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Real Estate Partnerships Answer To Easier Land Portfolio Increase?

Posted by Staff Reporter on Apr 18, 2016 09:35 AM EDT
Egypt, officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia, via a land bridge formed by the Sinai Peninsula. more big
It is the world's only contiguous Eurafrasian nation. (Photo : Ed Giles / Stringer)

Maged Helmy, the Wadi Degla Developments CEO, commented that company partnerships in the real estate industry are an effective method of increasing land portfolios amidst high land prices. Partnerships can allocate a capital fund not for a purchase of land, but to facilitate business development.

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The CEO shared that public corporations must offer private sector land holdings in order to form partnership ownerships. He further claimed that public corporations often do not carry the fundamental capacity to develop purchased lands. Through partnerships, increased rate of development and profits are possible, according to Helmy.

According to Helmy, "Partnerships between the government and developers are a sustainable pairing for the real estate sector. However, this requires offering land and projects to experienced investors."

The Sixth of October Development & Investment Company CEO Maged Sherif, on the other hand, supported the company partnerships assumptions, according to a feature by The Daily News  Egypt. The number of land sold during the latest auction limited the possible developments since the majority of the capital was specifically for purchase instead of development, Sherif shared.

In March, Heliopolis Housing and SODIC signed a co-development contract for New Heliopolis, East Cairo's 655 acres.

SODIC was present in Heliopolis Housing's most recent auction in order to increase the company's land portfolio. Also, it is aimed towards pursuing new growth opportunities.

Meanwhile, Abraj Misr's commercial director Tarek Bahaa commented that it has always been difficult to implement partnerships because of possible conflict of ideas, corporate development strategies, and interests, according to a feature by FT.

Bahaa also said that land's high price and scarcity have pushed real estate companies towards exiting the market. This has left their workers unemployed and a few homebuyer demographics houseless.

Wouter Molman, the Cityscape Group director, said that there are high land prices. Although the Ministry of Housing and New Urban Communities Authority have offered parcels of land, several silent auctions are increasing land prices, cost of raw materials, and rate of inflation.

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