Knight Frank: 94% of wealthy GCC investors targeting Egypt for real estate investments

94% of wealthy GCC investors with over US$ 1 million in investable assets are keen to purchase property in Egypt، with 56% planning to do so within the year، according to global property consultant، Knight Frank’s inaugural Destination Egypt report.

In recent years، Egypt has increasingly become a focal point for investments from the Gulf Cooperation Council (GCC) countries. In 2022 alone، significant investments were funneled into the country، including a US$ 10bn port investment from the United Arab Emirates (UAE)، a US$ 300 million investment from Egypt Kuwait Holding، and a US$ 15bn investment from Saudi Arabia's Public Investment Fund (PIF).

Robust financial engagements

The trend has continued into 2023 with the UAE’s Sky Real Estate investing US$ 1 billion. Additionally، Kuwait’s Egypt Kuwait Holding has further deepened its commitment with a US$170 million investment this year. These robust financial engagements underscore Egypt's growing appeal as a go-to investment destination for GCC institutional investors، who have committed US$ 118 billion in real estate and infrastructure investments between 2021 and 2023.

To understand how this sovereign and institutional interest in Egypt is translating across to individual investors، Knight Frank has partnered with YouGov to survey 258 GCC investors to understand their appetite، attitude and sentiment towards investing in Egypt. The respondents have varying net worth levels ranging from US$ 100،000 to above US$ 1 million.

Knight Frank points to the fact that 16% of Egypt’s GDP is driven by real estate and construction activities، making the sector particularly important behind oil and gas (24% of GDP) and tourism and hospitality (12% of GDP) as the country begins to emerge from a period of economic challenges.

Faisal Durrani، Partner – Head of Research، MENA، explained: “The residential sector، perhaps unsurprisingly، is a standout favourite for GCC investors، with 68% keen on purchasing a home in Egypt. For many، this is a tried and tested market، with 60% of GCC investors already in possession of at least one home in Egypt”.

Making second home

“It is fascinating to see GCC investors being influenced by the behavior of their governments، with 72% focussed on making a second home، or holiday home purchase in Egypt، 49% of whom are expected to transact within the next 12-months".

In terms of overall target locations، Greater Cairo، which includes New Cairo، Central Cairo، Sheikh Zayed City and the New Administrative Capital، has been named as the number one area of focus for GCC investors at 73%، but The North Coast is a focal point for Saudis (41%) and Qataris (41%).

Durrani added: “When it comes to the most popular locations for holiday homes، The North Coast is a standout favourite for Saudis (41%)، Qataris (41%) and Emiratis (37%)، while for Omanis (27%) and Bahrainis (27%)، Sharm El Sheikh tops wish lists. And Emiratis have the deepest pockets، with the average planned spend standing at US$ 1.6 million; however، the supply of luxury homes priced between US$ 1-3 million is scarce، representing around 5% of total stock according to our estimates”.

Nuanced differences in purchasing rationale

Knight Frank also points to nuanced differences in purchasing rationale، with Emirati’s most keen on purchasing for investment reasons (43%)، while the bulk of Qatari’s (55%) are looking for a holiday home. Omanis on the other hand are focussed on securing buy-to-let properties (47%).

Zeinab Adel، Partner – Head of Egypt، said: “The second homes market in Egypt is attractive for GCC investors، particularly as it remains largely undersupplied. Branded residences as well، for instance، offer investors access to a certain lifestyle، with the added benefit of being associated with a luxury brand and of course world class property management. With 35% of GCC investors keen to rent out their purchases when not being used for personal reasons، this underscores the importance of the sector.

“Furthermore، with starting prices of around US$ 300،000، Egypt’s branded residential market represents excellent value، when compared to other major global gateway locations”.

The research also takes a closer look at yield expectations among investors. The data shows significant variations in expectations based on nationality. Most Omanis (40%) believe rental yields of 2-4% are achievable، while the majority of Qataris (27%) and Bahrainis (37%) expect rental yields of 6-8%. Overall، 49% believe rental yields will range from 4-8% on their buy-to-let acquisitions.

Up to 487 offices

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London، the Knight Frank network has 487 offices across 53 territories and more than 20،000 people The Group advises clients ranging from individual owners and buyers to major developers، investors، and corporate tenants. For further information about the Firm، please visit www.knightfrank.com.

In the MENA region، we have strategically positioned offices in key countries such as the United Arab Emirates، Saudi Arabia، Bahrain، Qatar، and Egypt. For the past 13 years، we have been offering integrated residential and commercial real estate services، including transactional support، consultancy، and management.

Understanding the unique intricacies of local markets is at the core of what we do، we blend this understanding with our global resources to provide you with tailored solutions that meet your specific needs. At Knight Frank، excellence، innovation، and a genuine focus on our clients drive everything we do. We are not just consultants; we are trusted partners in property ready to support you on your real estate journey، no matter the scale of your endeavour.