ANALYSIS OF EGYPT’S CONSTRUCTION PROJECTS MARKET Egypt in 2018 was the second biggest projects market in the MENA region. In total, more than $20bn of real estate and civil infrastructure projects worth $50m or above have been awarded in over the past two MARKET years alone. Everywhere across Cairo, huge billboards advertise dozens of new real estate developments demonstrating vividly the SIZE scale of the opportunity. Value of contracts awarded in Egypt all sectors, 2015-18 ($m)
30,000
20,000
10,000
0 2015 2016 2017 2018
Source: MEED Projects 2018 SELECTEDEGYPT CONTRACT AWARDS
PROJECT VALUE ($M) The key and perhaps best-known active ACCUD - The Capital Cairo: Central Business construction project in Egypt is the new District 2,8003,000 Administrative Capital to the east of Cairo. ACCUD- TheCapitalCairo:CentralBusinessDistrictPha se2 1,350 Involving the creation of totally new from the NUCA - The New Mansoura City ground-up city, the multi-billion-dollar project NAT - Cairo Metro Network: Line 3 - Phase 3: El- 1,244 will host the government when it is complete Thawra Line Civil Work 1,240 as well as tens of thousands of new NAT - Light Rail Transit : LRT Line (66 kms) residents. Work on the massive project is NAT - Cairo Metro Network: Line 4: Phase 1: well under way, with hundreds of individual 950 Civil Package 1 (CP401) contracts already awarded. Hassan Allam Properties- ElMostakbal City HAPTown Residential Complex 800 Other significant active real estate and civil MHUUD - Rod El Farag Highway 790 infrastructure contracts include the huge Madaar Development - Azha Ain El-Sokhna (Phase I) 750745 new New Alamein City on the North Coast, Almarasem Development - Fifth Square 600 the new Egyptian Grand Museum, a host of new hotel and tourism developments, and SCZONE - Al Sokhna Port Second Basin Developme nt 535 NAT - Cairo Metro Network : Line 3 - Phase 4: Pack age 4B the expansion of the existing Cairo metro NAT - Cairo Metro Network: Line 3 - Phase 3: network. Electromechanical Works 500530 Palm Hills / Madinet Nasr : Capital Garden 450 MAF - Almaza City Centre 400 Egypt National Cancer Institute - National Cancer Institute
Source: MEED Projects 3 TOP CONTRACTORS
Both local and international firms have been able to take advantage of the opportunity which again demonstrates the openness of the local market. Chinese contractors which have been able to bring financing have in particular been successful in the market.
Egypt selected top construction and infrastructure contractors by value of work under execution ($m) 0 1,000 2,000 3,000 4,000 5,000 6,000 CHINA STATE CONSTRUCTION & ENGINEERING CORPORATION
ORASCOM CONSTRUCTION
HASSAN ALLAM CONSTRUCTION
THE ARAB CONTRACTORS
PETROJET
CONCORD FOR ENGINEERING & CONTRACTING SIAC CONSTRUCTION
UI NASR HOUSING & DEVELOPMENT
4 KEY DRIVERS
With the Arab world’s largest population of around 100 EGYPT ECONOMIC INDICATORS, 2018 million people, Egypt already has a considerable latent demand for housing and social infrastructure. Nominal GDP ($bn), 2017 299 But add in population growth of more than 1 million Real GDP growth, 2017e (%) 4.2 each year, a population density rate of 46,000 per square kilometre in Cairo, and the fact that more than Real GDP growth, 2018f (%) 5.2 50% of the population is below the age of 25, there Non-oil real GDP growth, 2018f (%) 4.2 have the perfect ingredients for a sustainable construction boom for years, if not decades, to come. Oil real GDP growth, 2018f (%) 22.8 The market has been considered by strong economic Crude oil production (million b/d) 0.6 growth of more than 5% in 2018, and a construction- Natural gas production (billion cf/d) 5.1 focused government which is prioritising delivery of projects and industrialisation strategy. Egypt’s rapid Fiscal breakeven oil price ($/barrel) 55.0 repositioning from a net gas importer four years ago to net exporter today thanks to the fast-tracked Fiscal balance (% of GDP) -10.0 development of the offshore Zohr gas field has helped Government debt (% of GDP) 91.2 underpin this economic recovery and support the state’s projects drive. Current account balance (% of GDP) -4.4 Official reserves ($bn) 35.5 CPI inflation (%) 10.4 Unemployment rate (% of labour force) 11.1
Source: MEED Projects 5 FUTURE PIPELINE
Egypt has well over $300bn of known planned and un-awarded projects which gives it a project pipeline larger than any other regional market bar Saudi Arabia and the UAE. Construction is by far the largest future market in the country with more than $120bn worth of planned projects and growing.
