Palm Hills Developments, a Cairo-based real estate business led by Egyptian billionaire Yasseen Mansour, has approved the issuance of a EGP3.25-billion ($206.5 million) Sukuk bond to support one of its Egyptian real estate projects.
The Sharia-compliant bond, which will be issued in collaboration with Sarwa Capital, an Egyptian pioneer of consumer and structured finance solutions, will be used to fund its Badya creative city project, which is positioned in the heart of the new 6th of October City.
Badya is the first city in the Middle East and North Africa to adhere to the UN Sustainable Development Goals, making it Egypt’s pinnacle city.
Palm Hills’ entry into the Sharia-compliant Sukuk bond market is part of the company’s strategic development strategy, as it seeks to strengthen its leadership position in Egypt’s real estate sector.
According to sources close to the company, the bond offering will put the property developer on track to achieve its goals of bridging Egypt’s property gap and bringing creative residential designs to property development in the MENA region.
The creative city initiative connects with current attempts to solve Egypt’s water crisis, as it claims to save 30 percent of water and power use through innovative eco-friendly solutions that will allow sustainable living.
The real estate project, which comprises a villa and a garden apartment, will be offered to purchasers and consumers with the aim of reducing operational costs by 20 percent by sourcing 30 percent of its energy needs from renewable sources.
In addition to the scheduled offering, the board agreed to reduce the group’s share capital by writing down 40.65 million treasury shares.
The latest action comes roughly three months after the real estate business announced the completion of its seventh securitization bond issue program of about EGP1.1 billion ($70 million), which was initiated to support operational expenses and working capital requirements.
Palm Hills Development is a well-known real estate developer with active investments in Egypt. The firm creates integrated residential, commercial and resort complexes.
Palm Hills Development is an operating subsidiary of Mansour Group, one of Egypt’s major conglomerates, and is overseen by Mansour, who has a beneficial 4.68-percent share in the firm.
Palm Hills shares were at EGP1.7 ($0.108) as of press time on Feb. 18, giving the Egypt-based real estate business a valuation of EGP5.2 billion ($330.4 million).
The market value of Mansour’s stock is now worth EGP243.4 million ($15.5 million).
