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Egypt's Wadi Degla Developments (WDD) plans to double its spend on construction in 2023 compared to the previous year, its Deputy CEO said.
Raymond Ahdy told Zawya Projects that the company spend one billion Egyptian pounds ($40 million) for construction works in 2022 and is planning to pump EGP2 billion ($81 million) into construction for various projects in 2023.
The developer recently launched EGP1.5 billion ($61 million) ‘Club Town’ residential project in Maadi, Cairo.
Ahdy said the 550-unit project, spread over an area of 140,000 square metres, comprises of apartment and duplexes, and would be delivered in three phases. He said the first phase comprises of 124 units.
WDD is aiming to deliver a total of 2,000 units across all its projects in 2023.
“In 2021, WDD had delivered 1,400 residential units; in 2022, we have delivered 1,660 units and in 2023, we plan to deliver 1,800 units,” he said.
The Deputy CEO pointed out that 2022 has been an extremely difficult year for all sectors as inflation reached 18.7 percent (YoY) in November, the highest recorded in the last four years.
“This has led to a surge in operational and financing costs, while construction costs increased by an average of 33 percent,” he said.
The challenging business environment has continued to evolve due to entry of new developers, escalating costs and continued geopolitical instability.
“This is a reflection of the same market conditions in 2018 that led Wadi Degla Developments to embark on a turnaround strategy. The result is that today, the company is well positioned to proactively adapt and respond to these market externalities and most importantly, fulfil its commitments to customers,” said Ahdy.
He said the turnaround strategy had focussed on improving operational capability through better resource allocation; developing a more balanced diversified portfolio to reduce the risks associated with specific asset classes, and digitalisation to improve decision making and service quality.
These initiatives improved project delivery and contributed to better sales with 2022 sales touching EGP1.4 billion ($57 million).
He said the company has drawn up an ambitious plan, called The Way Forward, which targets new asset classes in hospitality and commercial segments, emphasises recurring income projects, and expansion within Egypt aligned with the government’s urbanisation plans in Greater Cairo, Upper Egypt, North Coast and Red Sea regions.
WDD has invested EGP25.4 billion ($1.2 billion) in 15 residential, resort and commercial projects to date.
(1 US Dollar = 24.75 Egyptian Pounds)
(Writing by Marwa Abo Almajd; Editing by Anoop Menon)
