Driven by growth and regional expansion, PHDC is strengthening its presence in Abu Dhabi. This move creates added value and positions the company as a key player in the real estate market.
Moreover, with a sales inventory of EGP679bn, PHDC is prepared to capitalize on strong demand. The company expects to generate EGP423bn in collections between 2Q25 and 2032e. As a result, PHDC reinforces its strategy of sustainable growth, regional expansion, and delivering long-term value to the market.
HC Brokerage issued their update about Egypt’s real estate sector. They shed light on Palm Hills Development’s performance. The focus was on the company’s strategic decisions. Moreover, the report highlighted growth, regional expansion, and entry into Abu Dhabi. These moves aim to create added value and strengthen the company’s position in the real estate market.
Mariam Elsaadany, real estate analyst at HC Brokerage, commented with a positive outlook. She explained that PHDC is driving growth through strategic business decisions. The company has expanded beyond the Egyptian real estate market, marking a clear step in regional expansion.
In particular, PHDC launched a new project in Abu Dhabi, strengthening its position in the GCC real estate market. Moreover, the company is considering additional expansions in Saudi Arabia’s real estate, commercial, and educational sectors. It is also targeting Egypt’s educational and hospitality sectors.
These opportunities create added value and serve as catalysts for stock price growth. In this way, PHDC joins other Egyptian real estate developers in competing for a strong share of the lucrative GCC market.
PHDC’s Egyptian real estate business grew significantly in 2024. The company launched Hacienda Heneish and Hacienda Waters on the North Coast. It also signed a management agreement for Jirian on the Nile Delta extension in 2025.
Of the company’s EGP151bn in FY24 sales, about 63% came from the North Coast (EGP95.1bn). Around EGP82.4bn of inventory remains in the two projects, based on our numbers. This strong performance reflects the rising demand in the North Coast after the Ras El Hekma investment deal in February 2024. Consequently, PHDC strengthened its position as a leading North Coast developer in the Egyptian market.
In 2024, PHDC expanded its hospitality exposure to 1,262 rooms. The company added about 200 rooms through an agreement with Marriott International. This included the 150-room Ritz Carlton Residences Hotel in West Cairo. Moreover, PHDC increased its stake in Maccor Hotels to around 70%. The company now targets adding 4,000 new rooms over the next five years.
PHDC also expanded in Egypt’s education sector. It acquired around 33% of Taaleem Management Services (TALM EY). This move diversified its revenue stream and boosted its recurring income businesses.
Another key milestone came with the announcement to develop a 1.87m sqm plot in Abu Dhabi with Wave Seven. This project adds significant value to the company. The location, expected selling prices, exposure to a USD-pegged currency, and low tax rate all support a rerating in our view. Importantly, the project directly faces the iconic Saadiyat Island, near Yas Island and Al Reem Island. PHDC will execute the development through PHD North Jubail Property Development Company, a fully owned subsidiary of Palm Hills Developments.
Additionally, PHDC announced a strategic partnership with Saudi Dallah Al-Baraka Holding Company (DBHC). Together, they will establish a company with a 60%/40% ownership structure to develop integrated mixed-use urban projects across several regions in the Kingdom. This marks a major step in PHDC’s regional expansion strategy.
Looking ahead, PHDC plans to invest around USD300m in Saudi education developments in 2025, in cooperation with local partners. It also intends to invest another USD300m in residential and commercial projects. Furthermore, the company is working with a local joint venture (JV) to open 15 schools in cities including Riyadh and Jeddah. These investments highlight PHDC’s focus on growth, regional expansion, and creating long-term value in the real estate market.
Despite lower affordability in Egypt, we still expect solid growth in the real estate market. Sales on the North Coast, price increases, and relaxed payment terms continue to support performance. Moreover, regional expansion adds further momentum.
We believe developer sales in 2025e will be driven mainly by North Coast sales and more flexible payment plans. In addition, new ventures into the hospitality segment, along with GCC and Abu Dhabi expansions, should deliver added value for Egyptian developers.
Developers are expected to start reaping the benefits of Ras El Hekma as early as this year. For example, Modon Holding announced the launch of the first 12,000-feddan phase of the mega-project. As a result, the market outlook looks positive.
We see little concern of construction cost overruns during the short to medium term. However, this depends on limited currency shocks and significant price increases.
A declining interest rate environment should further stimulate real demand. It also opens new opportunities for developers, especially those with ambitious recurring income projects that are capital-intensive. Moreover, interest savings should boost profitability for highly leveraged developers.
Finally, we expect 2025e deliveries to be somewhat impacted by higher construction costs. However, overall delivery levels should remain healthy. Mariam El Saadany added.
The real estate analyst concluded: We expect strong real estate cash collections of EGP588bn over our 2Q25–38e forecast horizon. In fact, these collections include both existing receivables and new sales in launched projects.
The projects are located in the North Coast, Alexandria, and Eastern and Western Cairo. They capture sales from Badya, P/X, Hacienda Heneish, Hacienda Waters, Hacienda Blue, PHNC, and Bamboo III, among other developments.
Moreover, we forecast total sales of EGP679bn over 2Q25–2032e. This includes EGP506bn from West Cairo, EGP131bn from the North Coast and Alexandria, and EGP41.9bn from East Cairo.
In addition, we estimate EGP552bn of real estate revenue recognition during 2Q25–2032e. This accounts for the outstanding backlog of EGP68.9bn, new sales from the launched phases, and all sales from Badya.
At the same time, we assume total real estate cost recognition of EGP310bn over 2Q25–2032e. Accordingly, this implies an average future gross profit margin of around 44% for the launched projects.
We also expect interest rate easing to reflect positively on PHDC’s profitability throughout 2025e. For example, we forecast interest expense to decline to EGP2.09bn in 2025e from EGP2.31bn in 2024e. Management provided guidance of EGP160m in interest savings for every 100 bps rate cut.
Given the declining cost of debt, management could seize the opportunity to increase leverage. However, thanks to strong sales growth and regional expansion, including Abu Dhabi, we expect high collections to be sufficient to finance construction costs.
Accordingly, we expect net debt-to-equity to decline to 0.55x in 2025e from 0.75x in 2024. Finally, given the company’s expansion strategy in the real estate market, we expect it to withhold dividends going forward to maximize added value.
We expect revenue to grow at a 2025-28e CAGR of c7%, EBITDA at c13%, and net income at c23%.
