CAIRO: At the Al-Ahram Conference for Real Estate Investment this week, most attendees painted a positive and optimistic picture of the future of Egypt’s real estate sector.
Taha Abdel Alim, general manager of Al-Ahram Foundation, addressed real estate developers and investors at the beginning of the conference on Monday, saying that Egypt is an attractive venue for real estate investment, owing to the government’s strategy of providing basic utilities to new communities, not only in urban areas but also in Upper Egypt and the Red Sea.
He added that the economic decline in Egypt after the financial crisis hit was “psychological rather than market driven, assuring that the real estate sector saw high demand during the last few years.
Amr Badr El-Din, CEO of Badr Investments, said his company is working towards lowering the cost of units by eliminating the intermediaries’ role and acquiring raw material directly from the producers on wholesale prices.
Badr Investment is part of Mubarak’s National Housing Project and has so far delivered 1,100 units.
The Ministry of Housing provided 1,000 feddans to 250 NGOs specialized in housing under the presidential initiative “Build Your House, Mohamed El-Demerdash, assistant housing minister, said.
He added that the consumption of steel in April 2009 reached a new record of 740,000 tons, compared to 400,000 in April of 2008.
El-Demerdash attributed the hike to a huge construction movement in Egypt. He said the first three months of 2009 saw a 16 percent growth rate in the construction sector, compared to a mere 4 percent in the other sectors in Egypt.
However, steel prices as well as demand have seen a sharp decline in the wake of the availability of imported steel particularly from Turkey.
El-Demerdash also pointed out that the Ministry of Housing has put off collecting 75 percent of financial obligations from developers and contractors until the end of 2009, in order to keep the pace of the sector and save tens of jobs.
On a broader scale, the conference’s second session tackled the non-residential real estate market such as tourism, industrial services and administration developments.
Darwish Hassanein, general manager of the Saudi Egyptian Construction Company, stressed the importance of focusing on expats, who are in Egypt on extended stays.
“A standardized contract provided to Egyptian embassies abroad will encourage this kind of tourism, said Hassanein, “but at the same time other kinds of construction development are needed, for instance service buildings, entrainment facilities, etc, he added.
Ultimately, Hassanein explained, this development will create more jobs.
However, one main problem will remain; “the bureaucracy, Hassanein said.
Nehad Ragab, chairman of the board of SIAC, Industrial Construction and Engineering Company, highlighted the important of industrial developers.
“It’s not about building factories, it’s about massive developments to attract other investors, he explained.
He cited industrial development locations in Egypt, such as in Sixth of October and Tenth of Ramadan.
A 2-million square meter industrial development zone can create 20,000 jobs, and “gives the opportunities for Small and Medium Enterprises (SMEs) to be established to feed bigger projects.
According to Ragab, the land will be given to SMEs in industrial projects on average for LE 280-300/square meter, “even though the average ranges between LE 600-700/square meter.
Now there are 13 industrial developers in Egypt.