Nasr City Housing to start $3.4bn project
Cairo, May 31, 2011
Egyptian property developer Nasr City Housing is preparing to start work on its 3.5 million square metre, $3.4 billion-plus Tigan project, a report said.
Tigan will include mixed-use housing units and is expected to be completed in seven years, the report in Al-Mal newspaper said.
The firm, formerly a state-run company and now about 30 percent-owned by investment bank Beltone Financial's private equity arm, has delayed finalising the detailed planning of the project because of Egypt's political turmoil, the paper said.
'The firm is getting ready to certify a detailed plan for the project from the governorate of Cairo and then will start executing it,' the paper quoted Ibrahim el-Sheeneky, a company executive, as saying.
The project is expected to cost over 20 billion Egyptian pounds ($3.4 billion), he added.
Egypt's real estate sector has been hit hard by the collapse of President Hosni Mubarak's regime and a string of legal challenges to property firms' land holdings.
Firms like Nasr City Housing are seen as relatively well placed to weather the crisis because their older land banks are seen as safer from the legal disputes and their balance sheets stronger.
'We like the company's limited exposure to current political risks, readiness for retail land sales, diversified management team, connection to the current government, and unleveraged balance sheet,' EFG-Hermes wrote in a note on May 25.
Nasr City Housing acquired most of its land bank through presidential decrees, mostly before the 1980s, and analysts say it is also positioned to benefit from pent-up demand for middle income and low-income housing. - Reuters