(Photo by Thoraia Abu Bakr)
Arab investments did not exceed 3.5% of total investments on lands, worth EGP 68bn, owned by the Tourism Development Authority (TDA), according to the TDA’s data.
“The movement of migrant Arab capital in Egyptian tourism and real estate sector is still slow and awaits incentives,” said Adel Rady, chairman of the Tourism Investors Association (TIA) in Marsa Alam.
Rady added that Egyptian investors demand competitive incentives that guarantee good profit.
He also said that total Arab investments in Marsa Alam are estimated at $2.5bn, a weak rate compared to available investment opportunities in Marsa Alam. Investors, however, are suffering from slow procedures in the public sector.
“Marsa Alam can accommodate investments that exceed $10bn in the sectors of tourism and real estate investments, on condition of providing the right climate, reassuring investors and speeding up procedures,” according to Rady.
“Arab capital invested in the Egyptian tourism sector is owned by a group of large Arab families like Al-Sharbatly, El-Shobokshy and Al-Kharafi,” said Rady. “We are looking for a variety of Arab capital, not as a sort of political support, but it’s rather due to the competitiveness of tourism investment in Egypt.”
Land allocation is still the biggest issue for investors, and it has become more complicated now with the delay in the issuance of the executive rule for the new investment law. The law states that land allocation will only be through the committee, which has not been set yet, according to Rady.
“There is a huge plan to market for mega projects, as well as investment opportunities in the tourist investment sector in Egypt for several Arab countries,” as per a Ministry of Tourism source. The source also said they are dissatisfied with the volume of Arab investments in the tourism and real estate sectors.
The government official confirmed that the Economic Summit revived activities in all investment sectors. He reassured domestic and international business communities of the government’s desire to undertake economic reforms and improve the business practice climate, whether financially,legislatively or administratively.
Emaar Misr is competing with the Saudi businessman Fahad Al-Shabkashy as a representative of Al-Arabia Real Estate Development Company on the Zayed Crystal Spark project. The project covers a total land area of 190 acres, with investments worth EGP 8bn, excluding the land value, and with an investment income between 25% and 30%.
Emaar Misr also made another proposal to develop an urban project on a land area of 410 acres in Shiekh Zayed City. The company is competing with SODIC, Badr El Din Real Estate Projects, Al Offoq, and the Saudi investor Fahad Al-Shabkashy.
The land area, covering 410 acres, on a hill north of the SODIC-owned Westown project, means that the Arab capital investment movement in the tourism and real estate sectors is starting to recover. However, the government source said that they hope for more.
According to Ahmed Balbaa, Chairman of the Tourism Committee in the Egyptian Businessmen’s Association (EBA), there is hot competition amongst Arab countries. For example, Dubai competes through its tourism and Saudi Arabia through its industrial sector, while Egypt is working on improving the investment sector.
Balbaa believes the Arab surplus is looking for investment opportunities and countries with competitive advantage and good income on investment. Investment in Egypt’s tourism and real estate sectors needs great efforts to compete with the tourism investment in Dubai, for example. “However, we rely on the new legislative and administrative reforms,” said Balbaa.
During the Economic Summit, Chairman of the Saudi-Egyptian Business Council Abdullah Bin Mahfouz said that “protecting the investors’ rights in Egypt is vital, especially for long-term investments”.
He added that Egyptian authorities are flexible when it comes to attracting investments to the country, and new rules are beneficial to investors. However, he pointed out that they are waiting for the final executive rule of the new investment law to increase the competitiveness of their investments in the Egyptian market.
