CAIRO: Egyptian group Orascom Development and local real estate firm Madinet Nasr Housing scrapped an agreement to cooperate in developing the Tigan real estate project, Orascom said on Monday.
Swiss-based Orascom Development Holding through its subsidiary was managing the 3.5 million square meter development with Madinet Nasr but said in a statement the two firms had reached a joint decision to cancel the agreement because the time was unsuitable to launch the project.
The fate of the Tigan project was not immediately clear after Orascom withdrew from managing the development.
Egypt’s property market, which had been a major driver of foreign investment and growth, has been reeling from political uncertainty and a string of legal rows over how the government of ousted president Hosni Mubarak sold state land.
Orascom said in the statement the decision was made "in light of the recent changes in the real estate industry and the unsuitable timing to launch a huge and luxurious housing project." It did not provide further details.
Land disputes have hit major firms like Talaat Moustafa Group, Palm Hills Development, and Egyptian Resorts, most of which have higher exposure to luxury property. The cases revolve around a 1998 law requiring state land be sold via competitive bidding not direct sales.
Nasr City Housing, a formerly-state run firm founded by the government in 1959 and now 30 percent owned by Beltone Private Equity, has been awaiting government approval to start work on some of the best land it owns.
Work on Tigan, planned to include mixed-use housing units and commercial buildings, had been stalled for over a decade because of a dispute with Egypt’s aviation authority.
A firm official said in an interview late last year that Nasr City expected a final seal of approval from the government and to launch the project by the first half of 2012.