Invest-Gate Concludes 21st Roundtable: “The Secret Formula for Successful Real Estate Investments”

Invest-Gate held its first roundtable in 2024، and the 21st in its series of events، on Wednesday، February 14، to discuss the best ways to unlock the vast investment potential of the Egyptian real estate sector. The roundtable delved deep into different real estate investment vehicles and financing strategies. It also addressed the supportive role of the Egyptian Exchange (EGX) in the real estate market.

The roundtable took place at the Nile Ritz-Carlton Hotel، under the title “The Secret Formula for Successful Real Estate Investments”، in collaboration with the Egyptian Businessmen’s Association (EBA) to tackle different types of real estate investment، including real estate funds، real estate investment trusts (REITs)، and the real estate exchange.

Discussions were moderated by Eng. Fathallah Fawzy، Vice Chairman of the Egyptian Businessmen’s Association (EBA) and Chairman of the Real Estate Development and Contracting Committee. The roundtable witnessed the presence of an elite group of senior officials، executives، and experts in the Egyptian real estate sector، including: Mr. Mohamed Selim، Head of Research Department at the Egyptian Exchange; Mr. Amr Elhamy، CEO of TSFE Tourism، Real Estate & Antiquities Subfund; Eng. Hisham Shoukry، Chairman of the Real Estate Export Council; Eng. Abdallah Sallam، President and CEO of Madinet Masr; Eng. Ahmed Ehab، CEO of Madaar Development; Dr. Hashem El Sayed، Executive Chairman and Co-Founder of ODIN Investments & Executive Chairman of Egyptians Real Estate Fund; Mr. Ahmed Abdallah، Vice Chairman of REDCON Properties; Mr. Ayman El Sawy، CEO of Rawasi Holding; Eng. Emad El-Nattar، Group CEO and Managing Director of Namaa PFM; Eng. Mohamed Adel، CEO of Roya Developments; Mr. Nader Khozam، Chairman and CEO of IL CAZAR Developments; Mr. Mohamed Elwy، CEO of Homeberry; Eng. Moaaz Wessam، CEO of W’s – Dubleuse; Dr. Raymond Ahdy، CEO of Wadi Degla Developments; Mr. Omar El-Tayebi، CEO of TLD – The Land Developers; Eng. Mohamed Eslam، Managing Director of EBNY Developments; Ms. Maha Abdel Razek، CEO of Misr Real Estate Assets Management; Mr. Ayman Abdel Hameed، Vice Chairman and Managing Director of Tameer for Mortgage Finance (Al Oula); and Dr. Nour El-Deen El-Serougy، CEO and Founding Partner of HRE Properties Egypt.

Financing strategies

During the event، experts shed light on financing strategies and financial metrics to help investors make rational investment decisions. They explored fractional real estate investment and the possibilities offered by crowdfunding in the real estate market.

Discussions at the event offered deep insight into the best methods for the calculation of the return on investment (ROI) and optimal strategies for assessing risks، given the challenges imposed by inflation and exchange rate fluctuations.

In this context، Eng. Fathallah Fawzy، Vice Chairman of the Egyptian Businessmen's Association (EBA) and Chairman of the Real Estate Development and Contracting Committee، emphasized the significant role of the real estate development industry in the Egyptian economy.

He highlighted that it serves as a key driver of development in the country. Fawzy also acknowledged that the recent increase in interest rates poses a major challenge for real estate financing and has become a burden for companies operating in the sector.

"Listing your company on The Egyptian Exchange offers several key advantages،" stated Mr. Mohamed Selim، Head of Research Department at The Egyptian Exchange.

Supporting the company's continuity

He added: "These include supporting the company's continuity، improving governance، facilitating access to finance with reasonable cost of funding compared to other alternatives، and availing liquidity for the company’s shares while achieving fair pricing through the interaction between supply and demand."

Mr. Amr Elhamy، CEO of TSFE Tourism، Real Estate & Antiquities Subfund، pointed out the importance of diversifying different real estate products، including the growing interest in hotels with dollar returns among investors.

He mentioned that integrating other real estate investment methods، such as Real Estate Investment Trusts (REITs)، is of great importance in terms of attracting foreign investors and facilitating exit paths.

"The global real estate development industry relies heavily on real estate funds،" said Eng. Hisham Shoukry، Chairman of the Real Estate Export Council. "50% of real estate exports are executed by real estate funds،" he noted، highlighting the absence of such funds in Egypt due to currency instability.

"We need to be prepared until this temporary issue is resolved،” Shoukry commented.

Eng. Abdallah Sallam، President and CEO of Madinet Masr، said that the current economic changes have provided three positive opportunities، including going out to invest in foreign markets، especially the Saudi and Gulf markets، accelerating bonds and real estate delivery، as well as more thorough planning for the industry by addressing the idea of managing real estate funds.

The importance of real estate funds

Eng. Ahmed Ehab، CEO of Madaar Development، emphasized the importance of both real estate funds and REITs as well as the stock market، and the necessity of regulating them collectively. He also highlighted the significance of REITs as a logical and visible investment tool for Egyptians to hedge against inflation. He further stressed that this type of investment should be incentivized with some form of tax exemption to attract investors amid surging interest rates.

Dr. Hashem El Sayed، Executive Chairman and Co-Founder of ODIN Investments and Executive Chairman of Egyptians Real Estate Fund، emphasized the unique advantage of real estate funds being exempt from income taxes in Egypt. He urged real estate developers to actively participate in real estate funds، highlighting the absence of any conditions for opening such funds.

He also underscored the importance of prioritizing media، culture، and the promotion of real estate funds، in light of Egypt's remarkable real estate experience as a source of inspiration.

