Egypt emerges as top spot for real estate investing in Middle East and North Africa
Egypt is now one of the top destinations for investing in real estate in the Middle East and North Africa region, just behind Saudi Arabia, it is claimed.
It ranks number two behind Saudi in terms of investor confidence, according to a survey of investors in the region, revealed Blair Hagkull, MENA chairman of Jones Lang LaSalle.
Khaled Sekry, chief operating officer for Palm Hills Developments, agreed that the regional real estate hub is moving away from Dubai to Egypt and will continue to do so for the next three years.
The country’s performance in the sector is a reflection of a surge in activity with Middle Eastern investors doubling their investments in the first half of 2010 over the previous year, making them, once again, the second largest inter-regional buyers.
Ayman Ismail, chairman of the Dal Al Mimar Group described Egypt’s real estate sector as having ‘robust’ fundamentals and said that rural migration toward bigger cities, most notably, Cairo, has also been a driving force.
In addition, there are 600,000 marriages per year in Egypt, which, in theory, translates into the same number of couples looking to make a housing purchase, according to Ismail.
A further incentive for many investors to look at Egypt is the affordability of residential space. Ismail argued that Jordan offers double Egypt’s price and Dubai offers four to five times as much.
Sekry added that international investors’ ignorance of the opportunities to be seized upon in Egypt is a major hindrance toward developing the full potential of the sector.
Hesham Shoukri, chief executive officer and executive president of Rooya Group, said that investors were focusing on Eastern Europe where yields are between 5 and 6% while they are as high as 12 to 15% in Egypt.
The industry believes that real estate research firms, including Jones Lang LaSalle, do not provide sufficient coverage of the Egyptian market but that is now changing.
Ismail believes that four key areas need to be addressed for the local real estate sector to maximize its gains; trust amongst local and international buyers which had been tarnished due to instants of not respecting contract terms; encouraging foreign investors that are willing to invest in infrastructure; providing that is affordable; and providing more consistent data.
The Egyptian government is moving towards putting in place a transparent real estate registration system