The Ministry of Housing laid down several aspects of its work in the coming years, including continuing construction at the New Administrative Capital and expanding its offering of lands for real estate companies and individuals in Egypt and Egyptians living abroad.
In an interview with Daily News Egypt, Minister of Housing, Mostafa Madbouly, said that the ministry relies on land offerings to stimulate the real estate sector and provide jobs at real estate companies, so as to counter the recent economic challenges, such as the rising cost of projects after flotation.
What are the main aspects of the ministry’s work in the coming period?
The ministry began a series of lands offerings this year, including lands for residential and investment uses, along with the ministry’s own residential projects. The New Urban Communities Authority (NUCA) aims to provide ready-made lands with facilities in large and medium areas for real estate companies, as well as small land plots for individuals.
Are there statistics on the size of NUCA’s offerings?
NUCA’s offerings in 2016 surpassed its previous offerings. In 2016 alone, we offered 80,000 land plots to individuals across several housing categories.
What is NUCA’s plan in 2017?
The plan is to offer 31,300 land plots to individuals across different housing categories. The offerings will be announced in the coming period after finishing pricing and preparing the specifications brochures.
In April, we will offer residential land plots to Egyptian expats. The prices for the land will be paid in US dollars through wire transfers to secure inflow of hard cash and foreign currency.
What are the details of the offering?
The new offering includes 6,429 land plots at the Beit Al-Watan project. These lands are in nine cities. The offering will also include 3,312 units as part of the NUCA’s kind share in Madinaty and El Rehab projects in New Cairo, along with 7,054 units in Dar Misr for Egyptians abroad.
The Ministry of Housing has earlier offered 2,568 units to Egyptians abroad. The price of these units was $800 per square metre in El Rehab and $575 per square metre in Madinaty. We only requested 40% advance payment and the remaining part of the payment extends over seven years in instalments.
Moreover, NUCA received 10,680 units from Talaat Moustafa Group as part of the settlement agreement. The number of units will increase even further after adding 1.1 million square metres to the NUCA’s share.
What are the details of offering lands to Egyptians abroad?
NUCA will offer 25 services land plots in the Beit Al-Watan projects in four cities and five integrated urban land plots in three cities to Egyptians abroad. Awarding the plots will rely on early booking and stipulating the establishment of companies to develop the projects first.
Furthermore, we are also preparing to offer units in the low-income social housing project for Egyptians abroad with different payment methods.
The ministry will offer 14,900 units in the third phase of Dar Misr’s middle-income housing projects in seven cities and 3,000 units in Madinaty.
In 2016, the ministry sold EGP 22.2bn worth of investments, services, and residential units and lands to both real estate companies and individuals.
How are the ministry’s projects contributing to the real estate development plan?
The ministry is contributing to the state’s plan to boost the business size of the construction sector to about EGP 1tn over the coming five years. The ministry also offers lands to real estate companies and individuals, which eases the burden of construction on the ministry, while at the same time it increases the activity of real estate companies.
What are the details of the NUCA’s investment plan?
NUCA’s investment plan in 2017 is the biggest in its history, reaching as much as EGP 37bn, which is EGP 15bn more than the 2016 plan. The ministry aims to increase NUCA’s investments to reach EGP 50bn in the coming fiscal year. Most of these investments will be channelled to developing new cities and expanding in different investment activities.
Furthermore, NUCA’s investments increased from EGP 4.8bn in 2012/2013, to EGP 7.7bn in 2013/2014, and to EGP 12bn in 2014/2015 before hiking to EGP 22bn in 2015/2016.
How does this impact the real estate sector?
Increasing NUCA’s investments reflects the growth in the number of projects and provides lands ready with facilities and residential units that fit all segments of society. The government aims to attract foreign investments to the Egyptian market through partnership projects between NUCA and real estate developers. The second phase of these projects will be posed in the coming period.
What are the details of the second phase of the partnership projects?
NUCA is preparing to offer 15 land plots in New Cairo, Sheikh Zayed, 6th of October City, New Damietta, and New Aswan with a total area of 4,524 feddans. Plots range in size between 19 and 2,000 feddans.
The permits for these lands include residential, commercial, administrative, entertainment, and tourism activities. NUCA urged Egyptian investors to cooperate with Arab, especially Gulf, companies to compete on partnership projects. We also prefer giving lands to the companies that pay part of the price in US dollars.
NUCA signed four partnership project contracts with Egyptian and Arab companies for total areas of 2,000 feddans, with investments reaching EGP 131bn. Constructions are ongoing in one project, while the other three are pending ministerial approval.
What are the developments in the new cities’ plan?
The ministry will provide several spaces to the work of real estate companies in the cities that are under development, including the New Alamein City. We are preparing to offer the first phase of investment lands. Companies will receive opportunities in other cities. We are currently developing New Aswan and New Damietta to expand tourism activities. We are also initiating construction in Nasr City and West Qena in Upper Egypt.
The new land offerings will provide lands for the real estate development sector to face the growing size of real estate projects in the current and coming fiscal year.
Does the ministry have a plan to solve the problems investors face?
The Ministry of Housing is working to solve the problems that investors face in the real estate sector. We took several decisions to solve the investors’ problems and to ease the procedures for real estate companies. This was done through a cooperation protocol between NUCA and the Real Estate Development Chamber, affiliated to the Federation of Egyptian Industries (FEI).
This protocol includes the formation of a joint committee to solve the problems of investors and developers. The committee will also work on speeding up the process of granting permits.
Additionally, the State Council is reviewing the final draft of the new NUCA real estate bylaws, which would include the procedures for reoffering lands and contracting with real estate developers to ensure the state’s rights and deal with serious investors only.
What are the developments at the New Administrative Capital project?
The New Administrative Capital is one of the ministry’s most important investments in the coming period—in terms of size, business volume, and number of companies working on site.
The ministry is preparing to put up 17,000 units as part of the first offerings in the residential sector of the capital. The establishment of these units will be completed in December. The total number of units will reach 26,000 by mid-2018.
What is the main objective of the project?
The New Administrative Capital is a development project that aims to create an integrated business environment equipped with a high-quality infrastructure. It also aims to attract capital and global companies to reduce congestion in Cairo, resulting from the number of employees at ministries and government agencies. After that, Cairo will become a capital of heritage, culture, history, and tourism.
A number of Egyptian construction companies began to implement the government district, which will include both the parliament and cabinet buildings.
The first precedence is of 12,000 feddans with investments valued at EGP 60bn. The total area of the capital is 170,000 feddans. The company was established with EGP 6bn of paid-up capital from the armed forces and NUCA to run the project.
Construction companies are implementing 26,000 units in the residential district on 1,000 feddans. The cabinet has awarded four contractors agreements worth EGP 4bn to provide utilities to 40,000 units in the first phase.
Does the project affect the overall development plan drawn up by the government?
The size of the new capital is twice the size of New Cairo. It will provide enough land for investments over the coming 50 years. The capital is necessary for the coming period and has been postponed long enough.
The New Administrative Capital is a major national project, despite all the opposing views. Only 6.5% of Egypt is inhabited. The ratio is slowly going up. But to achieve the vision of Egypt 2052, we have to double the populated area to 12%.