Value of Egypt planned and un-awarded contracts by sector ($m)
120,000 100,000 80,000 60,000 40,000 20,000 0 Chemical Construction Gas Oil Transport
Source: MEED Projects 6 MARKET SIZE
Narrowing down, the value of planned and un-awarded construction projects in Egypt is $186bn. To put it into context, this makes it the third largest future market in the MENA region behind Saudi Arabia and the UAE. Given the high population growth rate in the country, the market is going to continue to grow and at one point may well overtake itsneighbours Egypt is in fact the only country in MENA where overall spending on projects has grown in the past two years, and it has overtaken Saudi Arabia has the second largest single projects market in the region has a whole, recording in 2018 more than $33bn of contract awards. Value of planned and un-awarded construction projects in Egypt and other selected MENA markets($m)
250,000
200,000
150,000
100,000
50,000
Source: MEED Projects FUTURE SELECTEDEGYPT PROJECTS
There are hundreds of future construction and civil infrastructure contracts across Egypt ranging from large-scale real estate and tourism projects to high speed railway and metro schemes. In all, there has never been a better time to invest in the Egyptian market opportunity Project Value ($m) MFTI - Golden Triangle Mining and Urban Development 29,000 MoHUUD – Egypt's Social Housing Program 16,600 Al Habtoor Group - Al Habtoor City in Cairo 8,500 Palm Hills Developments - 6 October City : Badya 8,494 MOT - Alexandria-Aswan High Speed Railway Line: Cairo toLuxor 6,335 MOT - Luxor-Hurghada Railway Line 4,730 Saudi MOT / Egypt MOT JV - King Salman Causeway (TiranCauseway) 4,000 NAT - Cairo Metro Network: Line 6 4,000 Heliopolis For Housing & Development / SODIC - Mixed Use Project in Cairo 3,800 NAT - Cairo Metro Network: Line 5 3,500 Egypt MOT - Alexandria: Max New Port 3,378 NUCA - 6th October City ResidentialCommunity 3,000 NUCA / Mountain View / Sisban Holding JV - Mountain View I-City 6thOctober 2,000 Jumeirah Real Estate / Sakan Developments JV - Jumeirah Bay Ras El Hekma 1,680 MoH - JANNA Housing Project Egypt 1,500 Atraba Integrated Holding – Integrated Medical City Project inCairo 1,000 MoHUD – Alamein City Hotels Development Program atMatrouh 1,000 DPA - Second Container Terminal (DEPCO) 1,000
Source: MEED Projects 9 MARKET SIZE
Of the nearly $200bn worth of future construction projects in Egypt, more than $71bn are mixed-use comprising a combination of residential, retail, leisure and commercial usage. Almost $60bn comprises infrastructure work to support these developments, and more than $40bn consists of solely residential projects, highlighting the huge, rising demand for more housing in the country where the population grows by almost 2 million everyyear
Breakdown of planned and un-awarded Egypt construction sector projects($m)
Terminal, 5739, 3% Commercial, 1584, 1% Education, Healthcare, 4266, 2% Retail, 1125, 1% 1866, 1% Hospitality, 3958, 2%
Residential, 33969, 18%
Infrastructure, 59241, 32%
Mixed-Use, 71772, 38%
Leisure, 3330, 2%
Source: MEED Projects MARKET SIZE
Of the future total, just under $10bn worth of contracts are currently in bid where the main construction tender has been issued and bids in some cases already submitted.
Of the remainder, more than $90bn of future projects are in design stage, indicating that they are due to come out to contractors to bid over the next 24 months or so. Longer term, there are nearly $75bn worth of projects in the study stage, highlighting the healthy pipeline of projectactivity.
