The Ministry of Religious Endowments will send delegates, including representatives from the Tourism Development Authority (TDA) and the Ministry of Antiquities, to follow up on its properties in Greece over the next two weeks following a 75% increase in property use violations and the ministry’s desire to maximise use of its properties, according to sources at the ministry.
The Religious Endowments Authority will hold an expanded meeting with the national committee of the Ministry of Foreign Affairs, the General Authority for Investment and Free Zones (GAFI), and the Ministry of Religious Endowments in order to coordinate and set a work agenda for the delegation before their scheduled trip to Greece.
GAFI’s role will be to establish a way to optimally utilise the Ministry of Religious Endowments’ properties in order to achieve the highest return and support the local economy.
Egypt owns Mohammed Ali Palace along with approximately 38 acres in Greece, which is divided between agricultural land, undeveloped land, real estate, and houses.
Approximately 90% of the properties are located on Thasos Island in Greece, and the rest are in Kavala.
The Egyptian government has a resolution stating that these properties are registered under its name in 1984 and the Greek government must cooperate to remove properties and businesses that infringe upon Egyptian rights to manage the land.
Mamdouh Rashad, former general manager of the Egyptian Religious Endowments Authority, explained that the Ministry of Religious Endowments has great wealth in Greece, represented in the Muhammad Ali Pasha Museum, his old house, a school of war, a number of houses, undeveloped land, and agricultural areas estimated at 50,000 sqm. The authority leases these properties cheaply: up to €3,000 for the palace, €800 for shops (contrasting the rental values of similar properties in this area, which can reach €1,500), and €800 for houses.
He added that nearly 75% of the properties are not leased to citizens in Greece despite their reasonable prices, making them vulnerable to property violations by Greek citizens.
The market value of Muhammed Ali Pasha Palace is no lower than €500,000, owing to its location between two seas, according to a number of experts.
The authority was able to lease the Muhammed Ali Pasha Palace to a Greek investor for a low price. The investor converted the palace into a hotel while still retaining its identity and leaving its structure unchanged, except for some developments such as air conditioners and modern technology.
The hotel is located on an area of 4,500 sqm and has 45 rooms—the rental cost is worth up to €3,000 per month.The hotel has a specific listing in hotel guides, and is illuminated by candles at night. However, the investor has announced her desire to reduce the rental value due to the negative impact of the economic crisis in Greece, Rashad said.
He noted that the authority has been renting the palace to the investor since 2001 on a 50-year contract, making it inheritable. The contracting had not been conducted through the legal affairs department in the authority, nor was it signed by the authority, but rather it took place in the Ministry of Foreign Affairs.
The investor carried out all restoration works on her personal expenses at a cost of €8m. It was then launched as one of the most luxurious hotels in the world.
The contract stipulates that the hotel be invested for 50 years with an annual rent of €36,000, as well as a 20% increase every 10 years.
The Ministry of Religious Endowments does not manage its properties in Greece directly, but chooses to rent them to investors there. If they are not rented, they become abandoned, which exposes them to violations.
All revenues are delivered to the authority through its agent there, and it has sought to increase the rental value of its properties. Deals were made with tenants to increase the rent by €300 per month. The ministry’s neglect in this matter, however, left the deals incomplete. Rashad explained that the ministry’s delay in following up on its properties resulted in Greek investors evading rent payments. The authority has dealt with this through its legal adviser in Greece and has resorted to Egyptian and Greek judicature.
He said that the ministry owns a small house that belonged to Muhammad Ali Pasha in Kavala, Greece. Its monthly rent is €800, with a total annual rent of €9,600. Current leaders within the authority must utilise the 11,000 sqm property, equivalent to three acres, overlooking the sea, which would be suitable for a tourist project.
Greece is a tourist country with many shops and cafes in this region overlooking the sea, which are visited by a large number of tourists for beach tourism. In the past period, it was decided that a tourist project would be established in order to promote Egyptian tourism destinations, according to Rashad.
An official source in the authority said that the ministry is aiming to utilise all its properties both domestic and abroad to achieve the highest revenues possible, as all of these properties have the potential to be better used.
Throughout the upcoming period, the authority will look for Egyptian or Greek investors to rent the already-existing buildings and implement modern projects on the land there in cooperation with the Antiquities Ministry and the TDA.
He explained that it will consult studies by the Watania Group for Investments in Religious Endowments to carry out modern projects in terms of expenses and implementation. It will also consult some experts in order to decide the correct value of its properties in Greece in order to sell them if they cannot be invested or rented.