THE EGYPT CONSTRUCTION Everything Infrastructure & Construction. PROJECTS MARKET Building the New Egypt. Analysis of market potential Egypt is in the midst of a construction Value of contracts awarded in Egypt boom. In total, more than $20bn worth all sectors, 2015-18 ($m) MARKET of real estate and civil infrastructure projects valued $50m or above have been SIZE awarded over the past two years alone. Everywhere across Cairo, huge billboards advertise dozens of new real estate 30,000 developments demonstrating vividly the scale of opportunity. The Egyptian construction sector is

enjoying an unprecedented boom as 20,000 the real estate market benefits from an improved economy, high demand for new housing to back substantial population growth, and government incentives to

stimulate the market. 10,000 Egypt is in fact the only country in the Middle East & North Africa (MENA) where overall spending on projects has grown in the past two years, and it has overtaken Saudi Arabia as the second 0 largest single projects market in the 2015 2016 2017 2018 region as a whole, recording in 2018 more than $33bn of contract awards. KEY EGYPT ECONOMIC INDICATORS, 2018 Nominal GDP ($bn), 2017 299 DRIVERS Real GDP growth, 2017e (%) 4.2 Real GDP growth, 2018f (%) 5.2

Non-oil real GDP growth, 2018f (%) 4.2 The drivers for this construction renaissance are clear. With the Arab world’s largest population of around 100 Oil real GDP growth, 2018f (%) 22.8 million people, Egypt already has a considerable latent Crude oil production (million b/d) 0.6 demand for housing and social infrastructure. But population growth of more than 1 million each year, a Natural gas production (billion cf/d) 5.1 population density rate of 46,000 per square kilometre in Fiscal breakeven oil price ($/barrel) 55.0 Cairo, and the fact that more than 50% of the population Fiscal balance (% of GDP) -10.0 is below the age of 25, these are the perfect ingredients for a sustainable construction boom for years, if not Government debt (% of GDP) 91.2 decades, to come. Current account balance (% of GDP) -4.4 The market has been favored by strong economic growth Official reserves ($bn) 35.5 of more than 5% in 2018, and a construction-focused government which is prioritising delivery of projects and CPI inflation (%) 10.4 industrialisation strategy. Egypt’s rapid repositioning Unemployment rate (% of labour force) 11.1 from a net gas importer four years ago to net exporter today, thanks to the fast-tracked development of the offshore Zohr gas field, has helped underpin this economic recovery and support the state’s projects drive. 2018 PROJECT VALUE ($M) ACCUD - The Capital Cairo: Central Business District 3,000 ACCUD - The Capital Cairo: Central Business District Phase 2 2,800 SELECTED NUCA - The New Mansoura City 1,350 NAT - Cairo Metro Network: Line 3 - Phase 3: 1,244 EGYPT El-Thawra Line Civil Work NAT - Light Rail Transit : LRT Line (66 kms) 1,240 NAT - Cairo Metro Network: Line 4: Phase 1: 950 CONTRACT Civil Package 1 (CP 401) Hassan Allam Properties - 800 AWARDS El Mostakbal City HAPTown Residential Complex MHUUD - Rod El Farag Highway 790 Madaar Development - Azha Ain El-Sokhna (Phase I) 750 The key and perhaps best-known active construction project in Egypt is the new Administrative Capital to the east of Cairo. Involving the Almarasem Development - Fifth Square 745 creation of a totally new from the ground-up city, the multi-billion- SCZONE - Al Sokhna Port Second Basin Development 600 dollar project will host the government when it is complete as well as NAT - Cairo Metro Network : Line 3 - Phase 4: Package 4B 535 tens of thousands of new residents. Work on the massive project is well under way, with hundreds of individual contracts already awarded. NAT - Cairo Metro Network: Line 3 - Phase 3: 530 Electromechanical Works Other significant active real estate and civil infrastructure contracts Palm Hills / Madinet Nasr : Capital Garden 500 include the huge new New Alamein City on the North Coast, the new Egyptian Grand Museum, a host of new hotel and tourism MAF - Almaza City Centre 450 developments, and the expansion of the existing Cairo metro network. Egypt National Cancer Institute - National Cancer Institute 400 Egypt selected top construction and infrastructure TOP clients by value of work under execution ($m) CLIENTS 0 2,000 4,000 6,000 8,000 10,000 SUEZ CANAL AUTHORITY In terms of the leading clients, the EGYPT MINISTRY OF HOUSING UTILITIES rankings highlight that the market & URBAN COMMUNITIES is comprised of both government and private sector developers, EL MOSTAKBAL URBAN DEVELOPMENT unlike other markets where state bodies dominate. EMAAR MISR The local projects market has become increasingly attractive to EGYPT MINISTRY OF TRANSPORT Gulf real estate developers, like Emaar and Al-Futtaim, as the CITYSTARS GCC market slows and because Egypt has considerable long-term AL FUTTAIM GROUP potential.

