Real estate developers affirmed the ability of Egypt’s real estate market to cope with new market changes and explored the challenges facing the sector and how to overcome them. This was during the 7th Think Commercial roundtable titled “Rise of Diversified Real Estate Market” that took place on Wednesday.
The first discussion session, “The Future of the Real Estate Development Sector,” examined the companies’ plans to adapt to the high cost of construction, the pricing mechanisms for new projects, and the sales performance of the companies last year and since the beginning of this year amid the current economic conditions.
The roundtable was attended by government officials, representatives of major real estate development and mortgage financing companies, industrial developer companies, parliament members, and business organizations.
Walid Abbas, Assistant Minister of Housing, Utilities, and Urban Communities, said that the government’s support for the real estate market helped the companies deal with the market challenges, which benefited all real estate developers. He added that these facilities were agreed upon by both the government and the private sector. He also said, “If there are new demands from real estate companies, developers can present them and they will be studied to see their feasibility. Thus, the state and developers complement each other, as their success is mutual.”
Tarek Shoukry, Head of the Real Estate Development Chamber at the Federation of Egyptian Industries, praised the Cabinet’s response to the demands of real estate developers, which were mentioned by Abbas. He said that this contributed to creating a free real estate portfolio, which means improving the efficiency of land and investment. He explained that if there is a project with a million square meters, 100,000 meters will be given for free.
Abdallah Sallam, CEO and Managing Director of Madinet Masr said that the issue of unit pricing requires continuous review in light of the exceptional circumstances of the Egyptian pound flotation and the current inflation rates. He added that Madinat Misr holds weekly meetings to monitor price developments for each unit within each project of the company, as the pricing of each project differs from the other. He noted that under the current circumstances, companies should be more flexible in dealing with these issues. He explained that losses in one phase of a project can be compensated through the next phase of the same project. Sallam concluded, “The Egyptian real estate market is a promising market despite the challenges facing it. 35,000 housing units were delivered this year, which indicates an increase in the rates of unit delivery at the level of Greater Cairo although there was a 38% increase in prices.”
Mohamed Abd El-Ghany, Founder and Chairperson of the Engineering Consulting Bureau (ECB), said that maintaining the continuity of the real estate market’s operation is a shared responsibility for everyone to maintain its strength. He noted that any setback for any developer does not benefit the market and the entire economy. Abd El-Ghany explained that there is growth and increase in requests from clients from real estate companies to study value engineering and use its principles from the first step of working on the project to reduce cost and maintain quality.
Maha Abdel Razek, Managing Director for Finance and Investment at Misr Real Estate Assets Management, said that there are great facilities provided by the state regarding licenses. She called for the participation of the private sector in urban projects. She added that young people and investors have started to resort to projects downtown.
Raymond Ahdy, Deputy CEO of Wadi Degla Developments, said: “To activate and strengthen property export, we must intensify our efforts to market the real estate product at international conferences and exhibitions and in front of international media outside Egypt. This topic is like a whole network that includes promoting tourism and residence in Egypt and providing benefits of granting Egyptian citizenship to Arab and foreign buyers, especially those who have been living in Egypt for a long time and looking for an opportunity to live in properties owned by them instead of renting.”
Tarek Abdel Rahman, Managing Partner at Compass Capital, spoke about the economic conditions causing an increase in prices or shortage of goods inside commercial malls or centers due to inflation. He said that this issue will be resolved soon.
Mohamed Galal, President and CEO of TSM Mall Management, said that there is a need to study the market well and provide strategic solutions between contractors and investors, especially after the COVID-19 crisis and online shopping trends. He also said that real estate developers contributed to a contraction in the entertainment market due to focusing on investment purposes. He stressed paying attention to family clubs and entertainment places within residential complexes.
Ayman Abdel Hamid, Managing Director and Vice Chairperson of Al Taamir Mortgage Finance – Al Oula, discussed financing problems caused by global economic crises and the difficulty of mortgage financing. He said that financing law allows many measures that can solve part of the problem so it must be activated. Abdel Hamid called for coordination between financing entities to provide liquidity to real estate developers and resolve mortgage financing crises under construction.
Alaa Fekry, Chairperson of Beta Egypt, expressed his dissatisfaction with the first offer to sell land to companies that pay in dollars, while the second offer to buy is in Egyptian pounds. He said that it is unfair that he becomes a “second sort” just because he cannot buy in dollars in his country. He demanded a solution to this problem.
Fekry also revealed that the tourism sector needs to be developed and facilitations must be provided in granting land. He pointed out that there are 220,000 serviced apartments and the market needs a similar number, but achieving this is difficult due to the high prices of land.
Hisham Hilal, Founder and CEO of Criteria Design Group, said that real estate development is not a luxury, as they face the challenge of increasing competitive value while reducing cost, which is what consultants are working on. He said that they aim to achieve international standards in buildings, whether they are sustainable or of the fourth generation.
