Infrastructure and political stability goad local and foreign capital into investing in Egypt
During the past few years, the Egyptian government was bent on putting in place the appropriate mechanisms and creating an environment that prods investments to come to Egypt and persuade Egypt-based companies to expand or try to bring in foreign investments. These efforts have largely fared well, as we saw a significant rise in investments coming to the country just recently.
Most private developers are of the opinion that the investment environment in Egypt is in a quite different position as compared with that of the period preceding the past seven years, as there exist plenty of lands, robust infrastructure, not to mention the procedures and policies that are attractive enough for investments. But ever more investments may come to the country and foreign capitals may feel more comfortable and ready to expand and invest, should some requests and key measures be met and put in place.
Myriad appealing factors
Hisham Shoukry: The government took supportive measures and we need incentives to allure the funds
Chairman of the Export Real Estate Council in Egypt Eng. Hisham Shoukry said that the Egyptian government has passed a series of investment- friendly measures, such as amending codes, the issuance of investment incentives, making some progress and scoring significant success in advancing the key issue of property export with the issuance of law granting residence visa in return for purchasing real estate, together with granting the Egyptian nationality.
The Egyptian government has become more ready to resolve any problems or challenges facing companies or investors and put forward prompt solutions for any hurdles, a fact that led to the creation of a more investment- friendly environment, he noted.
Just recently, the country saw the launch of mega projects in infrastructure, utilities and electricity with the installation of many power plants and the creation of mechanisms enhancing the generation of energy from renewables and non-conventional sources, a move that put an end to power shortages and induced Egypt to become one of energy exporting nations, he explained.
Egypt’s participation in MIPIM2022 is crucial for shedding light on its investment opportunities, mega projects and real development drive, he elaborated, highlighting a booklet that was issued to include all investment-related procedures, together with available opportunities, number of companies and statistics, so as to provide foreign investors with all necessary information about investment environment and opportunities in Egypt.
He alluded to the importance of preparing a teamwork to mull over mechanisms necessary for incentivizing foreign funds to invest in Egypt and to go as far as amending the by-laws.
He added that alluring the mutual funds and investments hinges on having robust infrastructure and attractive opportunities, both have become a reality now in Egypt.
Mohamed Edris: The developmental projects have revived Upper Egypt cities and there exists a rare opportunity to score record profits across the governorates.
According to chief executive of Mabany Idris Eng. Mohamed Edris, infrastructure and road projects that have been executed by the state have revived all regions of the country, including Upper Egypt, and increased the investment opportunities. “With it in dire need for projects in areas as diverse as residential compounds, shopping malls, clubs and recreational projects, Upper Egypt features real opportunities and rising demand on the part of customers,” he said.
Most Upper Egypt inhabitants, constituting the majority of Egyptian expatriates and a wide swathe of high-income earners, are after high-end residences and projects on a par with those carried out in Cairo and Alexandria.
Therefore, the success of any investments that are injected into these projects in Upper Egypt is assured, he maintained.
Mabani Edris decided to start investing in Upper Egypt and was the first developer that carried out an integrated housing compound in New Assiut in the heart of Upper Egypt. It scored an astounding success and achieved rising sales in a record time, prompting the company to eye expansion in Upper Egypt, he noted.
Stability
Walid Mokhtar: returns on investment reach 25% and any incorporation takes 3 days
For his part, Chief Executive Officer at Iwan Group said that Egypt features several environment-friendly characteristics, on top of which is the political stability, which is a vigorous relative advantage at this time around, as the Middle East and the West are teeming with unrest and instability.
Economic growth is one attractive factor, with Egypt posting remarkable growth rates. Also, the real estate market sees a growing and increasing demand for housing units, he maintained.
“Because of demand beating supply, Egyptian real estate features higher returns on investments of 20 to 25%,” he said.
The investor can put in place long-term plans owing to steady growth of demand on the back of the country’s over-population, he elaborated.
The state provides full support and incentives for investors with the incorporation procedures lasting less than 3 days and the acquisition of a plot of land and starting any project accomplished at short notice.
“The investor can go to the New Urban Communities Authority Headquarters and submit a bid to purchase a plot of land which can easily be allocated in case all requirements are met.”
The market is rife with remarkable opportunities, as there is a real need for educational, medical and service projects, he explained.
Success of projects in Egypt hinges on the delivery of high quality products to the Egyptian customer who searches for the best products, a fact that sparks fierce competition among developers, he noted.
Sherif Mostafa: We need more measures to eradicate red-tape, as the market will be more regulated soon
On his part, managing director at IGI Real Estate Eng. Sherif Mustafa said that Egypt teems with promising sites, including the coastal areas of Al Galala, New Alamein, East and West Cairo, the governorates, as all projects aim at creating sustainable living.
Several hurdles often led foreign capital to halt expansions in Egypt, including how easy inflows and outflows of capitals and profits are moving upon the termination of the project, an obstacle that has been overcome during the past few years with inflows of investments becoming more flexible, he explained.
The state is taking several measures to support serious investments, as a draft law for regulating the real estate market, requiring developers to follow pre-set guidelines and applying an escrow account system, will critically serve the purpose of keeping rights of clients intact and filtering out non-serious-minded investors, he noted.
The market is in dire need for more measures to uproot red-tape with efforts exerted recently faring considerably well. Also, clear-cut steps and regulations must be put in place for investments to help developers work at ease, he added.
Marketing
Mahmoud Abd Al-Halim:Hiring marketing experts secures the implementation of projects that meet the needs and fulfill distinctiveness criteria, as full compliance is key for success
Chairman of MREC Mahmoud Abd El Haleem said that the foreign investor has to study the Egyptian market fairly well before taking the decision to invest, as the market is of a peculiar nature and every housing, commercial and medical product requires some special conditions and prerequisites.
He highlighted the need to tap marketing consultants to lay down selling plans conducive to achieving feasibility targets while fulfilling the market conditions, customers’ needs and income levels. “ We advise investors not to inflate margins in light of the market fierce competition,” he said.
The criteria for scoring adequate sales is distinctiveness and the provision of innovative unique products, as major players in the real estate market have a quite solid base of clients.
New developers need to stick to delivery schedules and the pre-set specifications as much as they can, if they want to secure for themselves a rather unshaky place in the market, ensure their loyalty and leave behind a good impression, he affirmed.
