Dubai: Orascom Development is definitely not short of land – not when it has 50 million square metres to build still available across continents.
Which is why the CEO, Omar El-Hamamsy, is no hurry to top up Oracom’s land bank, whether that’s in Egypt, its home market, or elsewhere. Plus, Orascom, one of the biggest names in the Middle East’s real estate space, is not interested in doing small- or mid-sized projects. Or build for others.
“Historically, we want to control everything – from owning the land outright to building on it,” said Omar El-Hamamsy. “That means our requirement is for large parcels of land, typically between 4 million square metres to 36 million square metres. This is why we are not keen to take on projects for others. We prefer to build destinations – and that’s what we are known for.”
Founded by Egyptian billionaire Samih Sawari, Orascom’s development footprint extends to six countries, including the UAE, Oman, the UK and Switzerland. As the CEO says it, everywhere “we do things end-to-end”. That strategy netted revenues of $581.5 million and the best performance ever for the company.
In the UAE, Orascom has already built to full capacity its site in Ras Al Khaimah, which features the Cove Rotana. “All our land in the UAE has been used, but there are new additions in Egypt (serviced apartments), Oman (beachfront villas) and Montenegro (golf villas),” said El-Hamamsy.
“We had a land bank of 100 million square metres, and what’s left is 50. There’s a lot we can still do.”
Conversations in Saudi Arabia
There had been speculation that Orascom Development would make an entry into Saudi Arabia, as the Kingdom undergoes a complete transformation in its real estate and tourism landscape. “There have been conversations with the authorities there about how and whether we could potentially get involved,” he said. “There are the Red Sea destinations and, of course, all of the new mega-cities.”
Office in Dubai
On Thursday, the CEO was present for the opening of its first international sales office, in Dubai. “We are pleased to open our first international sales office in Dubai to manage sales across our integrated towns and destinations in six countries, in a pivotal step to be closer to our customers,” he added.
Grip on costs
Orascom, as is the case with any other developer these days, is keeping close tabs on the price spike distorting building materials. “There’s been an 80 per cent increase since early 2021 and nobody was prepared for that,” said El-Hamamsy.
What we have done in response is engage in pre-buying ahead of a project start, which means placing orders early and at a lower price. That way we can try and keep cost of construction down.
“A second way was to pass on some of the cost increases to the customer because they can see it on a per square metre basis. It was inevitable that we had to pass this on, and our customers understand why. A third way was to tighten the management of all projects and keep overheads in check.”