Bonyan IPO: Bringing a New Real Estate Investment Model to EGX
Updated 7/13/2025 9:00:00 AMArab Finance: Looking at Egypt, it is clear that most wealth of Egyptians in the country has been created through real estate investment.
Bonyan is an Egypt-based company specialized in real estate investment, particularly in the commercial and office segments. In the evolving Egyptian market, the company has significant growth potential.
In his first exclusive interview following the initial public offering (IPO) subscription launch, Arab Finance spoke to Shamel Aboul Fadl, Executive Chairman of Bonyan, about the company’s business model and the difference from typical real estate development models in Egypt.
As the company opened its IPO subscription this week, Aboul Fadl notes that this is the ideal time to list Bonyan's shares on the Egyptian Exchange (EGX). The IPO decision is based on the company’s study of the Egyptian market and the performance and trading volumes of the EGX.
In addition to Bonyan’s current focus on the office real estate market, Aboul Fadl indicated that the company is also exploring investments in the warehousing and logistics sector, particularly facilities leased to multinational corporations and major Egyptian companies.
He notes that the total value of the company's investment portfolio, before deducting liabilities, reached nearly EGP 17 billion as of March.
1- The biggest news for Bonyan right now is the offering of 21.94% of its shares on the EGX. Can you tell us more about it?
We have been working on this IPO for quite some time, waiting for the right moment. The EGX has been performing well overall in the past period, in addition to real estate stocks performing particularly well. Recently, we have seen a general upward trend in the market.
Any company aiming to go public waits for the right IPO window. We officially opened the subscription for Bonyan’s IPO on July 6th, for a five-day private placement to institutions until July 10th, with a public offering for individuals until July 15th. We expect trading to begin before the end of July.
We have been closely monitoring the market, its trading volumes, and the recent entry of ValU's, and we believe this is the right time to introduce a new stock in the market.
2- How will this IPO impact the real estate investment landscape in Egypt?
In Egypt, we traditionally view real estate as the largest and best asset class. It is the largest investment percentage for most Egyptians, and a driver of wealth, whether it is buying buildings or land as a long-term creator of value. That is the traditional model.
But there is another form of investment, which is real estate investment through structured companies like Bonyan.
Our model is different than most individual investors in real estate currently. We do not invest in residential properties.
Instead, we focus on commercial and office properties. We buy properties that are either fully constructed or nearing completion. Then, we lease them to international companies and Egyptian companies
So, in essence, what we do is similar to how individuals invest in real estate, but we do it institutionally, while focusing on leasing commercial and office spaces.
Our activity is completely different from that of typical real estate developers operating in the market. We do not build or develop properties, we acquire finished, ready-to-use properties for leasing purposes.
3- Does that mean you currently have no competitors in the market?
Currently, we do not have any direct competitors in the market. However, I expect some investors may try to launch similar ventures in the near future, especially after Bonyan’s listing. This is, of course, a positive development for the sector as a whole.
There has been news that several companies are targeting to establish real estate investment funds and companies, which will support and expand the sector.
4- Why didn’t Bonyan opt for a direct listing, like U Consume Finance (valU)?
Bonyan’s IPO model is different from ValU’s. In our case, all orders are collected through investment banks and offered on a single day. The key portion of the offering is sold that day, followed by market trading.
As for ValU’s model, although it is a successful one, it is different from Bonyan’s model. It is known as a “technical listing.” Where shares are listed and then sold a there are orders in the future. Since listing till today, ValU has traded around 7% of its outstanding shares in the market.
5- Following the listing of around 362.9 million shares of Bonyan on the stock market, what are the expected offering proceeds and company valuation?
The total expected proceeds from the offering are EGP 1.8 billion, EGP 250 million of which will be directed to increase the company’s capital.
As for the valuation, the independent financial advisor (IFA) overseeing the IPO issued a report, setting the company’s net valuation after liabilities at around EGP 12.5 billion. The offering is priced attractively, targeting a range between EGP 8.2 and 9 billion,
This gives shareholders the opportunity to benefit from the spread between the offering price and the fair value of the shares.
6- The real estate sector accounts for about 13% of the EGX’s total market capitalization, making it the second-largest sector after banking. What makes Bonyan stand out and attract investors compared to others?
