Daily News Egypt

Egyptian property boosted by Europe bank bonuses - Daily News Egypt

Advertising Area




Advertising Area



Egyptian property boosted by Europe bank bonuses

CANNES, Fra.: The return of European bank bonuses will breathe life into the world’s catatonic market for overseas residential investment in 2010, the developer behind Egypt’s biggest building project told Reuters. Peter Riddoch, chief executive of Port Ghalib Resort Co., a unit of Kuwaiti construction conglomerate M.A.Kharafi Group, said bankers were among those reviving buy-to-let …


CANNES, Fra.: The return of European bank bonuses will breathe life into the world’s catatonic market for overseas residential investment in 2010, the developer behind Egypt’s biggest building project told Reuters.

Peter Riddoch, chief executive of Port Ghalib Resort Co., a unit of Kuwaiti construction conglomerate M.A.Kharafi Group, said bankers were among those reviving buy-to-let plans as job security improved, with Egypt flying high on their wish lists.

“The market for second luxury homes overseas was lying still for a while but it is now moving forward quite nicely again, Riddoch said in an interview at the MIPIM property trade fair. After more than a year of job cuts and salary freezes, many European and US banks dished out bonuses again in early 2010 in moves likely to boost global sales of holiday homes.

With the traditional hotspots of Spain and Dubai still very much in the doldrums, Riddoch said savvy investors were now looking to Egypt, where tourism growth hit a five-year high of a 43 percent year-on-year in January and February.

“China is showing 10 percent growth in GDP, India is at 6.8 percent, Europe and the US are negative but Egypt is showing 5.8 percent growth. It’s right up there with the big guns but people are only starting to realize that potential, he said.

While poor transparency and uncertain rental prospects in other global residential investment markets had inspired some foreign investors to look at Egypt, Riddoch said the market “could stand on its own two feet.

The opportunity to make money from property ownership in integrated resort communities like Port Ghalib was not lost on Egypt’s emerging middle class, many of whom had got in early, sold and recycled the proceeds into a new crop of investments.

That aside, Riddoch said the Egyptian government was already seeing the fruits of its efforts to make foreign real estate investment more straightforward and transparent in recognition of the benefits to its economy.

“Other than the Sinai which is 99-year leasehold, freehold foreign ownership has always been permissible. There are limits on the numbers of homes an overseas individual can own but companies can own as many as they want, he said, explaining an uptick in interest for bulk-buying at Port Ghalib.

The M.A. Kharafi Group is investing more than $2 billion in the first 8 million square-meter phase of the overall 30 million square-meter project on Egypt’s Red Sea coast.

Port Ghalib is offering gross rental yield guarantees of 5-7 percent on holiday homes for the first three years to sweeten discerning investors who expect their euro or pound to go much further today than it did three years ago.

“If you ignore the flatness of the last 18 months, 10-15 percent (capital growth) is not unreasonable to expect on a per annum basis, Riddoch said.

“People want to invest in communities not just resorts. They want to know that even out of season, these investments still perform. The days of creating a bunch of villas and a swimming pool and drawing lots of Western cash are long gone, he said.

Topics: FJP

Advertising Area

Advertising Area



https://www.dailynewsegypt.com/2010/03/19/egyptian-property-boosted-by-europe-bank-bonuses/
Breaking News

No current breaking news

Receive our daily newsletter
Subscribe