Posted On Feb 16, 2019
Cityscape Egypt concluded its seventh edition on March 31, showcasing how the Egyptian real estate market continues to provide new opportunities, with some of the country’s leading developers highlighting new, varied projects throughout the exhibition.
The event hosted over 70 exhibitors who offered special promotions and discount and was held at a new venue: the Egypt International Exhibition Centre New Cairo. It has witnessed an increase in the number of visitors this year, according to a released statement by Cityscape Egypt media office.
The Egyptian Minister for Housing and Urban Development Mostafa Madbouli stated during the exhibition, “The Egyptian real estate sector is one of the largest and most influential sectors and enables investors to draw on a wealth of opportunities with high returns from a ballooning population.
This will contribute to market strength as well as attracting local and international investors.” He emphasized that the high participation of real estate developers showing projects from the New Administrative Capital makes Cityscape one of the most distinguished events.
Madbouli spoke about the government’s future plans in the real estate market, noting that more than 75,000 land plots will auction next month in parallel to finalizing the evaluation of the second phase of the Public-Private Projects (PPP) of 12 land plots.
Developers who have taken the risk to pursue construction and selling of their projects over the past year, in a tense atmosphere of rising inflation and instable currency, are expected to yield fruitful results throughout 2018, according to real estate experts.
As both real estate investors and experts keep an observant eye over the market, Cityscape launched its seventh annual edition on January 18 at the Cityscape Egypt Business Breakfast titled “Exploring New Frontiers on Egypt’s Landscape”.
“One of the government’s economic goals is expanding urban development to 12% by 2030 compared to the current 7% through developing new cities with the aim to spread the overcrowded population in Cairo. This goal needs to be achieved through attracting more foreign and domestic investments to these new cities,” said Fathallah Fawzy, head of the 2018 Cityscape Egypt conference, in his speech during the inauguration of Cityscape Business Breakfast on January 18.
The business breakfast brought together some of the prime real estate developers in the market from the both the public and private sector to examine long-term plans for the sector’s sustainability and study potential implementation of PPP models outside the borders of Cairo. According to JLL’s Head of Egypt Office Ayman Sami, this year’s Cityscape Egypt’s breakfast had a special focus on investing in Upper Egypt and studying feasible development options.
Meanwhile, Fawzy elaborated that pumping new investments into Upper Egypt will require following a clear investment roadmap that should be announced by government within six months. The plan should be renewed and developed on a constant basis, alongside allocating the suitable funds needed to develop projects catering to the needs of different segments.
“The aim of our Business Breakfast is to create an informative and innovative platform with the country’s foremost real estate experts and set the tone for our upcoming 7th edition of Cityscape Egypt,” says Chris Speller, Cityscape Exhibition Director in an exclusive interview provided to Business Today.
The upcoming period is expected to witness new announcements of tenders in public projects such as Sakan Misr, Dar Misr, and completion of the first phase of the New Administrative Capital, New Alamein City, and New Mansoura City, according to Madbouli.
“This economic rebound will be typified at the four-day exhibition this year as developers are expected to respond with a wave of flexible, attractive plans following renewed interest in the market from both investors and homebuyers,” said Chris Speller, Cityscape Egypt’s exhibition director.
The exhibition hosted a number of significant projects showcased by some of the attending participants, including Tatweer Misr which launched three new projects at the exhibition including Fouka Bay located in North Coast featuring 1,000 housing units and 1,000 hotel rooms that will be completed by 2020, Bloomfields in New Cairo, and IL Monte Galala located in Ain Sokhna.
Other projects exhibited include Beta Greens New Cairo located in Mostakbal City, which will be developed by Beta Egypt for Urban Development and features 3,000 homes; the first phase will be completed in 2021. The North Coast’s Blues Tiffany is another project that was exhibited, and was also the exhibition’s platinum sponsor.
Developed by PROJECTS, Blues Tiffany was offered with a 10% discount rate at the exhibition.
Madaar Development displayed their prime project, Azha, a high-end waterfront project located at Ain Sokhna featuring villas, spas, and community centers. Azha was offered at a 15% down payment and an eight-year payment plan at the exhibition.
Amidst the Egyptian economy commencing towards stability, real estate developers are optimistic about the real estate market vowing to carry promising opportunities, and strong demand in a country that will inevitably create an encouraging Egyptian narrative for 2018.
Egypt is on track to spur more real estate investments for both local and foreign investors in 2018, as one of the world’s leading exhibitions - Cityscape Egypt -brings new incentives next March. In 2017, Cityscape Egypt hosted a total of 92 exhibitors and 17,754 visitors.
Confirming the importance of the event to the Egyptian real estate market, Speller stated that Cityscape Egypt has managed to act as a barometer for the industry over the past six years by fostering partnerships and creating new opportunities, while also facilitating an intellectual, fact-based dialogue that tackles the sector’s needs.
Speller mentioned in an interview that the property market has witnessed stability and an increase in investor confidence following austerity economic measures imposed by government. Looking forward to a positive and busy year for the real estate market, Speller confirmed that this year’s edition will not only attract foreign investors and Egyptian expats in search for second homes, but also provide a multitude of exhibitors who will speak out on how they plan to tackle this demand as they expand their companies’ portfolio in different neighborhoods across the country.
Some of the of exhibitors attending this year include Palm Hills Development, SODIC, Hyde Park, and Talaat Mostafa Holding, among other prominent developers and exhibitors from Egypt and around the world who displayed their real estate projects.
This edition’s special sponsor is Projects for Real Estate Development which exhibited its recent project in North Coast called Blue Tiffany.
