Real Estate Development in Egypt: Islam A. Khamis of Sorouh Developments Talks Latest News About the New Capital

Interview with Islam A. Khamis, CEO of Sorouh Developments

Tell us about the New Capital project.

Speaking of the New Capital, one of the greatest things I can give you and your audience is a glimpse of the achievement we have had which you can view by going over to Google Earth and see the difference between 2018 and 2022. The progress was extremely fast and huge. There is official confirmation that the government will move to the premises by January 2023. We have managed to build that city and push life into it within four or five years. This city kept 20% of Egypt working during COVID-19. Construction companies and about 120 supporting industries were working during the pandemic. This is one of the things that kept the country rolling and kept everything going on during the pandemic. It is a huge project. It is a city scale, and one can go over to the Google Earth and see how it has advanced, and it is already waiting for life to begin and flourish in the next year.

Does it mean that people will start to live and work in the New Capital in 2023?

The New Capital will begin by moving the government employees to the premises. The light rail train is already up and running and by the start of next year, the monorail train will be up and running as well. We have around 60,000 employees and transportation desks ready which will push life into the veins of the city.

What is the plan of this New Capital and how big is the city going to be? How many people are going to live there?

The plan is to move the decision-making entities, which includes the government, the ministries, the parliament, the senate, the head office of the banks, the embassies and the international corporates, over there. This whole plan was made to relieve the old capital from its traffic. Currently, Greater Cairo has around 19 million people living in it. By any scale, this is a medium size country and not a city in Egypt. So, we need to relieve the old capital from its traffic. It will not be possible moving all these entities and all the people over to the New Capital one by one, it will take some time. While around 3 or 4 million people live in the New Capital, it is designed to host 9 million Egyptians. Four years from now, it will have 30% or 40% of its occupancy up and running. Here in Egypt, we managed to see the revolution change and upgrade done to the road network in the last two or three years. There are a lot of traffic solutions and a lot of new roads where nobody expects a road to be. This was a bold solution from the government, and they were not afraid of facing the community to widen the roads.

What is your competitive advantage?

What makes any developer different is the way he runs his estate after delivery and the way he manages the community. If we look at things in the abstract level, the apartment in the area is maybe similar to an apartment in the less fortunate area. So what you are paying for more is the community and how the developer is managing his community. The New Capital is not in this phase yet because there is no life or community up and running. I believe this will come in the upcoming maybe two years, maximum three years. The competition in the New Capital right now is price sensitive, and this will all change when life starts in the New Capital. The apartment’s day use has been made by Sorouh employees, and all this was to showcase that Sorouh is already working toward fulfilling our promise to our clients which is to give them a good community to live in.

What specific assets does Sorouh Developments have to attract the community? What are your advantages?

The amenities, the facilities and the services to be provided by the developers in the New Capital are currently promises on paper. And all the developers are working hard right now to fulfill these promises. The amenities and the services in the New Capital project are totally identical. We will have a clubhouse, a pool, a kid’s area, a barbecue area and a reading area. I am very proud of what we have accomplished in the mockup apartments. We will have a whole surrounding landscape, lakes and an entrance to give a glimpse of how life will be in the New Capital. Our campaign this year is to show you how the apartments will be. The apartments are totally ready and one can go have a look at them. Sorouh Developments will be the first company in the New Capital to show its clients how life will be in the capital from the gate, to where you will park your car, to where your kids will play and where you will put your pets.

Are you doing anything specific about green initiatives or any sort of environmentally friendly aspects to the designs? Does that make you stand out as well?

All these are the regulations given to us by the New Capital; building on 20% of the land, putting greens and using solar energy panels. No one is putting anything extra over there. I am bragging about giving the Sorouh clients what they were promised which is a good living place and that they can already see the mockup apartment themselves. Four months from now, they will see a glimpse of the whole compound, the full landscape, the parking and the gates.

Who are you targeting as potential customers or investors for your project?

We are targeting both international and local investors. If you look into our history and look into 2022, we have 40% of our contracted sales from Gulf residents from Saudi Arabia, Yemen, United Arab Emirates, Africa and Sudan. Building on that, we need to have knowledge on how to deal with foreign customers, and we need to build more and open more market in Africa as well.

Can you give us some of your success stories?

One of the disadvantages of real estate is that it is a very long-term industry. It is not an FMCG where you open the factory, sell the product, get your money and get the first and second moment of truth within three months. Our industry cycle is maybe five or six years in some of the projects. So putting strategies and getting the result by one year and a half is not easy. We had a project called Citadel. We put a strategy to redesign the project and increase its efficiency on the BUA to GSA level. We also started a very good value engineering project that resulted in 25% cost saving, we have finished the skeleton and the book work, and the project is already standing on its feet. We are now starting the façade finishing works. This is a very nice project, and it is facing the presidential palace in the New Capital. We had a great success on it that also reflected on the sales.

The project was only within the 10% sales progress in the beginning. Right now, we have 70% sales progress. So Citadel was a success story for all the departments here in Sorouh, from the development team who did the redesign and efficiency, the project management team who pushed the contractor to complete it within nine months. Because of the sales team, the sales increased up to 70%, meaning that 60% of the project was completed within four months which enabled us to sell out the administration offices, but we have some leftovers over the deals.

Where is Citadel project based in?

It is situated in New Capital in the financial district. It is overlooking the presidential garden, just beside the ministry’s buildings.

How big is the New Cairo going to be in terms of size and where are all your projects situated?

In Sorouh, we have three projects and all of them are in an extremely good location. We have the Citadel project, it is in the financial district in the New Capital, overlooking the presidential garden. The other project is Entrada which is in the R7 in the New Capital, really accessible. And we have a strip mall, situated in Entrada Avenue. The strip mall is overlooking the New Capital. We also have a very nice college, which is already up and running. The Entrada Avenue project is overlooking the light rail train. So these projects are easily accessible. We also have the expo city, which will provide a very good traffic to the strip mall. Beside it, and very adjacent to it, we have the Entrada project. We have carefully designed the project to get the apartments away from the traffic and away from the crowd.

What is your vision for the company in the next five years?

Our plan is to complete our project and acquire three new projects, one of them to be a second home in the coastal part of Egypt and secondly, to be recognized as one of the top tiers here in Egypt.

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