Capitalizing on goodwill
SODIC’s latest land acquisition extends outlook visibility; pass on the high land cost to property buyers. The new land of 1.26mn sqm (recently branded as Villette project) was acquired last June at cEGP2,200k/sqm (incl. interest) and is located in a prime location in East Cairo, near the company’s Eastown development. The acquisition addressed the market’s main concern regarding the contracting land bank and provides the company with some latitude as current land bank is adequate for the next 5-6 years (excl. Al Yosr land). However, the high acquisition price paid by the company could impact the project’s feasibility. To maintain a GPM of 30-35%, selling prices will be expected to start at cEGP10k/sqm and grow by an average of 10% p.a. to reach a total residential sales target of cEGP10bn over 5 years. This could raise some questions about affordability in the project’s later years as prices are expected to reach cEGP14,500/sqm. Nonetheless, we believe that SODIC will continue to capitalize on its brand equity and pass on the high land acquisition costs to end clients, particularly given the mounting appetite for residential properties in New Cairo. It is worth noting that the company managed to successfully pass on the increase in Eastown-related costs and yet without impacting overall demand (via increasing prices by c40% in one year and reconfiguring the master plan to increase residential BUA).
Sixth of October Development and Investment Co SAE. Sixth of October Development and Investment Company SAE (SODIC) is an Egypt-based company engaged in real estate development projects and operations. The Company is specialized in lands acquisition and subdivision for the purpose of properties development, selling or leasing; construction and integrated construction activities and operations as well as other supplementary works; building, selling and leasing all various kinds of real estate properties; urban communities development; working in the field of tourist development and in all tourist establishments field including building , managing , selling or utilizing hotels, motels, restaurants and tourist villages, as well as sporting, entertainment, medical and educational buildings. The Company's subsidiaries include, among others, SODIC Real Estate Services Company, Sixth of October for Development & Real Estate Projects and Move-In for Advanced Contracting Co SAE.
CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.
Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.
CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.
The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.
CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.
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