CAIRO: With construction projects in Egypt springing up left and right, it’s hard to keep track of the latest developments. From local developers to foreign investors, there’s more property on sale than ever before – and the buzz word is upscale.
One of the boldest projects is Madinaty, spearheaded by the Talaat Mustafa Group. Dubbed the city of a million people, industry experts do not expect Madinaty to be complete until 2024.
“It is a sizeable project and has a significant effect on the real estate market, Ismail Sadek, analyst and construction market expert at Beltone Financial, told Daily News Egypt.
Like many of the projects underway, Madinaty, which is being built on the Cairo-Suez road, will attract the country’s wealthiest. The real estate is expected to draw LE 4,000 to LE 5,000 per square meter.
Still, Sadek is quick to note that Madinaty may be more financially accessible than other building developments because of it offers competitive payment schemes.
Another home-grown developer, Sixth of October Development and Investment Company (SODIC), is in the process of building up Alegria, an upscale residential project on the Cairo-Alexandria Desert Road. Covering 2.38 million square meters, Alegria features landscaped greenery, a signature 18-hole Greg Norman golf course and a 3,2000 square meter clubhouse, as well as more than 1,000 luxury villas and townhouses.
SODIC recently added Kattameya Plaza, an upscale gated residential project in New Cairo, to its portfolio of developments. Sales of Kattemeya Plaza’s 524 apartments were launched and the project will be completed in 2011.
The company is also working on two large scale city centers in Cairo’s new suburbs: Solidere Eastown, being developed over an 858,000 square meter plot in New Cairo, and Westown, being developed over 1.2 million square meters on the Cairo-Alexandria Desert Road. The centers will combine residential, commercial, retail and entertainment facilities.
SODIC has a 20 percent stake of the Casa project, which is being developed by Palm Hills, offering “low-density upscale apartment building complexes. Sales were launched in May 2007, and around 50 percent of the project’s units are already booked. Units are to be delivered over the next four years.
Egypt’s tourism development powerhouse Orascom Development Holding (ODH) recently launched Byoum Residence, the first luxury real estate complex in Fayoum. Byoum Residence covers 103 feddans and is situated along Lake Qarun. It will boast 142 villas, a five-star hotel, a commercial center, hunting grounds and Fayoum’s first-ever marina.
Volatility in global housing markets has not deterred the region’s premier development firms from doggedly pursuing a wealth of new projects in Egypt. With a staggering $11.1 billion in foreign direct investment last year and $7.8 billion in the first half of fiscal year 2007/08, Egypt overtook South Africa as the prime destination for foreign investment in the continent. A large chunk of that FDI is pumped into the real estate market by Gulf developers.
Two remarkable trends have emerged from the current construction boom that may have broader national implications in the years to come. Foreign investors have exported their own ingenuity and have become leaders in the Egyptian market. Additionally, many of the projects currently underway target high-end consumers, and it remains to be seen whether the momentum in the construction market will translate into greater down-market opportunities.
One of these firms, Emaar – the Emirates’ largest construction firm – launched in mid-2007 Uptown Cairo, which is being built on a tight schedule to be completed by 2013. Plans indicate that it will cover an area 4 square million meters.
Away from Cairo, vacation villages continue to spring up along Egypt’s two coasts, and Emaar is present with Marassi, a mixed-use tourism project about 100 km west of Alexandria.
Marassi’s 3,000 room hotel promises to compete with neighboring behemoth Porto Marina. At 6.2 million meters squared, Marassi, which should be finished by 2012, will be “one of the most expensive projects on the North Coast, said Sadek.
The firm has two other projects in the works: Cairo Gate and New Cairo City
Damac is one of Emaar’s primary competitors in the Emirates, and the two mega developers are competing locally as well. The company made its debut into the Egyptian market in 2006 with Gamsha Bay, its Red Sea township project, which will cost a hefty $16 billion of investment over 10 years.
The company is also making its mark on New Cairo with Hyde Park, invoking one of London’s swankiest neighborhoods. Hyde Park is undergoing a three-phase construction plan. The first phase of building should be completed by 2011 and “sales are 100 percent complete, said Sadek.
Park Avenue at New Cairo, also being developed by Damac, is billed as the biggest retail destination in the Middle East. Fusing Mediterranean and classical architecture, the two buildings boast a public park in the center along with courtyards, fountains as well as sidewalk cafes and restaurants. Phase one is sold out and the second phase has been launched.
Damac’s most recent development is Rivoli at Centre Ville, New Cairo, a cluster of six blocks comprising of luxury apartment buildings.
Emirati companies are not the only foreigners capitalizing on Egypt’s building boom. Kuwait’s Al-Kharafi Group has been developing a mega project on the Red Sea’s Marsa Alam for several years. Port Ghalib is resort community sprawling over 29 million square meters, with nine different themed villages.
The focal point of the project is an international marina with full customs and immigration facilities and a full service ferry terminal. When it is completed in 2013, it is expected to become an alternative gateway into Egypt.
Cairo Festival City represents yet another ambitious project underway in Egypt. Led by the Al-Futtaim Group, and modeled after Dubai Festival City, the Cairo version promises to offer a mix of commercial and residential uses. Designed to cover 3 million square meters, Cairo Festival City is set to open in 2012.
Market watchers anticipate that the influx of foreign investment in the construction market will have direct benefits for Egyptians. For one, foreign competition may serve as a means of spurring competition locally. Faced with losing contracts to foreign investors, Egyptian companies may be pushed to vie more ambitiously for projects. “I see this as a positive to make competition between local companies, argued Sadek.
Furthermore, the vast scope of so many of these projects, regardless of the country of origin, will serve as a vehicle of employment for thousands of Egyptians, a fact not easily forgotten in these uncertain economic times.
One concern, however, with the booming construction industry is that so many of the projects have tended to target the wealthy. The question remains whether there is enough wealth in Egypt to fill the tens of thousands of houses being built across various developments.
“I’m wondering where the demand is coming from, says Sadek. “I don’t see the distinction between the different developments.
Some hope that once the high-end market has been placated, development firms will turn their attention to projects targeting lower-income Egyptians.
“When they see the market is saturated with high-end developments, says Sadek, “the developers will look towards other classes.
Egypt’s construction boom stands to benefit the country at large – that is if the construction firms, both national and international, can strike an appropriate balance. -Additional reporting by Amira Salah-Ahmed