CAPITAL GROUP PROPERTIES Egypt selected top construction and infrastructure TOP contractors by value of work under execution ($m)

CONTRACTORS 0 1,000 2,000 3,000 4,000 5,000 6,000

It is a similar story among the leading CHINA STATE CONSTRUCTION & HASSAN ALLAM CONSTRUCTION contractors. Both local and international firms have been able to take advantage of PETROJET the opportunity which again demonstrates the openness of the local market. Chinese SIAC CONSTRUCTION contractors which have been able to bring financing have in particular been AL MARASEM INTERNATIONAL successful in the market.

CHINA HARBOUR ENGINEERING

VINCI

CHINA RAILWAY

ERYUAN Value of Egypt planned and un-awarded contracts by sector ($m) 120,000 FUTURE 100,000 PIPELINE 80,000 Egypt has a project pipeline larger than any other regional market after 60,000 Saudi Arabia and the UAE which is over $300bn of known planned and un-awarded projects. Construction is by far the largest future market in the 40,000 country with more than $120bn worth of planned projects and growing.

20,000

0 Chemical Construction Gas Oil Transport FUTURE PROJECT VALUE ($M) MFTI - Golden Triangle Mining and Urban Development 29,000 SELECTED MoHUUD – Egypt’s Social Housing Program 16,600 Al Habtoor Group - Al Habtoor City in Cairo 8,500

EGYPT Palm Hills Developments - 6 October City: Badya 8,494

MOT - Alexandria-Aswan High Speed Railway Line: 6,335 PROJECTS Cairo to Luxor

MOT - Luxor-Hurghada Railway Line 4,730 There are hundreds of future construction and civil infrastructure Saudi MOT / Egypt MOT JV - 4,000 King Salman Causeway (Tiran Causeway) contracts across Egypt ranging from large-scale real estate and tourism NAT - Cairo Metro Network: Line 6 4,000 projects to high speed railway and metro schemes. In all, there has Heliopolis For Housing & Development / SODIC - 3,800 never been a better time to invest in Mixed Use Project in Cairo the Egyptian market. NAT - Cairo Metro Network: Line 5 3,500

Egypt MOT - Alexandria: Max New Port 3,378

NUCA - 6th October City Residential Community 3,000 FUTURE PROJECT VALUE ($M) NUCA / Mountain View / Sisban Holding JV - 2,000 Mountain View I-City 6th October

SELECTED Jumeirah Real Estate / Sakan Developments JV - 1,680 Jumeirah Bay Ras El Hekma

EGYPT MoH - JANNA Housing Project Egypt 1,500

Atraba Integrated Holding – 1,000 PROJECTS Integrated Medical City Project in Cairo MoHUD – Alamein City Hotels Development 1,000 (CONTINUED) Program at Matrouh

DPA - Second Container Terminal (DEPCO) 1,000 SOME ACTIVE PROJECTS 01.

NEW GRAND EGYPTIAN MUSEUM

GIZA, GREATER CAIRO 02.

NEW EL-ALAMEIN CITY

MARKAZ AL ALAMEIN 03.

NEW ADMINISTRATIVE CAPITAL

GREATER CAIRO 04.

HIGH-SPEED RAIL PLANS 05.

ROD AL-FARAG AXIS

CAIRO 06.

BADYA PALM HILLS

GIZA GOVERNORATE 07.

JUMEIRAH BAY RAS EL-HEKMA

RAS ELHEKMA MARCH 2019 Prepared by Ed James Director of Content & Analysis, MEED Projects [email protected]