Palm Hills still negotiating 500-acre development project in New Cairo
A scale model of the new Egyptian capital displayed at the congress hall in the Red Sea resort of Sharm el-Sheikh on March 14, 2015. (AFP/Khaled Desouki)
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Palm Hills Developments (PHD) announced on Monday that it is still negotiating with the Ministry of Housing on developing 500 acres in New Cairo.
The announcement came despite an initial agreement on the project that was made at the March 2015 Economic Summit.
The project was initialised via a memorandum of understanding (MoU) signed at the Economic Summit, held in Sharm El-Sheikh, with the Ministry of Housing for the co-development of the integrated project in New Cairo.
During the summit, Palm Hills signed two MoUs with the aim of expanding its presence in Egypt. The first MoU was regarding the exclusive co-development of an integrated community in 6th of October City, covering a total area of 10,000 acres.
In February, Palm Hills and Madinet Nasr for Housing and Development (MNHD) signed an MoU to establish an integrated residential project on the Cairo-Suez desert road.
It is planned that the project will be constructed on 103.25 feddans of land owned by the MNHD. The project will be developed over four stages, ranging between nine and 10 years. The first stage of the project will be completed after four years, and will include residential buildings with four to six floors.
The MNHD will offer the land and act as the project’s master developer, conducting the networking, infrastructure and utilities work. Palm Hills will be responsible for the project’s design, marketing, implementation and delivery to clients.
The revenues expected from the project will range between EGP 4.6 billion and EGP 5.5 billion, of which 64 percent will go to Palm Hills and 36 percent to the MNHD.
Palm Hills registered net profits of EGP 646 million in the first half (H1) of 2015, a 381 percent annual increase. On a quarterly basis, Palm Hills’ net profits in the second quarter (Q2) of 2015 quadrupled in comparison to Q2 of 2014, recording EGP 431.2 million, compared with EGP 84.7 million recorded in the same period the year before.
Also in February, Palm Hills’ general assembly approved the increase in the company’s capital by EGP 1.648 billion, from EGP 2.69 billion to EGP 4.34 billion. Its plan to increase its capital is due to a desire to expand in both the residential and commercial sectors, according to Tarek Abdel Rahman, Co-CEO of Palm Hills Developments.
In November 2014, UAE-based Aabar Investments PJS acquired a 5.1 percent stake in Palm Hills. The Egyptian real estate company said that the deal reflects the Egyptian real estate sector’s ability to attract regional, as well as international, investments.
Following the 25 January Revolution, the company faced some hurdles regarding land ownership. In June, the company settled its dispute with the cabinet and the New Urban Communities Authority, resuming its activities at two sites in Sheikh Zayed and 6th of October City.
By Doaa Farid
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