(2018-10-22) ODE: CBRE values El Gouna Assets at $2.1bn 42 times its current book value. Orascom Development Egypt (ODE) (ORHD) assigned CBRE Group Inc, one of the best-known international property valuators with more than 450 offices worldwide, to conduct a fair market value study for its remaining undeveloped land bank and its 17 hotels with 2,654 guestrooms in El Gouna, Egypt.
CBRE’s report valued the remaining 22.9 million sqm of undeveloped land in El Gouna at an aggregate market value of USD 1.82 billion (EGP 32.5 billion), 170 times its current book value which stands at USD 10.7 million (EGP 191.4 million) as of 30 June 2018.
The report also valued El Gouna’s 17 hotels using a Discounted Cash Flow (DCF) method at USD 303.6 million (EGP 5.4 billion) compared to their book value of USD 39.3 million (EGP 703.5 million) as of 30 June 2018, 87% below the estimated market value.
Based on the Group’s request, the report appraised only the remaining undeveloped land and 17 hotels in El Gouna, Egypt, and did not take into consideration any other commercial properties or buildings in the destination. In total, ODE owns 24 hotels across three destinations with 4,922 rooms and 28.1 million of undeveloped land bank all of which are booked at cost.
CEO Khaled Bichara commented: “I am pleased with the completion and publication of this valuation report performed by CBRE. The report reiterates our earlier conviction that our Group owns many assets with substantial hidden value kept at book value in our financial statements. Moreover, we believe our assets are not adequately reflected in ODE’s stock price. The 17 hotels in El Gouna alone plus the remaining land would make up more than 7.7 times the current market capitalisation, using CBRE’s market value.