The Business Breakfast will be followed by a conference on March 12 and 13, marking two weeks before the exhibition kicks off on March 28 and ends on March 31 at the Egypt International Exhibition Center (EIEC) in New Cairo. The Cityscape Awards for Real Estate in Egypt will also be held on March 13, celebrating unique companies who were able to ensure excellence in real estate development, architecture and innovative thinking.
Real estate Market performance
Speller has unveiled what’s in store for this year, as Egypt’s economic reform program commences on track, mentioning that both investors and developers have been positively responding to government’s aggressive measures in creating a prosperous economy. As a result, it has created market resilience allowing investors to proceed with the construction of existing projects and the launching of new ones.
Addressing real estate market performance, Sami advised developers to invest in new projects and offer end-consumers feasible payment plans to guarantee success.
Cityscape’s press report has explained that the residential market is currently paving the way to an enhanced market condition in 2018 despite remaining a central issue. The residential sector is expected to continue to improve amid government attempts to implement the new investment law slated to attract investment in the real estate market, and other markets, through eliminating stalling bureaucratic procedures.
As Cairo continues to massively increase in population to over 20 million citizens, the demand for homes in the capital continues to surpass supply. Cityscape will play a role in filling this void by connecting homebuyers with much-needed quality housing. Current homebuyers include 50% of Cairo’s residents, whose ages range between 15 and 40 years old, emphasizing that married citizens make up a larger portion of the market demand. According to a report released by Oxford Business Group, an estimated 900,000 marriages take place in the country annually.
The government has contributed to the market’s performance through preparing land tenders as well as completing infrastructures and basic facilities in many areas, including the latest cities located west of Assiut and New Qena City, according to Technical Affairs assistant to Ministry of Housing and Urban Communities Khaled Abbas. The government’s achievement comes as part of the national plan to develop Upper Egypt, which commences next April.
“The Ministry of Housing is close to executing the investment roadmap that will be updated in six months, which enables real estate developers to choose the suitable investment opportunity. A similar plan that has been implemented by the ministry is the offering of land tenders for companies and individuals every four months to build diverse residential projects,” Abbas stated at the Cityscape Business Breakfast.
The government has also worked on mega projects including New Alamein City, a project that relies on developing touristic activities through building 10,000 – 15,000 hotel rooms in the city and creating industrial activity through offering land tenders to industrial companies.
Real Estate Market opportunities
As the market has become more attractive post-floatation for foreign investors and Egyptian expats, opportunities are shifting from the usual Greater Cairo market to Upper Egypt. Sami described that there is “untapped” potential in Upper Egypt, where seven governorates make up approximately 25% of Egyptian population. In late March, Cityscape will hold a presentation on the need for developing Upper Egypt’s residential, retail, healthcare, and education sectors.
Other anticipated projects embarking on the Egyptian market outside Greater Cairo will be led by real estate developer Beta Egypt. It is a project that plans to obtain new lands for its Beta Greens initiative that will span over 84.7 feddans in East Cairo at the Administrative Capital, or Mostakbal City in New Cairo, according to a statement released by the company. Beta Egypt will also expand its development portfolio in the 6th of October northern development, El Sheikh Zayed, North Coast, and in Ain El Sokhna.
The Beta Greens project has been expanded in Egypt’s post-flotation era; however, it has not witnessed an increase in units’ prices. In order to maintain fixed price offered to end consumers, Beta Egypt had to endure a harsh 40% increase in costs of construction materials, labor wages, and scarcity in resources. The company is also targeting works throughout 2018 that will include the completion of the last phase of October Garden’s Beta Greens Project, the inauguration of October Garden’s Gold Mall, and finalizing Greens Mall to open in 2019.
Other market opportunities were triggered by the public sector where the government offered developers long-term payment plans, provided reasonable prices per square meter, and reduced other costs. Abbas has also vowed that the government will finalize the government-residential district at the new Administrative Capital City by the end of 2018.
Several developers have urged government to offer lands to real estate developers at a feasible selling price in cities located in Upper Egypt to encourage sustainable development and attract more investments, given that land tenders for industrial purposes have been previously offered for free to investors, according to Ashraf Dowidar CEO of ARDIC for Development and Real Estate Investments.
He also pointed out at the Cityscape Business Breakfast that ARDIC has been extremely interested in investing in Upper Egypt for over two years; however, ARDIC was always challenged by several obstacles including the lack of technical information regarding all cities in this region.
Market Trends & Expectations
Many homebuyers have begun to show new interest in the capital’s promising areas that are currently being expanded, according to Cityscape experts. Market trends over the past period featured homebuyers in search for fully complete, mixed-use development including apartments, townhouses, and villas near work, schools, retail markets, and hospitals. The latest in the growing list of suburban cities is the New Administrative Capital featuring a slightly lower rate than other established cities, offering affordable down payments and flexible payment plans.
Chairman of Beta Egypt Urban Development Company and board member of the Real Estate Investment Division at the General Federation for Chambers of Commerce, Alaa Fekri, explained that developers are willing to launch numerous real estate projects during the year as robust demand for Egyptian properties is expected to appear in the second half of 2018.
“In response to a highly-expected decrease in deposit interest rates, secondary-market investors may step up demand for properties during 2018, as prices of real estate units may beef up by 20% owing to hikes in building materials,” Fikri said in the company’s press release.
The upcoming Cityscape Egypt exhibition will not only bridge the gaps between homebuyers and developers, but will also act as a reliable spectrum in which new innovative ideas, market challenges, and resolutions will be discussed in order to pave the way toward a prosperous, growing industry.