As the government has recently held partnerships with some developers, such as Mountain View, Arabia Group For Real Estate Investment, and Palm Hills, many small- and medium-sized real estate companies are asking the government to participate in implementing a number of small projects by offering small plots of land to diversify investment opportunities and support those companies.
Recently, real estate developers sought a partnership with the government to overcome high land prices and construction costs as a method to increase companies’ land bank despite high land prices. Companies can allocate capital that is not invested in the purchase of land to facilitate business development.
Daily News Egypt polled some small- and medium-sized companies to learn their opinions on the possible partnership and their needs.
Managing director of Royal Gate, Mohamed Omar, said it is important that the government considers the interest of small and medium companies, to support them and hence achieve development and diversification in the sector through launching different projects for all segments of society.
Omar called on the government to partner these companies in the implementation of a number of residential, medical, and administrative projects by offering small plots of land not exceeding 30 feddans, which contributes to the development of small companies and solves the problems of lack of land and price hikes.
Omar noted that the smallest land size offered by the New Urban Communities Authority (NUCA) is 58 feddans, which is large plot for small companies to develop.
Concept Real Estate Group Chairperson Ehab Abou El Magd said that the government prefers to partner big developers and companies because it is easy to do business with them and to guarantee that they will pay their financial obligations as they have sufficient solvency to ensure the success of the partnership project.
Abou El Magd explained that the government prefers such developers instead of doing business with a large number of small companies on the same plot of land that may be provided to only one developer. However, small- and medium-sized companies are part of the market system and have the right to obtain opportunities that correspond to their size in different systems, whether offering lands or partnerships.
Abou El Magd suggested that the government, represented in Ministry of Housing or the NUCA, may allocate plots of land to be distributed to small companies according to their sizes, through a partnership system, and determine the authority that coordinates and follows up on their work.
He added that it should begin in the form of an experiment for a particular project on standard terms and to be spread in larger areas after its success.
Mohamed Beheiry, chairperson of Oscar Misr, said the government offers large plots of land at high prices, which small companies cannot afford due to lacking financial capabilities, and does not offer small plots of land that suit these companies.
Beheriy hoped the government will provide smaller plots at affordable prices to these companies to help them compete in the market, which will contribute to reducing prices of property in Egypt and promote the business of these companies, which is already relatively strong in the market.
He proposed an idea that small real estate companies could establish a consortium with each other and apply to purchase lands from the government or the NUCA.
City Line Properties Development has applied to acquire land from the NUCA in Sheikh Zayed of 58 feddans, through a partnership system with the government, represented by the Ministry of Housing and the NUCA for implementing a residential, commercial, and administrative project.
Mahmoud El Rouby, CEO of the company, said City Line has entered into agreements with other investors and small companies to finance the project in Sheikh Zayed and to be able to pay the land’s price.