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DAWN OF A NEW EGYPT

With political stability slowly but steadily gaining foothold and economic recovery underway, Egypt is back on the global investment map.

September 2015

Over the past four years, as political uncertainty prevailed and the economy suffered, it was not easy for Egypt to prove to the international community that in fact it is a promising country for business and investors.

Today, things fortunately look different. In its recently released Middle East & North Africa (MENA) real estate investor sentiment survey, global property consultancy JLL states that Egypt has returned onto investors’ radars.

According to JLL, a more stable political environment and the return to more robust levels of economic growth are responsible for the rise in investor interest in Egypt.

President El-Sisi, who was sworn into office in June last year, has implemented several economic reforms which resulted in credit rating agency Moody’s upgrading of Egypt’s economic outlook from negative to stable.

On a further positive economic note, in March this year, the first ever Egypt Economic Development Conference was held, which resulted in approximately USD 125 billion of investments in Egypt. The conference is a key milestone of the government’s medium term economic development plan and aims to “reposition Egypt on the global investment map.” The most significant announcement of the EECD was the Capital Cairo mega project, a proposal of an Emirati investor to develop a new administrative capital to the East of Cairo, valued at USD 45 billion.

In addition to the above mentioned factors, JLL says that development initiatives such as the Suez Canal Development Programme are expected to generate further domestic and international investment, boosting all sectors of the economy, including the real estate market.

More than this, the new Suez Canal also carries a wider symbolic meaning for many Egyptians in the sense that it proves that Egypt is moving ahead and has successfully overcome the years of turmoil and insecurity following the revolution. The Chairman of the Suez Canal Authority has himself called the project a “symbol of the new Egypt.”

A positive for property

With positive economic signs, positive sentiment has also retuned to Egypt’s real estate market which has begun to strengthen since the last quarter of 2014. According to JLL, all sectors of the Cairo real estate market continued to exhibit positive performance and improved sentiment during the second quarter of 2015. The investments which came out of the Egypt Economic Development Conference “have contributed to positive economic sentiment, with the IMF upgrading their forecasts for real GDP growth for 2015 and 2016 to 4% and 4.4% respectively,” JLL says.

Rental rates in Cairo’s popular residential areas have risen by 10 percent during the second quarter of this year when compared to the first three months of the year, says JLL. Prices in New Cairo, a satellite city which lies to the East of the capital, are expected to rise further on the back of major announcements such as New Capital Cairo, Future City etc. which significantly contribute to the development of East Cairo.

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