Deputy Minister of Housing for National Projects: Investing in Egypt is “definite” and corporate sales are 30% higher than targets, despite Coronavirus pandemic
In the past seven years, Egypt put forward numerous mega real estate projects which kick-in a resounding boom.
During the past 7 years, sizes of developers have increased three to four times
Additionally, a series of investment-friendly measures were adopted. Smart and sustainable communities, such as those in the New Administrative Capital, Alamein, Al Mansoura and Al Galala,etc., came into being.
Relaxing procedures, putting up more lands and creating new methods for land offering, such as on-demand apartment allocations and the partnership between the private and public sectors, helped trigger the boom.
These measures and mega projects have revived demand for projects, generated significant profits for developers and led to the entry of new entities into the market.
Deputy Minister for National Projects Eng. Khalid Abbas disclosed in an interview with Osoul Misr Magazine the investment opportunities available in Egypt, factors boosting the country’s position as a magnet for investors and the mega projects that have been offered recently.
Egypt is a magnet for investors
The investor can outline a long-term investment plan, as demand never comes to a halt
Eng. Khalid Abbas said that Egypt’s real estate tops sectors generating the highest return on investment across the world. “This is attributable to real and growing demand for properties. We see every year a 2.5 million-person uptick in population, together with previous years’ backlog of demand. These increases in population necessitate building housing units, schools, hospitals, commercial and administrative services, etc.
The investor who wants to enter the Egyptian market can formulate a long-term investment plan, as demand keeps growing annually and may not relent under any circumstances in Egypt, in contrast to most other countries.”
Housing units produced by the state and the private companies never meet the annual demand, making investing in Egypt a fairly guaranteed endeavor, he noted.
The state has created an investment-friendly environment during the past few years, as it passed the 2017 Investment Law and its statutes, under which the time needed for incorporations was cut down to just 48 hours.
Also, various incentives were granted to investors to make them at ease and New Urban Communities adopted new mechanisms for land offering that allow for on-demand land allocations.
With monthly updates covering spaces and prices, lands put up for sale are placed on NUCA’s website, from which investors can pick plots of lands of their choice and apply for them.
This mechanism was so transparent that it allowed foreign investors desirous to enter and invest in the Egyptian market to go to NUCA Headquarters, where they can be informed about procedures necessary for obtaining plots of lands and visit their sites, he elaborated, noting that NUCA extends full support to all investors, Egyptians and foreigners.
Partnership
15 plots of lands will be put up for sale in partnership with the private sector within a month
He noted that the mechanism for partnership with the private sector is one among several mechanisms that were forged by NUCA, as it manifests expertise of both developers and NUCA in the field of generating high-end competitively low-priced products.
Partnership projects have already yielded extremely astounding outcomes, as housing units at several projects have been handed out to customers.
“This mechanism enabled investors to funnel the entirety of cash at hand to spend on project constructions, instead of paying for the lands, and thus speeding up the execution and development rates. Still, it enabled NUCA to achieve sustainable returns out of in-kind stakes in the projects.”
He unveiled the imminent roll-out of 15 plots of lands with varied spaces that are apt for partnership with the private sector.
Since 2015, NUCA allowed for partnership agreements to be signed off with the private sector, as it inked contracts with high-profile developers, in adherence of such mechanisms over the past few years, including Mountain View, Arcan Palms, Palms Hills, Arabia Group, SODIC, Iwan, Ora across cities of the new urban communities.
Competing with private companies
The Deputy Minister of National Projects said that NUCA is by no means preoccupied with challenging the privately-owned companies.
“Its entry into the real estate market was to build housing projects to plug the demand gap, particularly for middle-income segments which are underserved by private developers.
Products made by both the private and the public developers fail to meet the real demand. “ If the state was competing with the private sector, we would have seen an uptick in divestiture rates, rather than the incorporation of new companies, which took place in previous years.” “ Companies post increasing annual profits and sales. For instance, last year all companies logged sales surpassing all 2020’s numbers and even their own forecasts by no less than 30%.”
“If NUCA was out to compete with or curtail the private sector, it would have reduced or even halted land offerings, not started off new ones every month,” he said.
Sizes of companies have doubled twice or three times and new entities are popping up, demonstrating Egypt’s volume of development and real opportunities.
Real estate market has a volume of EGP150bn, equivalent to USD10bn, a number that reflects the resilience and importance of the real estate sector, he explained, underscoring NUCA and the private sectors are development partners and no party can achieve its own targets without the other party making some gains.
The 4th Generation
As regards the investment opportunities available in the 4th Generation cities, the Deputy Minister of Housing for National Projects disclosed the ministry’s intent to put up the Iconic Tower at the New Administrative Capital for sale to the advantage of multinationals in the 2nd quarter of 2022.
The Iconic Tower, Africa’s highest skyscraper with a height of 400m, is situated in the Central Business District which includes 20 skyscrapers. Constructions have kick-started lately at New Alamein City to build 5 towers, including the Iconic Tower. Late this year, the towers would be handed out, pending full operation in 2023.
In mid-2021, the Ministry of Housing laid the foundation stone for New Alamein’s 250m-high Iconic Tower, together with awarding China-based CSCEC the construction works of 200m-high 5 towers, whose constructions are scheduled to finalize in the span of 36 months.
Ras El Hikma City, whose overall design is prepared right now, will also be an epitome for integrated cities.
