Sodic to develop Cairo project in three years
Cairo, March 8, 2012
Egypt's Sodic, the country's third-biggest listed developer, has agreed with the authorities to develop projects on its land bank in West Cairo within three years, in a move that protects the assets from possible legal challenge.
Sodic, a luxury property developer, has been spared much of the legal uncertainty over ownership of its land bank that has hit the country's real estate sector and deepened following President Hosni Mubarak's ouster.
The firm agreed with the authorities that, in order to keep its land in West Cairo safe, it would speed up construction on projects there and deliver within the new timeframe, it said in a statement on Thursday.
"We view the event positively as it effectively removes a legal overhang on Sodic's land bank in West Cairo," investment bank EFG-Hermes said in a note.
"The agreement could help Sodic increase the appeal of its off-plan products, which are now free of legal risks pertaining to the land," the note said, adding the deal could help limit cancellations at the project, Westown.
Egypt's property market was a major driver of foreign investment and growth but is now struggling to recover from legal rows over state land sales.
Sodic has not been directly implicated in the land rows but its former chairman, the father-in-law of Mubarak's eldest son, is facing trial for his role in a questionable land sale.
The company said earlier this week it had launched and sold out 160 units of Westown Residence, in its second and third stage. Sodic turned 141 unit sales into contracts worth 193 million Egyptian pounds ($32 million), bringing net sales of new contracts year-to-date to 420 million pounds.
But the new timeframe would have a negative impact on how easily Sodic can sell the land to potential developers and businesses, analysts say.
The firm swung to a third-quarter loss in November. – Reuters