Breakdown of planned and un-awarded Egypt construction sector projects by status($m)
In bid, 9590, 5%
Study, 73546, 42% Design, 93856, 53%
Source: MEED Projects TOP CLIENTS
The two largest future clients in Egypt are the Ministry of Transport and the Ministry of Housing Utilities & Urban Communities which are responsible for the country’s main infrastructure and public housing projects. The National Authority for Tunnels (NAT), the main client on Cairo’s metro network, is ranked third in terms of future work. Several private sector real estate developers also feature such as Emaar Misr, Palm Hills, Sakan Developments and Jumeirah Real Estate Egypt selected top construction and infrastructure clients by value of work planned($m) 0 5,000 10,000 15,000 20,000 25,000 Egypt Ministry of Transport Egypt Ministry of Housing Utilities & Urban Communities National Authority for Tunnels Palm Hills Developments Al Habtoor Group New Urban Communities Authority Heliopolis For Housing & Development / Six of October… Egypt Ministry of Investment and International Cooperation NMC Healthcare Saudi Arabia Ministry of Transport Atraba Integrated Holding Co Mountain View / Sisban Holding JV General Organisation of Physical Planning Emaar Misr Jumeirah Real Estate Investment Sakan Developments Al Masryeen for Medical Care Egyptian National Railways Hyde Park Properties for Development Al Ahly For Real Estate Development
Source: MEED Projects 12 SOME ACTIVE PROJECTS New Grand Egyptian Museum
Scope: One of the largest museum development projects in the world. Land area is 470,974 squaremeters divided into main museum and conference center building with area of 133,282 square meters.
Developer: Ministry of Culture
Stage: Nearing completion
Estimated value: $810 million
13 New El-Alamein city
Scope: A new mixed-use integrated city to accommodate more than 3 million people in phase 1. The development calls for construction of 20,000 residential units and 25,000 hotel rooms in the first phase alone.
Developer: Ministry of Housing
Stage: Construction
Estimated value: $5 billion
14 New administrative capital
Scope: New administrative capital of Egypt. 725 square km of land 21 residential areas 650 km of roads Capacity for 6.5 million people
Developer: Administrative Capital for Urban Development
Stage: Construction
Estimated value: $45 billion (Phase 1)
15 High-speed rail plans
Scope: 500 km of high speed modern rail network linking north and south Egypt and linking the Mediterranean with the Red Sea. The network consists of three main lines.
Developer: Ministry of Transport
Stage: In bidding
Estimated value: $14 billion
1 7 Rod al-FaragAxis
Scope: The Rod Al Farag Axis received The Guinness World Record for the widest suspension bridge in the world. The bridge is 540 meters long and 67.3 meters wide. It has 6 lanes in both direction. The suspension towers are 92 meters high with 160 cables each.
Developer: Ministry of Transport
Stage: Complete
Estimated value: $9.6 billion
17 Badya Palm Hills
Scope: 40,000 units residential development in 6th October City. The project Includes a shopping mall, schools, hotels and commercial offices.
Developer: Palm Hills Developments
Stage: Design
Estimated value: $8.5 billion
18 Jumeirah Bay Ras el-Hekma
Scope: 1.1 million square meters waterfront project with 3,500 residential units in seven zones surrounding a 270,000 square metre lagoon. The project features a 2 km beach, shopping mall and a hotel.
Developer: Jumeirah Real Estate and Sakan Developments
Stage: Design
Estimated value: $1.7 billion
19 Al Habtoor City Cairo
Scope: Three 5 stars hotels, three luxury residential towers, six mid-rise residential buildings, 204 luxury villas, An international school, shopping mall and polo club with two polo fields.
Developer: Al Habtoor
Stage: Study
Estimated value: $8.5 billion
20 Mostakbal City
Scope: Integrated mixed-use green city on 11,000 acres along the Cairo-Suez road. The development is divided into five phases. 50% of the project land is dedicated for open green spaces.
Developer: El Mostakbal Urban Development
Stage: Construction
Estimated value: $10 billion
21 Hyde Park New Cairo
Scope: 3,000An integrated villas and 18,000 townhouses, units residentialand 88project residential in New buildings.Cairo The project is built on 4.7 million square metersof landDeveloper: and includes DP World an office park,retail complex, schools and healthcare facilities.Stage: Construction
Developer:Estimated value: Hyde $5.6ParkbillionProperties
Stage: Construction
Estimated value: $5 billion
22 Cairo Metro Lines 3 and 4
Scope: Line 3 calls for the construction of 47.87 km of track and 39 stationsand is carried out in four phases. Line 3 links Cairo airport,Abbasiya, Ataba, Cairo University and Rod El Farag.
Line 4 Phase 1 is 18.8 km linking Hadayek El Ashgar in Giza to El Malek El Saleh station in Cairo. It comprises 17 stations.
Developer: Egypt National Authority for Tunnels
Stage: Construction
Estimated value: $15 billion
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