"Hotel apartments in Egypt yield high profits، usually in US dollars، while commercial units yield profits in Egyptian pounds. Hence، there is a need to expand in hotel apartments،" stated Mr. Ahmed Abdallah، Vice Chairman of REDCON Properties.

Mr. Ayman El Sawy، CEO of Rawasi Holding، stated that currently there is insufficient knowledge in the market regarding investment products، pointing out that the average Egyptian citizen tends to be more of a saver than an investor. Hence، he emphasized the necessity of educating citizens about investment products and the importance of investing.

Eng. Mohamed Adel، CEO of Roya Developments، highlighted the immense and impactful nature of the real estate sector، stressing the necessity for mechanisms and a set framework to regulate it.

The state's support for real estate financing

Adel also underscored the importance of the state's support for real estate financing to build a robust and competitive real estate sector، capable of attracting foreign capital.

Eng. Emad El-Nattar، Group CEO and Managing Director of Namaa PFM، emphasized the significance of having property management companies in Egypt to attract foreign investments in the near future.

He highlighted two types of management: the first focuses on post-sale property management، while the second concentrates on overseeing financing procedures and aligning client requirements with the capabilities of real estate developers.

Mr. Nader Khozam، Chairman and CEO of IL CAZAR Developments، stated that exporting real estate has become challenging and there will be no influx of foreign investments unless there is a unified exchange rate.

Khozam also pointed out that real estate is a safe haven globally، with property values increasing by no less than 30% worldwide، including countries like Greece، which lacks significant real estate investment.

Mr. Mohamed Elwy، CEO of Homeberry، highlighted the common perception of real estate as a safe haven، but clarified that it only holds true within a stable economy، rather than as a general rule. He emphasized that it is important for developers to carefully assess the current situation and avoid basing their future plans solely on the achievements of 2022 and 2023، as these periods witnessed price surges and instability in the Egyptian currency.

Elwy noted the absence of developments in the laws and regulations governing the real estate market، underscoring the need for a thorough examination of these aspects to assess returns for investors from abroad and attract foreign currency.

Eng. Moaaz Wessam، CEO of W’s – Dubleuse، highlighted Egypt's accumulated experience in marketing and management within the real estate sector.

Also، Wessam emphasized the necessity of diligently regulating the real estate market. He said that land sales should be regulated in a specific manner to ensure a fair sales approach that will benefit all parties.

Eng. Mohamed Eslam، Managing Director of EBNY Developments، stated that the challenges that Egypt currently faces go beyond the real estate sector to encompass political and economic factors. In light of this، he emphasized the need for collaboration and solidarity between the private sector and the government.

Listing various companies

Eslam highlighted the significance of exploring the idea of listing various companies on the stock exchange، along with implementing risk management practices within each organization. He further emphasized the importance of directing attention towards tourism and hotel real estate products as a means to export Egyptian real estate and generate a source of income in US dollars.

Dr. Raymond Ahdy، CEO of Wadi Degla Developments، emphasized the importance of property identification/codification at official real estate registries.

Ahdy further noted that implementing sustainability and transitioning to green practices is essential for energy efficiency and meeting market demands.

He also highlighted that real estate developers perform several crucial roles alongside their primary role، serving as the financier، producer، and designer، all of which impact the product's final price.

Mr. Omar El-Tayebi، CEO of TLD - The Land Developers، asserted that the market's primary challenge is uncertainty surrounding the Egyptian economy. Regarding the secondary market، he highlighted the issue of the business model that needs to be addressed. He also pointed out that any disruption in the real estate market could have a ripple effect on the wider Egyptian market.

Mr. Ayman Abdel Hameed، Vice Chairman and Managing Director of Tameer for Mortgage Finance (Al Oula)، highlighted the significant challenges faced by real estate developers، as they struggle to balance the roles of being financiers and collectors as well. He emphasized that real estate financing encounters multiple obstacles، with high interest rates and financing costs being the most prominent among them.

Abdel Hameed emphasized the necessity of presenting properties to foreign investors in an appealing manner and providing them with suitable guarantees. He stressed the importance of establishing a dedicated record for foreign ownership.

Offering USD100 million in capital

Dr. Nour El-Deen El-Serougy، CEO and Founding Partner of HRE Properties Egypt، stated that a bank in the Netherlands offers $100 million in capital to any developer in Egypt who meets certain conditions or establishes factories in Egypt.

El-Serougy pointed out the importance of not only focusing on selling Egyptian properties to Gulf buyers but also targeting Egyptians in Europe and the United States، while providing them with data about the real estate market in Egypt.

Ms. Maha Abdel Razek، CEO of Misr Real Estate Assets Management، highlighted the shifting global trend in real estate demand. She noted that the demand for real estate units has started to decline in comparison to the increasing demand for hotel units، particularly in the downtown area.

In terms of green investment، she pointed out that certain companies have embraced construction investments with a focus on sustainability. This approach has resulted in higher rental returns، as it has become a requirement for some international companies.

The sponsors of the roundtable were Madinet Masr، Madaar Development، Namaa PFM، Roya Developments، IL CAZAR Developments، Beltone Mortgage Finance، W’s - Dubleuse، Wadi Degla Developments، TLD – The Land Developers، EBNY Developments، and Misr Real Estate Assets Management. Media partners included Aleqaria، Al-Borsa newspaper، Daily News Egypt، Al-Gedaan Real Estate، Elly Bana Misr program، Aqarmap، Osoul Misr magazine، Bloom portal، Property Plus، Al-Bawaba Al-Aqaria website، Aqar Masr program، and Safqa.