EGP 4M, 8M or 15M? Where to Invest in Downtown New Capital

Instead of talking about investment in general, let’s take three investors with realistic budgets and goals and see what each would choose in TROPHY offices on floor 49 of Tycoon Center. For each one, we work out the down payment, the monthly installment and the expected return.

Before we start: how the numbers are calculated

Prices: a 25% share from EGP 3.8M, a full unit from EGP 15M.
Return: from 12% for a share and from 14% for a full unit, calculated here on the purchase price.
Lease: a 4-year lease starts at handover.
Payment: 10% down over 6 years, 15% over 7, or 20% over 8. Installments are treated as equal for simplicity.

Investor 1: EGP 4M, looking for rental income

Choice: a 25% share in a TROPHY office, EGP 3.8M

Down payment: from EGP 380K (10%) to EGP 760K (20%).
Installment: about EGP 47,500 a month over 6 years, or EGP 31,700 over 8 years.
Expected return after handover: 12%, about EGP 456K a year or EGP 38K a month.

Why it fits: the lowest entry price, with no office to manage and no tenant to find for the first four years.

Watch out for: decisions about the unit aren’t theirs alone, since they share it with other owners.

Investor 2: EGP 8M, looking for a bigger return

Choice: two shares, EGP 7.6M

Down payment: from EGP 760K to EGP 1.52M.
Installment: about EGP 95K a month over 6 years, or EGP 63,300 over 8 years.
Expected return after handover: about EGP 912K a year, or EGP 76K a month.

Why it fits: double the return at the same price per share. Ask whether the two shares can be in the same unit or in two units, depending on availability.

Watch out for: two shares cost EGP 7.6M, while a full unit starts at EGP 15M with a return from 14%. If your budget is getting close to EGP 15M, compare shares with a full unit.

Investor 3: EGP 15M, looking for full control

Choice: a full unit, EGP 15M

Down payment: from EGP 1.5M to EGP 3M.
Installment: about EGP 187,500 a month over 6 years, or EGP 125K over 8 years.
Expected return after handover: 14%, about EGP 2.1M a year or EGP 175K a month.

Why it fits: the highest return, sole control over selling and leasing, and the option to use the unit as a company headquarters once the lease ends.

Watch out for: all the money sits in a single unit.

Installment vs return: the full picture

On the 20% down, 8-year plan, the expected monthly return is higher than the installment in all three cases:

One share: EGP 38K return vs EGP 31,700 installment.
Two shares: EGP 76K return vs EGP 63,300 installment.
Full unit: EGP 175K return vs EGP 125K installment.

So if handover happens while installments are still running, the rent could cover the installment with some left over. Keep in mind that the return starts at handover, and until then the installments come out of your own pocket. That’s why you should ask about the expected handover date.

What if you want a return before handover?

There is TROPHY PLUS with 30% down, 30% after one year, and 30% return before handover. After handover, the rental return begins.

How to choose your scenario

Answer three questions:

How much can you put down now?
How much can you pay each month until handover, without relying on rent?
Do you only want rental income, or full control or a future company headquarters?

If you’re still torn between a share and a full unit, read Office share or full unit?

Bottom line

EGP 4M: gets you in with a share and a return from 12%.
EGP 8M: doubles the return with two shares.
EGP 15M: gives you a full unit, a return from 14% and full control.

In all three cases, the expected return after handover is higher than the installment on the 8-year plan.

EGP 4M, 8M or 15M? Three Investors, Three Choices in Downtown New Capital