First Finance aims to securitize a property portfolio worth 1.4 billion pounds

900 million pounds of new property financing during the first half of 2022

“Al-Oula” acquires 20.5% of the volume of real estate financing in the Egyptian market

Al-Tameer Real Estate Finance Company aims to pump new real estate finance estimated at 1.4 billion pounds into the upper middle and high income segment during 2022.

Ayman Abdel Hamid, Managing Director and Vice Chairman of the Board of Al-Tameer Real Estate Financing Company “Al-Oula”, said that the company obtained 20.5% of the volume of funds granted in the real estate market until the end of April 2022.

Abdel Hamid added that the company aims to increase this stake to 25% during 2023, and also seeks to securitize a real estate portfolio worth 1.4 billion pounds during the coming period.

The managing director of the company stated that during the first half of this year “Al-Oula” granted new real estate financing worth 900 million pounds.

He pointed out that the company aims to pump new real estate funds estimated at 1.4 billion pounds during 2022 into an above-average and high-income segment, in addition to financing for low and middle incomes, as well as achieve profits of 100 million pounds .

Abdel Hamid expected that the real estate financing sector will see growth during the coming period, as it is the ideal solution in view of the high real estate prices, explaining that since the beginning of real estate financing in Egypt, the rate of financing has been low, but now see we a remarkable growth in real estate financing activity.

Regarding global changes, Abdel Hamid said that any global crisis affects real estate finance like any sector, indicating the increase in the prices of building materials and consequently the increase in unit prices in the market, which increases the burden on the customer, and that a increase in the interest rate by 1% increases the burden on the customer by a range of From 8% to 10% during every 10 years of the financing life.

Abdul Hamid added that one of the main reasons for developers and real estate companies to refrain from finishing the housing units is that the customer has completely changed the finishing done by the company after purchasing the unit, which ‘ represents a waste of large sums, and so developers resort to selling half-finished units under certain conditions with a time limit Specifically for the client to finish his unit, and therefore the selling price of the unit is reduced as a result.

Abdul Hamid suggested that the proposal to finance semi-finished housing units be reconsidered, provided that the finishing work is completed within a specified period, let it be 3 months, and the amount of financing is paid to the seller only after the completion of the finishing . .

Also read: 54 million pounds, profits of “Al-Oula for Real Estate Finance” in the first quarter of 2022

He said that the application of this proposal contributes to the revival of the real estate market with a large percentage and leads to the entry of real estate developers more within the real estate financing initiative because of its great benefit to customers and to revive and meet the sales movement. the needs of the market, and this in turn will contribute to increasing the size of units for low and middle incomes and this is the main objective that the state is trying to achieve.

Abdel Hamid pointed out that the resort of real estate developers to sell their projects under the “Off Plan” system is a big risk for the developer, and various financing solutions should be provided to support the real estate developer and his ability to continue in the sector and growing the volume of its business.

He added that the obstacles to the activation of the property financing file are represented in two axes, the first is the high rate of return, which represents a large financial burden on the client, and the second axis is represented in the judicial procedures in the case of the customer’s default and inability to pay the installments.

Abdel Hamid explained that the real estate finance companies face a crisis in the event that the client fails to pay, and it takes a very long time to acquire the housing unit and be able to sell it again.

He called for swift intervention to resolve the crisis of delay in legal proceedings, which can take at least two years, pointing to the importance of the real estate financing file and its need for more attention as one of the solutions to the to revive the real estate sector.

He stated that guarantees should be provided, such as fines for developers who did not meet deadlines; Because the cost of debt in the event of delay costs the mortgage company a lot.

Abdel Hamid pointed out that the initiatives launched by the Central Bank contributed to attract a greater number of clients and provide long-term real estate financing for low and middle income people.

The managing director of “Al-Oula” expected the coming period to be a big boom in real estate financing in light of the initiative launched with a value of 100 billion pounds, noting that the number of beneficiaries expected to double 5. times that achieved 8 years ago, bringing the number of beneficiaries to 6 million.

He said that the “Al-Oula” company is the first real estate financing company in Egypt and was established in February 2004 under Law 148 of 2001, and its paid-up capital is 734 million pounds, and property rights are currently 900 million pounds.

Launch an electronic application to provide real estate financing services “online”.

He added that the size of the portfolio already financed reaches approximately 5 billion pounds, and that of these funds repaid during the past years since the establishment of 1.8 billion pounds, which brings the balance of customer debt to 3, 2 billion pounds by the end of April 2022.

He pointed out that the volume of the “Oula” company’s financing during the last six months of last year amounted to about 950 million pounds for the above average and high income category.

He said that the “Al-Oula” company intends to launch an application on mobile phones that will allow customers to apply for mortgage services, and deal “online” with the company.

He added that the “Al-Oula” company also provides its services to customers through the website, and the customer, through the application and the website, sends his data and the documents of the unit he wants to buy, and he becomes notified of the required papers, and all internal procedures in the company are carried out on the basis of these documents. The customer only needs to go to the branch to sign and finalize the contract.

Abdul Hamid explained that the provision of the new application is expected to be completed during the coming period, noting that the cost of the application has not yet been determined, but Al-Oula is working to prepare the initial cost in cooperation with the company’s information technology sector.

He pointed out that Al-Tameer Real Estate Finance Company “Al-Oula” has a strategy of relying on technology instead of opening branches, which helps to reach the largest number of traders in all governorates of the Republic, and the company also owns 7 administrative and sales headquarters.

He said the company has a large number of customers within the previous national project and the current social housing project, with low and middle incomes, noting that the company allows these customers to pay the installments through electronic wallets.

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