EGYPTIAN REAL ESTATE IS RIPE FOR INVESTMENTS
Cityscape spoke to H.E. Dr. Mostafa Madbouly, Egyptian Minister of Housing and Urban Development, about the New Administrative Capital Project and why the real estate market is so important to Egypt’s economy.
What is the importance of the real estate sector to the Egyptian economy in general?
“The real estate sector in Egypt is one of the fastest growing sectors in which the growth rate reached 11.6% during the first nine months of the fiscal year 2014-2015. The sector’s contribution to GDP amounted to approximately 4.7% in the fiscal year 2013-2014 and 4.1% during the first nine months of the fiscal year 2014-2015. The local market includes 31,000 public contracting companies and 36,000 private ones.
“The real estate sector attracts significant investments in Egypt and accounted for 13.7% of the total investments between July 2014 and March 2015. It can accommodate a great number of labourers representing 11.42% of the total workforce in Egypt.”
Do you think that the real estate sector is qualified to accommodate more investments?
“The local real estate market is huge to the extent that it can accommodate more than the current investments, particularly with its growing demand and the continuous population growth. The market is qualified to create thousands of job opportunities for more manpower at all levels, in implementation of the socio-economic reform programme aiming to achieve overall development through attracting investments in the infrastructure, roads, energy and other sectors related to urban development.”
What are the most important developments of the New Administrative Capital Project and what is the project’s timeline?
“We seek to build the New Administrative Capital at the highest levels to be a smart, green and sustainable city with a good transportation system, depending on a number of highways and regional roads connecting the New Administrative Capital in Cairo with other cities. The New Administrative Capital will be located at a distance of 40km from the Nile River and 60km from the Suez Canal.
“Construction of the project’s basic infrastructure has already started and the designs of all ministerial buildings have been completed. The first phase of investment projects will be offered to the private sector – both inside and outside Egypt. We have received, and continue to receive, many proposals for the project from various companies.”
What is your plan for the project?
“The implementation of the New Administrative Capital Project has been divided into 3 phases, each to be implemented separately. The first phase will be implemented over an area of approximately 10,500 acres, including the ministerial buildings, cabinet, large conference hall, a fairground, and a great number of residential units for different categories; of which 15.000 units are about to begin at this phase, while the remaining parts of the project will be undertaken by the private sector. The first phase also includes also a diplomatic district for embassies and houses so as to encourage embassies to move there, some other financial and business districts, in addition to the construction of the largest park in the world.”
Providing houses for low-income people is an important goal of the government. What are the latest developments of the One Million Housing Units Project and what are the objectives of the project over the next five years?
“One of the Ministry’s current priorities is to implement the One Million Housing Units Project for low income people and ‘Social Housing’ for the city’s youth. The Ministry is working on engaging the private sector in this, as per specific frameworks and rules to implement housing units which serve low and middle income population categories.
“About 100,000 units have already been constructed and another 150,000 units are due to be completed this year. It is a huge project with investments totalling approximately EGP 150 billion.”
What is your message to foreign investors as to why they should enter the Egyptian real estate market?
“I would like to point out that the position of Egypt on the world map enables it to be a global economic centre, particularly after the completion of the new Suez Canal Project and the beginning of the Suez Canal Corridor Area Project, providing great opportunities to the real estate sector to develop new regions. There is a great annual increase in the demand for real estate in Egypt due to its population growth.
“The government, represented by the Ministry of Housing, Utilities and Urban Communities, is taking many legislative measures and actions to facilitate business activities of investors. We shall facilitate procedures for the required licenses and permits in order to begin this activity as well as develop a number of procedures to increase the contribution of real estate financing in this industry. We have also solved many problems relating to investors during the recent period.”
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