Palm Hills Developments | January 2015 Investor Presentation April 2019
1 Market Overview
M ARKET O VERVIEW Egypt’s Unique Dynamics and Urbanization Trends ♦ Demand is estimated in Housing Units Supply Evolution (‘000) 2017 Housing Units Supply Breakdown by Class (‘000) the upper middle to high end market segments to be 7% - 9% of annual 352 marriages or 70 - 90k 146 units per annum 277 264 ♦ Supply as reported by 96 196 184 CAPMAS is around 35k 177 146 units for the same 136 segments 25 ♦ Market gap estimated at 10 0.0 35 - 55k units (primary demand) in addition to 2010 2011 2012 2013 2014 2015 2016 2017 Low Economic Middle Upper Middle High End those moving from Cairo Potential Opportunities 2015 Mortgage Penetration Rate (%) to the suburbs estimated at another 30 - 40k units Targeting Households with annual Upper-mid/Luxury income of Housing 19.4% USD65 - 125K 18.3% Targeting Households with annual Middle/Upper income of Housing 1 USD25 - 65K 9.1% Targeting Households with annual Middle income of Housing USD10 - 25K 1.6% 1.2% Targeting Households with annual 0.2% Low Cost income of Housing USD1.7 - 2.5K UAE Morocco Tunisia Saudi Qatar Egypt Arabia Source: CAPMAS, FRA, and Jones Lang LaSalle Cairo Real Estate Market Overview 2Q2017 3 Palm Hills Developments | 2019 | Investor Presentation 1 Assumed by PHD
M ARKET O VERVIEW …And is Expected to Maintain Its Growth Profile Over the Foreseeable Future Egypt Boasts an Attractive Demographic Profile… ♦ Egyptians are expecting a substantial influx of Growing Population (mn) Increasing Marriages (‘000) High Urbanization Rates (%) liquidity due to the following: 46.6% 104 46.2% ▪ The maturity of the 1,061 102 45.9% 1,048 20% 18-month CDs 100 1,012 1,021 1,030 1,038 45.5% 98 which have attracted 45.2% 96 44.9% 94 more than EGP840 bn 44.7% 92 999 44.4% 90 ▪ The maturity of the 986 Suez Canal CDs which have attracted more than EGP64 bn 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 ▪ Lowering interest rates as inflation continues to ease …Underpinned by Rising Prosperity ▪ In addition to the post Lending Rates (%) Disposable Income (EGP bn) Private Consumption (EGP bn) revolution baby boom, A portion of the freed up liquidity resulting from the the long term 20% yield CDs maturing in 2018 will spill over into the underlying real estate sector 7,106 demographics of Egypt 19.75% 7,687 6,291 6,810 will continue to support 5,570 16.75% 15.75% 6,034 4,929 the Egyptian real estate 5,344 13.25% 4,313 4,674 11.25%11.25% 11.25%11.25% 3,674 sector and ensure a 3,340 3,988 3,069 sustainable and stable 2,267 2,480 stream of demand for housing 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023 2018E - 2023E CAGR Source: IMF, Euro-monitor and Bloomberg 4 Palm Hills Developments | 2019 | Investor Presentation
M ARKET O VERVIEW Resilient Real Estate Market Expected to Continue in FY2019 Contracted Sales Evolution (EGP mn) 1 ♦ The Egyptian real estate market remained resilient ▪ Egypt Economic despite the political turmoil Development and economic challenges Conference (“EEDC”) ▪ Headline CPI launched ♦ During times of high inflation reached its ▪ New Suez Canal highest level since and currency depreciation, launched 2011 in Jul 2017 investors shifted towards real ▪ Russian plane crash ▪ Subsidy cuts ▪ Anti-Morsi estate investments as a hedge ▪ VAT system protests begin 119,502 to protect the value of their announced which led to wealth ▪ EGP flotation Morsi being ▪ Egypt plane crash ousted 105,287 ♦ The Egyptian real estate sector ▪ Policy rates hikes is expected to be on a fast- ▪ Sisi elected track growth trajectory, 90,707 ▪ January 25 as president spurred by: ▪ Sinai Revolution explosion ▪ Robust economic growth ▪ President on the back of economic Morsi 64,996 and political reforms assumes power ▪ The government 52,684 encouraging expansion into surrounding areas, 42,074 especially to the east and west of the city 29,086 ▪ Rising purchasing power 19,600 and accelerated 16,044 household formation, 12,400 especially for the middle class, as economic growth has accelerated 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2010 – 2017 CAGR 2017 – 2019 CAGR Source: Companies filings, and research reports 1 Market contracted sales are calculated as the sum of contracted sales of PHD, MNHD, Emaar Misr, SODIC, TMG and the 5 Palm Hills Developments | 2019 | Investor Presentation remaining players are assumed to contribute to 50% of the market
2 PHD in Brief
PHD IN B RIEF The Largest Land Bank 1 in Egypt of 41 mn sqm Completed Projects Raw Land Developed Area Under Residential Developed Area Under Land Area (000 Residential Land Commercial Area Land Area Commercial Area Project Name Residential Area Development Project Name Land Area (000 Residential Land Development sqm) Area (000 sqm) (000 sqm) (000 sqm) (000 sqm) (000 sqm) (000 sqm) sqm) (000 sqm) (000 sqm) Phase 1-5 & - - - - Botanica 7,138 Cascade, Bamboo, 1,659 1,542 1,542 - 98 - - - - Riyadh, KSA 5,000 Goldan Palm - - - - Bamboo Extension 168 168 168 - - Red Sea 92 The Village 105 105 105 - - Subtotal - - - - 12,230 Village Avenue 35 35 35 - - Village Gate 146 131 101 10 16 Total Land Bank 40,657 25,889 8,917 5,695 2,524 CASA 294 294 294 - - Village Garden 297 285 267 - 13 Katameya Raw Land Strategy Palm Hills Katameya 275 275 173 37 - ▪ Extension Botanica land plot: PHD’s Management learned about the reallocation and rezoning of some state - Hacienda White 1 216 199 199 0 17 owned land on Cairo Alexandria highway to the New Urban Communities Authority (“NUCA”) in Subtotal 3,195 3,034 2,884 47 144 accordance with the recent presidential decrees, which will positively impact Botanica’s allowable built up area and valuation as part of the New Sphinx City, given Botanica’s proximity to Sphinx Projects Under Development/Launched Projects International Airport. The Company awaits official communication from NUCA in that regards. Developed Area Under ▪ Land Area Residential Land Commercial Area Saudi Arabia land plot: Held for sale. Project Name Residential Area Development (000 sqm) Area (000 sqm) (000 sqm) ▪ The Company sold one of its non-core land plots (Galala plot in the North Coast) spreading 487k (000 sqm) (000 sqm) Palm Parks 470 418 259 159 52 sqm to a non-listed property developer, for a total consideration of EGP375 mn including capital Golf Views 2,061 2,049 1,798 251 12 gain of EGP218 mn during 4Q2017. Golf Extension 1,012 958 958 - 54 Woodville 289 251 - 251 38 Recently launched projects. Palm Valley 238 206 - 206 11 Palm Hills Katameya 928 928 904 - 24 1 Land Bank data as at December 31, 2018, which excludes 205 feddan in West Cairo. Management Palm Hills Katameya 159 159 - 159 - expects to conclude the co-development agreement during 1H2019. Extension "Phase 2" 2 PHD signed the co-development agreement with NUCA on September 11, 2017 Palm Hills New Cairo 2,100 1,680 - 2,100 420 3 Palm Hills Alexandria project’s soft launch was held mid December 2018 Capital Gardens 434 434 - 434 - The Crown 798 734 - 734 64 Hacienda West 585 585 - 585 - Badya (2) 12,600 11,088 - - 1,512 Alexandria (3) 567 482 - 85 Hacienda Bay 2,519 2,411 1,911 500 108 Hacienda White 2 472 472 203 269 - Subtotal 25,232 22,855 6,033 5,648 2,380 7 Palm Hills Developments | 2019 | Investor Presentation
Recommend
More recommend