All companies in the real estate market are developers, which is different from our business model. We focus on real estate investment in leasing commercial and office properties.
We retain ownership of the properties, aiming to maximize their value. We do not sell them except to rebalance the portfolio. Instead, we lease them to businesses. If we look at international markets, most listed real estate companies are investment companies, not developers.
7- What is the current value of Bonyan’s investment portfolio?
As of the end of March 2025, Bonyan’s total investment portfolio is valued at EGP 17 billion, based on an external valuation. This figure reflects the value of our assets before deducting all the liabilities and bank debt
8- What are the company’s plans for expanding its real estate portfolio following the IPO?
The current shareholders acquired Bonyan in 2018. Although the company has been in the market since 2008, it only had one asset at the time of acquisition. Today, we own 10 real estate assets.
We see strong growth potential and are continuously evaluating various investment opportunities presented to us. We assess and compare these opportunities based on our proprietary real estate market database in Egypt, which helps ensure that the properties we acquire align with the needs of the end tenant.
9- What is the company’s philosophy behind focusing on administrative and commercial properties?
When considering investment in office properties, it is essential to look at it from several angles. We believe we have a unique competitive advantage in this segment.
Unlike residential real estate, currently, the office market is experiencing a supply-demand gap in favor of demand for office properties.
10- How do you assess investment in office and commercial buildings, especially in light of the supply-demand gap?
In addition to the existing supply-demand gap in the market, Bonyan has another advantage. While office spaces currently offered to investors and users for sale tend to be small in size, Bonyan purchases large spaces at more favorable prices compared to buyers of smaller units.
The second more important point is that the fact that we own a large office building, which allows us to offer our clients the large-scale spaces they need, tailored to their preferences and with the right specifications.
11- Is Bonyan planning to diversify into other types of real estate beyond administrative and commercial properties over the coming period?
Alongside administrative buildings, we are currently exploring investments in logistics and warehouse properties, which are typically leased to global, multinational, and Egyptian companies.
While we are not currently considering residential real estate, we may revisit it in the future if we identify an opportunity where there is both a market gap and attractive rental prospects.
12- How is the company dealing with inflation amid market volatility?
Inflation and rising prices actually work in our favor, as the value of the properties we have acquired increases over time due to such inflation. This contrasts with real estate developers who are significantly impacted by inflation due to the rising cost of raw materials during the construction phase, while they have fixed selling prices
13- How do you view the challenges and risks facing Egypt’s real estate market?
To answer this question, we need to consider supply, demand, and inflation when assessing the risks surrounding Egypt’s real estate sector.
14- What are the company’s plans and strategy for the upcoming period?
We have expansion plans in the pipeline. Currently, we are evaluating investment opportunities in several real estate assets.
15- How do you see the impact of the Central Bank’s recent interest rate cut on the real estate financing sector?
The Central Bank of Egypt’s (CBE) decision to lower interest rates is a very positive step for the real estate market. With inflation easing, the interest rate will continue to be reduced, which benefits real estate investment.
It also benefits Bonyan as a company, since the model improves returns when our asset acquisitions are funded through bank facilities in addition to our own equity and cash flow.
Currently, our debt levels do not exceed 8% of our investment portfolio.
16- What are your expectations for the Egyptian real estate market given the ongoing geopolitical changes in the region?
Since 2011, property prices have not been negatively affected by regional tensions. On the contrary, they have benefited and continued to rise.
17- Compared to other investments like gold, the US dollar, bank deposits, and stocks, what makes real estate investment stand out?
The main advantage of real estate investment is its ability to hedge against inflation. A global study conducted between 2013 and 2024 on global real estate by Morgan Stanley found that while the average global inflation rate was around 4%, the average return on real estate was about 14%. That means real estate returns were more than double the inflation rate.
At Bonyan, we conducted a detailed 13-year study comparing returns from all asset classes availed in Egypt, namely real estate, gold, USD, treasury bills, and listed stocks. We found that real estate delivered an annual return of around 32%, compared to approximately 26% for gold and 15% for treasury bills.
While the returns may seem close but because of compounding, the impact is massive. For example, real estate and gold have only a 6% difference in returns per year. An investment of EGP 1 million in gold during that period would have grown to EGP 13.5 million, while the same amount invested in real estate would have yielded a higher return of EGP 22 million.
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