CAIRO: Upper-income housing is not yet saturated and middle-income housing is on the rise, said Maher Maksoud, CEO of real estate developer SODIC.
Speaking at a conference Monday, Maksoud said the real estate market is developing in a way that has not been seen in the past 20 years. There is demand for around 500,000 units per year of which only 150,000 are supplied, meaning that there is a shortage of units, he added.
While some talk about a downturn in the market and an oversupply of real estate, SODIC says an increase in sales and investments tell another story. “From our sales in Allegria we see that upper-income housing is sill not saturated and doing well. Middle income housing is increasing rapidly with more units for less than LE 750,000 being demanded,” he said.
“The middle class in Egypt is increasing with Egypt’s improving economic performance and they are increasing demand in higher quality real estate,” he added.
Reuters reported on Monday that a consortium including SODIC is developing a $37 million mall and entertainment center in Mansoura on the Nile Delta.
The consortium, comprising SODIC, Juhayna and a number of businessmen, won a Trade Ministry tender to lease 63,000 meters of land in Mansoura, 100 kilometers north of Cairo, for up to 50 years, a SODIC official said.
"This project will be a platform into other secondary cities, a pioneering project," SODIC Chief Business Development Officer Ahmed Demerdash Badrawi told Reuters, adding that they plan to replicate the project in other cities.
The project, in which SODIC holds a 35 percent stake, will have a built-up area of around 6,000 square meters, he added. Total investment is expected to reach LE 210 million ($37 million), according to Reuters.
SODIC officials discussed plans for two mixed-use city centers in Eastown and Westown which are expected to lift a load of the congested heart of Cairo. Eastown and Westown, being developed in partnership with Solidere International, are located in New Cairo and Sheikh Zayed/Sixth of October City, respectively.
Maksoud said SODIC will need to raise LE 1.5 billion through loans from banks in the next 18 months to invest in these projects.
“We anticipate that each of these projects will have populations of 3-5 million people,” Maksoud said.
Mounib Hammoud, COO of Solidere International, said, “We have built up considerable expertise, and have developed strategic relationships during our endeavor to rebuild Beirut’s city center,” which will help them address some of Cairo’s urban challenges.
David Cis, junior partner of the Rome McKinsey Office, and an expert on urban planning, spoke about how proper urban planning in mega cities like Cairo.
“Block by block” planning, similar to Eastown and Westown, “should consider a proper mix of different solutions not only low density new gated communities, but also walkable dense mixed use areas,” he said.
Two areas within Westown — Forty West and Polygon Business Park — have already been launched, with investments amounting to LE 500 million and LE 600 million, respectively.
SODIC said it has delivered the first villa in Allegria earlier this week, about a year ahead of schedule.
Eastown and Westown amount to a combined investment of LE 35 billion in Egypt’s real estate market.
