Egypt’s real estate developers discussed their plans to expand in the coastal projects sector, the incentives required from the state to keep up with the growth in coastal projects, and the serviced apartment market in Egypt and the demand for it. This was during the 7th Think Commercial roundtable with the theme “Rise of Diversified Real Estate Market” that was held on Wednesday.
Mohamed Samir, an expert in mortgage finance and banking, said: “Egypt needs 500,000 serviced apartments to accommodate the 30 million tourists it aims to reach by 2028.”
Hisham Zaazou, former Minister of Tourism, said that in Egypt there is still confusion between hotel apartments and serviced units. He noted that there are no regulatory controls for hotel units and their marketing in Egypt yet. He said that the Ministry of Tourism has not yet set controls for hotel units, unlike the Gulf countries.
Zaazou added: “We have an opportunity to increase investment in hotel units due to the political and security stability in Egypt, the current exchange rate, and the presence of cities such as North Coast and the Administrative Capital. Hence, there is demand for hotel units, but it is random. However, there is not enough supply of serviced units.” The former Minister of Tourism recommended having an indicative contract that would help reassure investors. He considered that legal protection for investors is an essential part of developing marketing for serviced units.
Mohamed Montaser, First Vice Chairperson of the Tourism and Civil Aviation Committee, confirmed that the places that have hotel apartments in Egypt are Sharm El-Sheikh, Hurghada, Luxor, Aswan, and Marsa Alam. He said that obtaining land in those governorates is difficult. He stated that the British are the largest investors in buying hotel apartments outside their country. They invest £10bn annually in buying serviced units around the world. Egypt’s share is very small. He said that a large segment of them must be attracted by meeting their requirements.
Montaser noted that Egypt needs to build serviced apartments for $30m within 4 years to accommodate the number of tourists targeted to reach them. He said that Egypt faces a problem with financing as well as another problem related to infrastructure, including aviation.
Asser Hamdy, Chief Executive for the hospitality division of Amer Group, said that a large segment of tourists are over 60 years old. He said that areas where hotel apartments are built must have a hospital or emergency clinic. Hamdy proposed to the Ministry of Tourism to form a council to be the only one responsible for talking to investors in the field of branded housing.
Abeer Essam, Chairperson of Amar for Real Estate Development and member of the Real Estate Development Chamber said that the 6th of October City, west Cairo is a tourist city. She said that it was never expected to have hotel apartments in that city, but the universities turned it into a tourist city. She added that commercial malls also contributed to developing it as a tourist area after the increase of Arab tourists. She said that residential apartments were converted into hotel apartments for housing students and their families without control until the matter was legalized when lands there were offered for serviced apartments.
Mohamed Al-Bostany, President of the New Cairo Developers Association, highlighted that Egypt lacks real estate units suitable for the number of tourists it aims to reach. He said that the New Administrative Capital has only four hotels even though it has everything related to the Arab world, including ministries, embassies, and others. He said that this requires providing more units. Al-Bostany pointed out that serviced units are one of the best investment opportunities. He said that they can achieve greater profits than commercial units.
Karim Mamoun, CEO of Serac Developments, stated that the North Coast is important in Egypt’s new form of tourism. He said that Egypt is very weak in marketing tourism. He said that Egypt did not take advantage of the Russian-Ukrainian crisis as Dubai did. He said that a real marketing plan must be developed and the needs of tourists must be met. He noted that the North Coast must be marketed through celebrities such as international player Mohamed Salah and new ideas to promote tourism must be developed.
Tarek Eid, a Member Board of Directors of El Riyad Castle, confirmed that Egypt received 7 million tourists in the first half of this year. He said that it is expected that they will reach 15 million tourists by the end of this year. He said that Egypt cannot receive a larger number due to the lack of serviced rooms. He said that Egypt aims to reach 500,000 hotel rooms within 5 years. He highlighted the need to pay attention to investment in branded units in governorates such as Luxor, Aswan, and Siwa Oasis.
At the end of the session, recommendations were issued regarding the need to pay attention to developing a marketing plan for hotel rooms and to form a supreme body in which all ministries and agencies are represented. This body would have a provision for the lands on which serviced apartments are permitted. In addition, a golden license would be granted to companies that export Egyptian real estate.