Orascom Development signs agreement to construct residential project

CAIRO – 12 December 2018: Orascom Development Egypt (ODE) announced signing the final agreement with the New Urban Communities Authorities (NUCA) to co-develop a 1,000 feddan integrated community project in 6th of October City, West Cairo, based on a revenue sharing model.

Orascom clarified in a filing to the Egyptian Exchange (EGX) that NUCA's share of the total residential sales is 26 percent for the first eight years.

As per the agreement, NUCA is entitled to a total cash payment of LE 11.4 billion over eight years and a primary in-kind residential BUA of 130,000 square meters delivered in the eighth year, which implies a land cost of LE 1,580 per square meter on a net present value basis.

The statement added that NUCA will also be entitled to another in-kind residential BUA of 150,000 square meters divided equally on years nine and ten.

“Through this agreement, ODE will be responsible for all construction, development, internal infrastructure, marketing and sales activities. While, NUCA will be contributing with the land alongside all associated external infrastructure to the boundaries of the project,” the statement read.

The statement added that the project is expected to comprise over 19,000 units with a residential built-up area (BUA) of approximately 3.2 million square meters, generating an estimated total residential sales value of approximately LE 77 billion over a period of eight years.

According to the statement, the integrated community is a complete residential complex offering dwelling apartment buildings and standalone units complemented with all necessary functions for a full-scale town such as commercial, educational district, sports club, medical and leisure facilities.

“It is a milestone for the group to witness its first foray in the first home market, Egypt. We are very happy that we were able to successfully execute our strategy that we have communicated in 2016. I am pleased to say that the level of customer interest and demand have been very positive, exceeding our expectations,” CEO of Orascom Development Khaled Bichara.

Orascom Development Egypt operates within the consumer services sector focusing on hotels, resorts and cruise lines with 52 subsidiaries operating across Northern Africa, Middle East and southern Europe.