Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA), has highlighted the importance of securitization mechanisms for real estate companies, citing the New Urban Communities Authority (NUCA) as an example. He revealed that NUCA had issued securitization bonds exceeding EGP 40bn, providing liquidity to support its activities and drive urban development in Egypt.
Speaking at the opening of the “The Investor.. Real Estate” conference on Monday, Farid announced that the FRA plans to establish electronic funds after completing the insurance component through property title insurance. This will require reinsurance companies for documents related to residential units, which will help promote real estate abroad.
He noted that these documents will support the export of real estate in both coastal and inland areas. Insurance companies will provide trust and credibility to investors, offering compensation in case of disputes over properties.
Farid also disclosed that listing on the Egyptian Exchange (EGX) plays a key role in driving growth for real estate companies, increasing equity and expanding operations. Companies listed on the EGX have achieved a 20% return on equity, with medium-sized companies seeing their equity increase from EGP 140m to EGP 14bn.
The FRA Chairperson explained that the Authority has introduced new accounting standards related to the revaluation of fixed assets and real estate investments, which are vital for the real estate sector. Additionally, the Authority has made amendments in the area of real estate funds. Farid emphasized that, given Egypt’s vast real estate wealth, it is unacceptable to have only two real estate funds in the country. He stressed that funds help transform stagnant assets into productive ones, and that real estate companies often require quick liquidity, which can only be achieved through real estate funds and securitization bonds.
Mohamed El-Sayyad, Deputy Chairperson of the FRA, further explained that one of the key advantages for companies listed on the stock exchange is the ability to secure appropriate financing. He added that listing on the Egyptian Exchange (EGX) enhances transparency, as all information and developments concerning listed companies are made publicly available on the stock exchange platform.
El-Sayyad noted that the real estate sector is the third most significant sector on the EGX in terms of size and importance. He further highlighted that the EGX includes 780,000 investors, creates market value for company shares, and provides companies with opportunities to secure funding through capital increases and other financing avenues.
