Real Estate and Construction in Egypt: Sherif Hamouda Discusses Upcoming Developments by GV Group

Interview with Sherif Hamouda, Chairman of GV Group

Can you provide an overview of the real estate and construction sector in Egypt and how GV Group fits within it?

During the pandemic, the market in Egypt was very stable and was doing very well. It is completely different from the other countries in the region. What we did in these three years was very good for us, for the market, and for foreign investors and big companies who were in the market. The market confirmed that it is large enough and mature enough that it can handle more projects and developers making big numbers. Last year, the sales revenue from off plan sales was about 285 billion Egyptian pounds in addition to resale. However, there are still some challenges. First, the cost is increasing day by day. Recently, there was another devaluation to the currency which caused a very direct, hard effect. It had a strong impact on the older real estate companies because you are building a project for five or six years and prices are not stable and you are selling at a fixed price. The market is difficult, but it is also quite big. Moreover, new products and new cities like the New Capital and New Alamein have a big advantage in the market because they are in different areas and they are attracting different generations and different nationalities. The offers are also very high. This takes us to another position in the market. Because the market is so big, this is an opportunity for these companies to have different products and to be specialized in different roles. For us, we work hard to prepare our projects. We did not work in a traditional way to buy land from the government in an area where all developers are competing. We worked hard to prepare underdeveloped areas and we consider this to be the main task of us as a developer – to be different like this. We do not only work in Cairo or the North Coast, we are also working in many other cities in Egypt which gives us an advantage. Now, with the devaluation of the currency, it is difficult to predict what is going to happen so this year might be a bit more challenging.

What are your competitive advantages?

Times Square Port Said is a big investment and a very unique project consisting of 2500 apartment units in Egyptian Northgate. It has a huge outlet and administration buildings. We won an architectural award for this project. The business model of this project is unique and different. Seven years ago, this land was very underdeveloped and quite poor. With the support of the government and the hard work of the governor of Port Said, we changed a very poor area to a new Times Square. It was quite ambitious and nobody believed we could do that. Now, 40% of the project is completed and people are already booking. The city itself is very honored to have this project. North Coast is one of the most beautiful beaches in the world. Development started there in the 80s. After the revolutions and instability in 2017, everyone started development and it was a long distance from Cairo and Alexandria. The North Cast area was only used for three months in the summer so investing there and having the area be dead for nine months out of the year was a big problem. We wanted to make this area more attractive for the world. We invested a lot and decided to go back to the areas between Alexandria and Alamein. We have four projects in the area between Alexandria and Alamein. We want to make this area have a very good product at a very attractive price point. We are designing these projects to be a first home that can also be used in the summertime. Another project we have is Katameya where we have a very nice piece of land in a very important area in Cairo which is also one of the most expensive areas in the city. We presented this project in MIPIM and everybody liked it. It is a Banyan Tree Hotel with residential units by one of the most unique and exclusive brands. Finally, we have Tarboul City. When we started working on Tarboul seven years ago, nobody believed that it was going to happen. We succeeded in creating a city for investors from all over the world to invest in. We think we are different and we want to be different. The variety in our products and the sectors we are working in are what makes us different.

What are you offering at Tarboul that is going to attract clients?

We started preparing the project six or seven years ago. The project is a 109 million square meter industrial park and industrial city. We worked hard to obtain all the environmental and industrial licenses. The project is located in a very unique location. It is 30 kilometers outside of Cairo, 70 kilometers away from New Cairo, and 65 kilometers from the east of Cairo. The location is perfect over the Nile River and is bordered by the North, Middle and South which makes it a prime location. The design of a master plan for such a project was not easy. We had many engineers, architects, and experts working with us. We managed to create a design and a business model that are different. When discussing with our partners about the future of this project, we decided that Tarboul City would be a green, smart, livable, industrial city. The location is already green. Smart is the future so we are preparing a data center and more to make this a smart city. It is also important to make the city livable since livability is one of the biggest problems in Egypt. One of the biggest problems in Egypt is traffic. We designed this city so everyone from workers to high end will be accommodated. Finally, it is an industrial city. At Tarboul, we have 12 industrial parks with different conditions and zones with different regulations, etc. Now, we have the final master plan with more than 150 factories already booked. We have many countries that want to move factories to our facilities in Tarboul to be in a big market like Egypt and Africa. It is a very good sign that we are going the right way.

What methods are you going to use to make the city green?

Building a green city is not easy. Very soon, we will announce international consultants and project management that will work with us at Tarboul to reach our commitments to be a green city and we cannot do it alone. To make the city green, we will focus on environmental control, hygienic control, waste management, power supply, etc. Everything has to be green, even the natural gas which many companies consider not to be green. Electric cars will also have a big potential in our city. Finally, one of the zones is Food Valley. We put ourselves under the regulation of the Food Safety Authority in Egypt. We confirmed with all the food factories in Tarboul that the first condition is to be on the whitelist which means everyone must be green and the factory should follow all necessary specifications. We also have one of the megaprojects which is a B2B hypermarket for the trading of fruits, vegetables, and fish. We are making it one of the biggest hubs in Egypt for all these commodities at Tarboul. It gathers 2000 big traders together in one place with all their products which also comes with waste. This is why we need waste management and control of the supply. We are targeting to obtain all the licenses and certificates from the authorized organizations for our city.

What is your vision for the medium term, three to five years?

We worked hard for years to have this land and this project. Now, it is a big challenge to succeed and deliver on what you promise. It is not easy to succeed in a market that is not very stable. We are changing the system of the company to be a real corporate group. Secondly, we are raising funds and preparing what we need financially. Regarding the structure of GV Group, the people we are hiring and new people who are joining, we are asking for a very high caliber to be responsible for all developments in the Group. We are working hard to be ready for this challenge and this opportunity.

What is one success story that you are particularly proud of?

GV Group was established in 1984. We have worked in the market here in Egypt and also in Africa for many years. We have delivered more than 100 projects as a construction company. We are always doing something new and different. We invested a lot in one of our companies to be responsible for R&D and today, we have the biggest company in Egypt in medical waste. Before, it was garbage nobody cared about, but now, it is a corporate business. We are the first to attack the market with waste heat recovery power stations. Now, we are preparing for recycling and we are working on a huge project which is very good for the economy which we are very honored to be a part of. We had a big business in Sudan and other African countries working in and developing trade finance. We have now developed the meat industry in Egypt by building 150 automatic slaughterhouses, tracking systems, traceability systems for the meat, etc. It is not as famous as the real estate business but we are very happy and excited to have such a project. In a big country like Egypt, meat quality is not at the same level as what you would find internationally. Our company is now responsible for changing the system of tracking, traceability, trading, and slaughterhouses.

What is your inspiration? What drives you to do what you do?

I love this country and I have read a lot about our history. I also worked in the public sector for many years as a politician, especially during the years of the revolutions in Egypt. There are many things in this country we can do for better development and to improve our position. I believe in Egypt and its location. I also believe that Egypt is different. I am very ambitious and I work very hard.

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