The Egyptian developer Palm Hills Development is planning to set up a base in Dubai.
The company confirmed that its board has given the green light to establish a Dubai-based company, which will be used for “any potential future project/investment opportunity outside Egypt”.
However, it declined to comment on future plans, including whether it is currently looking to acquire land for Dubai-based schemes.
Palm Hills is one of Egypt’s biggest property developers, with a current market capitalisation of about US$620 million. It operates at the premium end of the market, according to Harshjit Oza, an analyst with Egypt’s Naeem Brokerage.
He believes that any potential move into the UAE would be a long-term affair, as “they have their plates full with what they are doing in Egypt”.
The company currently has several major projects under way and is set to oversee two huge projects for New Urban Communities Authority (Nuca) – an Egyptian government agency in charge of delivering new cities.
This year, it is set to launch a 2.1 million square metre project with Nuca in East Cairo and is in talks with the authority over a deal to deliver a 4.2 million sq metres project in West Cairo.
Last week, Palm Hills revealed a 49 per cent year-on-year increase in first quarter revenue to 1.1 billion Egyptian pounds (Dh454m). It also upgraded its revenue guidance estimate for the whole of 2016 to 7bn Egyptian pounds – up from 5bn pounds previously.
It also said that new sales to clients in the quarter increased by 62 per cent to 2.2bn Egyptian pounds – its strongest ever quarter for bookings.
“All of the developers in Egypt, because of the demand and the growth, are quite busy with what’s going on [locally],” said Mr Oza.
He added that any plans to buy land or assets overseas could be hampered by ongoing shortages of foreign currency. Despite the pound’s recent devaluation, dollars still change hands on the black market at a much higher rate [11 pounds to the dollar] than the official rate of [8.8 pounds], making large-scale transfers difficult.
Mr Oza said that opening an office in Dubai still made sense, as it allowed Palm Hills to directly target Egyptian expats looking to buy homes rather than dealing with third parties, and in the long term it makes sense to pursue opportunities outside of its home market.
“They need to diversify a bit,” he said.
The company had previously expanded beyond its borders before the 2011 revolution, but was later forced to rein in its expansion plans to pay down spiralling debts. The company retains a 5 million square metres plot in Saudi Arabia that has yet to be either developed or sold off.
mfahy@thenational.ae
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