(MENAFN- Arab Times) The National Real Estate Company (NREC), one of the leading real estate companies in the Middle East and North Africa (MENA), held its 44th Annual General Meeting of Shareholders in Kuwait.
The AGM approved the Board of Directors' Report on the company's activities and financial position for the Financial Year ending 31st December 2014 as well as the Auditors' Report for 2014.
NREC CEO, Samuel Sidiqi, said: "I am pleased to report that our overall operational performance has improved during 2014. Looking forward, our strong recurring rental cash flow coupled with increasing revenue from key development projects is expected to drive growth and enhance shareholder returns in the coming year. Furthermore, we expect our operations in Egypt to outperform with the handover of our Grand Heights project commencing during 2015, and should result in a further improvement in our financial performance and increased contribution to operating profits."
NREC's real estate portfolio represents a number of high profile developments across the MENA region with a particular focus on Kuwait, Egypt, UAE and Jordan.
In Egypt, NREC continued to perform strongly with sales at its Grand Heights development growing at over 56% to EGP 1.3 billion in 2014. The number of units sold during 2014 was 385 taking the total units sold till date to 712. Grand Heights, a 3.8 million square-meter residential community development project outside of Cairo, is 79% owned by NREC and is expected to have over 1,450 family homes by 2021. Recognized revenue of EGP185.2 million in 2014 represents a robust growth of 34% over 2013. Egypt's strong economic recovery and high pent up demand is expected to drive sales growth in the coming year. The handover of units in the first phase of Grand Heights will start during 2015.
In the UAE, development plans for NREC's billion dollar Reem Mall in Abu Dhabi have rapidly moved forward. The Reem Mall is a super-regional mall with over 260,000 square meters of gross floor area, and is expected to set new standards in mixed use real estate development and be a landmark in regional growth. NREC has shortlisted a set of best in class contractors after a detailed screening and is expecting to break ground this year.
In Kuwait, rental income recorded 11% growth over 2013, considered an achievement given the oversupply of office space.
In Jordan, NREC saw a 17% increase in revenue and 41% increase in net profit from rental properties. It is expected to capitalize on the increasing need of businesses for warehouses, factory buildings and serviced land in the coming year.
NREC's investment in Libya continued to face headwinds due to the ongoing regional challenges. The joint venture experienced strong operational profits during 2014. However, management took a conservative approach and provided for a marked to market impairment loss. This has been included in the joint venture investment loss of KD 5.3 million in 2014.
In September 2014, NREC successfully completed a KD 154.4 million debt restructuring. The previous loan facility consisted of a KD 88.4 million short term loan and a KD 66 million medium term loan. With the completion of the restructuring, the new loan facility now consists of a KD 14.4 million short-term loan and overdraft facility and a KD 140 million long-term loan to be repaid in seven years.
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