By Mohammed Darwish
Minister of Investment Ashraf Salman has announced plans to offer real-estate for investment and development in several sectors in January 2016.
He made the statement at a conference organised by the US Chamber of Commerce dealing with the real-estate development industry in Egypt – titled “Opportunities and Challenges”.
The Egyptian government is preparing a database of land to be announced in accordance with rates specified by the General Authority for Investments (GAFI). He anticipated that the offer will contribute to price reductions.
He said the government’s plan to partner with developers to implement new cities includes the planned administrative capital, East Port Said and New Alamein. The growth rates in the real-estate sector will reach 15% in 2015 compared to 11% in 2014.
The government is not solely responsible for increases in the price of land, because some companies got the land years ago at cheaper prices but sell the units in today’s prices.
“If we exclude the value of the land from the equation, we find that companies raise prices without justification,” Salman said. “Go back to your offices and compare the price of land to the value of the unit and compare the rate of return on real-estate investment in Egypt to that in other countries.”
The real-estate sector in Egypt is considered one of the fastest growing sectors, with growth reaching nearly 11.6% within the first nine months of FY 2014/2015. Sector contributions reached 4.7% of GDP for FY 2013/2014, compared to contributions of 4.1% of GDP in FY 2014/2015.
Salman said there are nearly 31 public contracting companies in Egypt and about 36,000 private companies.
The amount of implemented investments in the sector reached nearly 13.6% of total implemented investments from July 2014 to March 2015, which makes it one of the most attractive sectors for investment.
The sector is able to accommodate a large amount of labour, which reached nearly 11.42% of total labour in Egypt. He said the sector is able to accommodate even more investments, as well as labour, on many different levels.
According to Salman, the reform efforts in all economic sectors are part of the executive programme of economic and social reforms, which aims to achieve comprehensive development by attracting investments in sectors of infrastructure, roads, energy, and other sectors related to urban development.
He said Egypt’s location on the map enables it to become an international economic center, especially after the completion of the new Suez Canal project, which opens up areas of land for development that have never been built on before.
There is a large annual increase in the demand for real-estate in Egypt, caused by the increase in population.
The government has passed legislation aimed at facilitating foreign investment. The most prominent initiatives involve the one-stop shop and mechanisms to allocate lands for investors. Others include help in obtaining necessary licenses and permits to begin activity, and a number of initiatives to boost financing in the real-estate sector.
