UPDATE 2-Egypt's Palm Hills to raise $392 mln in London IPO

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By Daisy Ku and Sinead Cruise

LONDON, April 17 (Reuters) - Palm Hills Developments PHDC.CA will raise as much as $392 million in the first ever real estate initial public offering by an Egyptian firm in London this month.

The Cairo-based firm, which has the biggest land bank in the country, develops high-end residential real estate on the west and east axes of Cairo and resort projects at the North coast of Egypt and on the Red Sea Coast.

Its institutional roadshow started on Wednesday, while pricing of the IPO, arranged by Goldman Sachs (GS.N: Quote, Profile, Research) and EFG Hermes HRHO.CA(HRHOq.L: Quote, Profile, Research) is due around April 29.

Shares of Palm Hills will also trade on the Cairo and Alexandria Stock Exchange.

The Egyptian real estate sector is booming due to fast economic growth, the declining real estate taxes and the developing mortgage system.

The country's GDP grew 7.1 percent last year while demand for residential properties, at about 100,000 units, is surpassing supply of 60,000 units this year, analysts said.

Foreign interests in the sector are also on the rise due to relatively low valuations compared to surging prices in neighbouring countries.