects. Another challenge is the mortgage. In Egypt we have an active mortgage system but there are too many obstacles and challenges. The interest rate on mortgages is extremely high at this point. I am afraid this can cause a liquidity squeeze in the market. Most developers give a payment schedule between 4 and 7 years now. I think we need to raise the term of the mortgage to 10 or 20 years.

New Homes will soon be opening a showroom in Jeddah.

That’s right.

As for Egypt itself, what is your vision? What would you like to achieve?

Our vision for this year is to reach a sales volume of 2.5 billion Egyptian Pounds, on behalf of all the developers we are working with. Currently we have 3 offices in Egypt. By the middle of this year we are opening a big showroom that serves our concept of having many developments under roof. It will have a display space that will highlight the projects we have on hand. It will be both virtual and with physical models and brochures. We hope to have this showroom open by next June. It will be a mega showroom with the latest technology, a marketing section and a display of all our projects.

We are also opening another showroom in Eastern Egypt. One serves the west. The other 3 branches serve other districts. So hopefully by the end of the year we will have 5 branches. We plan to have more than 80 consultants. Right now we have 52 agents in the 3 branches.

We are also opening a mega showroom in Saudi Arabia, in Jeddah. We are trying to diversify our business. We want to serve Egyptians and Gulf nations from Saudi Arabia. This will give us a lot of credibility and add liquidity with money from the Gulf invested in Egypt and vice versa. There are many Egyptians working in the Gulf who would appreciate a secure investment in Egypt. That will be done through our showroom in Jeddah.

Is there anything else you would like to add?

Let me summarize again our competitive advantages. Firstly, we have well-trained consultants. We have more than 50 consultants now. Secondly, we have the largest client and investor database, based on our work in the market since 2001. Thirdly, we have a zero commission service. The consultancy is free to the buyer. Fourthly, we work with the most credible developers in Egypt, covering a lot of the country, Cairo, the North Coast and the Red Sea area.