Egypt exports $500m worth real estate within only few days: Tatweer Misrchief

Shaimaa Al-Aees
10 Min Read

The Egyptian real estate sector has witnessed $500m worth exports during the past few days, of which $400m came from the sale of an approximately 85.52% stake in the Sixth of October for Development and Investment Company to a consortium comprising Aldar Properties and ADQ. The rest $100m was injected by an Emirati investor in Ora Developers as part of its capital increase, according to Ahmed Shalaby, Chairperson and CEO of Tatweer Misr.

He participated in the fourth session of the third Egypt Economic Summit earlier in December. The session shed the light on urban development and its impact on the economy.

The real estate sector remains the driver of development in Egypt and leads the increase in growth rates, despite political turbulence and the coronavirus pandemic, Shalaby said. These investments showed investors’ confidence in the Egyptian real estate market. “Developers earned EGP 150bn, or roughly $10bn, in sales which attracted international companies such as Emaar and Aldar.”

Shalaby noted that there are 61 new cities in Egypt, of which 34 under-construction fourth-generation cities. “This number represents the locomotive of development and helps the sector grow, especially in light of the rising demand on housing units.”

He pointed out that the private sector cooperated with the government in setting procedures to regulate the real estate sector and has contributed to different legislations in order to achieve this objective.

“Developers will abide by these regulations as soon as they are issued, which helps protect the customers’ rights and encourage the developers,” he elaborated, stressing the importance of the Occupants Union Law and an independent auditor to monitor contracts, ensure that deposit returns are reviewed. In addition, a developer’s commitment to a separate deposit account is also very important to preserve real estate wealth.

Moreover, Tarek Shoukry, Head of the Real Estate Development Chamber in the Federation of Egyptian Industries, said that the transfer of the House of Representatives, Cabinet, and different ministries to the New Administrative Capital was a great transition.

Shoukry stated that new cities are built at the highest standards including the New Capital, New Alamein, and others; all of which have caused an urban boom.

He further pointed out that the inflationary wave has proven that the Egyptian real estate sector is resilient and pioneering, expecting that the increase in real estate prices will not exceed 15% and that the developer will bear the increase.

He added that there is a tripartite relationship between countries or their representatives, the developer and the buyer, but the more the market grew, the more it needed regulation.

“The Parliament discussed the procedures that regulate the work of developers, and guarantee the rights of all parties in the system. Developers who do not abide by delivery dates will be penalized. This is an important measure for the continuation of the market, in addition to the availability of the necessary services, foremost of which is maintenance, which helps push the Egyptian economy as it increases employment. The law is based on protecting the buyer, even if the developer is committed, but faces circumstances beyond their control; there must be mechanisms to deal with such situations. These are not restrictions on developers, but rather made to increase the confidence in this sector and thus increase investment,” Shoukry said.

As for the effects of the increase in building materials prices on the real estate market, Chairperson of Amer Group Holding, Mohamed Mekkawy, said that the sector is familiar with price hikes and inflation.

He added, “We have witnessed a steady increase in dollar prices over the past years, accompanied by an increase in the prices of building materials, but the demand for real estate has not been affected because there is always a need for housing throughout Egypt. The New Urban Communities Authority continues to build, and the government offers diverse mortgage financing options with low interest rates, therefore even with an increase in prices, the installment period ensures that the buyer has the ability to obtain the housing unit they want.”

Mekkawy noted that the developer cannot bear all the extra costs on the buyer, but he tends to bear part of it, stressing that the laws and decisions that are expected to be issued soon regulate the real estate market and are in the interest of everyone, whether the buyer or the developer.

He went on to explain saying, “During the past years numerous companies were launched under the name of a real estate developer, but they do not rise to this role. If we look at the surrounding European countries, 99% of the transactions that take place to buy a property are through the real estate financing system, while in Egypt it does not exceed 1%. We are behind in developing the existing initiatives, and currently we are offering the buyers purchasing through real estate financing systems. As companies, we have to provide facilitation over long periods of time to be able to sell units, while if there were systems put in place through specialized entities, the funds of these units can be directed to building new units.”

CEO and Managing Director of Misr Italia Properties, Mohamed Hany El Assal, said that the government has implemented 14 new fourth generation cities, like the New Administrative Capital, which is distinguished by its closeness to Cairo and being implemented at the highest level of technology. “This is in addition to operating the monorail and the Financial and Business District, and with the government’s transfer of management to the administrative capital, it will raise the government’s productivity, which will be reflected on the results of service provided to citizens.”

He added: “We will enter the era of smart cities, which will transfer us to a new concept for the first time in Egypt; sustainable cities.”

El Assal expected an increase in the prices of units in the New Administrative Capital by 10-15%, in line with the government’s transfer of administration. At the same time, the downtown area will benefit from this transfer and will turn it into a tourist attraction, pointing to the plan to develop the Tahrir Complex with a total investment of EGP 3.5bn to become a multi-purpose hub.

El Assal stressed the importance of regulating the real estate market, with the aim of protecting customers from companies with weak experience.

He proposed the establishment of a government agency concerned with studying the offers submitted by real estate companies to implement projects, and studying the solvency and its ability to implement the project, to protect customers.

Mohamed El Assal believes there will be low repercussions from the global inflation wave, saying, “Egypt has high inflation rates between 8-10% annually, as opposed to European countries which are witnessing low levels of inflation, and therefore more unsettled by this inflation wave.” He pointed out that now is a great opportunity for real estate investment, in light of expectations of a gradual increase in real estate prices during the coming days.

Ahmed Ghozzi, CEO of ACG-ITF, said that virtual exhibitions are still not widely accepted in the Egyptian market, where “The Real Gate” exhibition last year did not achieve a return for the company, however, he stressed that it is too early to judge the return of the virtual exhibitions, which will be the future of the market.

He highlighted the evolution of the buyer’s mindset as they now compare between developers participating in exhibitions, to identify the best properties for residing or investment.

Ghozzi pointed out that the company is communicating with banks to provide mortgage finance and raise awareness of this type of funding. 

Share This Article