PRESSR: Palm Hills Development: Positioned for expansion

About this update from Palm Hills Development Co.

We forecast EGP423bn in collections over 2Q25–2032e as we expect PHDC to capitalize on its EGP679bn sales inventoryHC Brokerage issued their update about Egypt’s real estate sector through shedding the light on Palm Hills Development performance focusing on the company’s strategic decisions.Mariam Elsaadany, real estate analyst at HC Brokerage commented that: “Strategic business decisions justify a more positive view: PHDC's expansions extended beyond the Egyptian real estate market with a new focus on the GCC, including the newly announced Abu Dhabi project, along with potential expansions in Saudi Arabia's real estate, commercial, and educational sectors and Egypt's educational and hospitality sectors. These new opportunities offer value and act as stock price catalysts, in our view, as the company joins other Egyptian real estate developers in capturing a share of a lucrative GCC market. Additionally, PHDC's Egyptian real estate business grew significantly with its launch of Hacienda Heneish and Hacienda Waters on the North Coast in 2024, and a management agreement for Jirian on the Nile Delta extension in 2025. Of the company's EGP151bn of FY24 sales, c63% were generated from the North Coast (EGP95.1bn), with some EGP82.4bn of inventory remaining in the two projects, on our numbers. The success builds on increased demand for the North Coast following the Ras El Hekma investment deal announced in February 2024 and strengthens PHDC's position as a major North Coast developer. PHDC expanded its hospitality exposure in 2024 to 1,262 rooms by adding around 200 rooms through an agreement with Marriott International to launch the 150-room Ritz Carlton Residences Hotel in West Cairo and increasing its stake in Maccor Hotels to c70% and targets adding 4,000 new rooms over the coming five years. Also, PHDC increased its exposure to Egypt's education sector with the acquisition of c33% of Taaleem Management Services (TALM EY), diversifying its revenue stream and increasing its recurring income businesses. The company's announcement to develop a 1.87m sqm plot in Abu Dhabi with Wave Seven triggers a rerating in our view, due to the project's location, expected selling price, exposure to a USD-pegged currency, and low tax rate. The project directly faces the iconic Saadiyat Island near Yas Island and Al Reem Island and will be executed through PHD North Jubail Pro...

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