Thursday, Sep 19, 2013
By Reem Abdellatif
CAIRO- Egypt's real estate giant, Talaat Moustafa Group (TMGH.CI), said Thursday it is negotiating a 1.8 billion Egyptian pound ($261 million) loan with banks to expand its Rehab property development on the outskirts of Cairo's eastern desert.
"The company has applied to acquire a long-term loan to fund construction to expand its Rehab development project," TMG said in a statement published on its website.
TMG added that talks to raise EGP1.2 billion to finance a shopping mall in Madinaty, a gated community adjacent to Rehab, are currently stalled.
Like most property developers in Egypt, the company's finances suffered as political unrest continued to batter Egypt's economy after the 2011 uprising that toppled former leader Hosni Mubarak.
Real estate analysts believe the company's decision to apply for loans at this time was encouraged by the central bank's move to cut key interest rates last month by 50 basis points.
"There is more liquidity in the market and real estate companies are looking at acquiring credit in order to expand," said Harshjit Oza, assistant director of research at Naeem Holding for Investments.
The company is mainly looking to expand its primary home units. Mr. Oza believes TMG's decision will encourage other real estate companies to seek credit in order to meet Egypt's growing demand for middle and upper income housing.
"There's more demand than supply now, with a growing youth population and urbanization," he said.
With billions of dollars in aid pledged from its Gulf Arab neighbors, Egypt's central bank is expected to cut interest rates further in its monthly monetary policy meeting Thursday as the country's interim government continues to adopt what it has called an expansionist economic policy to boost the market.
Write to Reem Abdellatif at reem.abdellatif@dowjones.com
(END) Dow Jones Newswires
19-09-13 1537GMT
