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Palm Hills Developments, a Cairo-based real estate firm led by Egyptian billionaire Yasseen Mansour, has issued a Sukuk bond for EGP3.25 billion ($206.5 million) to fund its Egyptian real estate projects.
The news comes nearly four weeks after the Egyptian real estate developer’s board of directors approved the issuing of the Sharia-compliant bond, which will be issued in partnership with Tharwa Securitization Company.
Palm Hills Development is a well-known real estate developer with active investments in Egypt. It develops residential, commercial and resort complexes. The company operates as a subsidiary of Mansour Group, one of Egypt’s major conglomerates, and is led by Mansour, who has a beneficial 4.68-percent share in the firm.
The proceeds from the issuing of Sukuk bonds will be used to build Palm Hills’ Badya creative city project, which is located in the heart of Egypt’s new 6th of October City, Africa’s second-largest economy.
Badya is Egypt’s pinnacle city since it is the first city in the Middle East and North Africa to conform to the UN Sustainable Development Goals.
The creative city program is linked to current efforts to address Egypt’s water issue, as it claims to save 30 percent of water and electricity consumption through innovative eco-friendly solutions that would allow for sustainable living.
Palm Hills’ debut into the Sharia-compliant Sukuk bond market is part of the business’s growth strategy, which will put the company on pace to meet its aims of bridging Egypt’s property gap and introducing new residential designs to property development in the Middle East and North Africa.
The cash proceeds from the Sukuk bond offering will put the Egyptian real estate firm on track for long-term profits growth as it strives to create value to owners and shareholders.
Due to an increase in demand for real estate assets during the year, the Cairo-based real estate firm recorded a 14.26-percent rise in profit from EGP749.17 million ($47.7 million) in 2020 to EGP856.06 million ($54.5 million) at the end of 2021.
As a consequence of the group’s strong financial performance, the board of directors proposed a cash dividend distribution of EGP0.10 ($0.00636) per share for 2021, totaling EGP304.05 million ($19.35 million) for shareholders.
The board also announced intentions to spend EGP3.8 billion ($242 million) in 2022 to solidify the company’s position in the real estate market and unlock its potential as a going concern in an effort to put the company’s operations on the path of growth.
