Market Watch Report Government Policies and Investment in Egypt’s Real Estate Sector www.invest-gate.me October 2016 /invest-gate /invest.gate_magazine Information in this report is based on official an- nouncements by both developers and the Egyp- tian government. All figures and facts obtained through news mediums have been confirmed from at least two different sources. This text is intended solely for general market evaluation purposes. Any decisions based on conclusions from this document are the sole responsibility of the reader. Reproduction of any part of this doc- ument is prohibited without written consent. 2 LATEST INDUSTRY UPDATES Madbouly: Housing Ministry Allocates EGP 5,706 Units Offered for Rent for Low-income 37 B Budget to NUCA Citizens The Ministry of Housing, Utilities, and Urban Communities has Residential units were offered for low-income citizens start- allocated a budget of EGP 37 billion to the New Urban Com- ing October in several governorates and cities, according to munities Authority (NUCA) this year in a plan to attract new Minister of Housing, Utilities, and Urban Communities Mostafa investments and implement projects, Minister of Housing Mo- Madbouly, reported Invest-Gate. Citizens will be able to rent stafa Madbouly said in an interview with Daily News Egypt. the units within 10 governorate if their income is below EGP The ministry has moreover set policies that were considered 1,500. Residents will pay between EGP 300 and 410 with an controversial due to increasing the prices of lands in the Great- expected rent increase of 7% annually and a rental period of er Cairo area. Additionally the ministry committed to providing seven years, said Salah Hassan, Deputy Executive Director of more than 100,000 units in three phases to middle-income citi- the Social Housing Fund. In case of a large demand among zens through the Dar Misr Project while offering lands to Egyp- applicants, priorities are given to those living under more pre- tians living abroad through Beit Al Watan project to solve the carious circumstances. dollar shortage crisis. Ministry of Housing Studies Establishing Chinese Company Co-Finances New Middle-Income Compounds Administrative Capital The Ministry of Housing, Utilities, and Urban Communities has A Chinese construction company, China Fortune Land Devel- started studying a plan to establish compounds geared towards opment (CFLD), will invest $20 billion in Egypt’s New Adminis- middle-income earners, an official source told Invest-Gate. The trative Capital, reported Amwal Elghad. The company obtained plan is currently being studied, and follows from the great de- the right to develop and market the new capital within the sec- mand that met the Dar Misr middle-income housing project es- ond phase of the mega-project, according to Al Mal News. The tablished by the New Urban Communities Authority, the source contract was signed by Egyptian Minister of Housing, Utilities, added. The Dar Misr project revealed the great demand for and Urban Communities Mostafa Madbouly, Minister of Invest- such projects, prompting the government to take steps to build ment Dalia Khorshid, and the Chairman of CFLD, Tahrir News a comprehensive middle-income housing project, rather than reported. The new $20 billion investment adds to a previous separate residential units in different locations. The ministry is $15 billion agreement with China State Construction Engineer- studying the possibility of establishing an area within the com- ing Corporation (CSCEC) for a previous phase of the Adminis- pound to be dedicated to Egyptian expatriates working abroad. trative Capital, according to USA Today. NUCA to Finalize Electricity Station in New Egypt Partners with France to Develop Aswan in 2017 Sustainable Cities The New Urban Communities Authority (NUCA) has launched The Egyptian Ministry of Housing, Utilities, and Urban Commu- a new main power electricity station in New Aswan with two nities will partner with France’s Sustainable Cities Task-Force generators that will be completed next year, reported Al Borsa. to build a joint technical office designated for sustainable cities, The total cost of the project has amounted to EGP 60 million, reported Amwal Elghad. A protocol was signed by Egyptian according to Alaa Naseem, Executive Manager of Electricity Minister of Housing Mostafa Madbouly and President of the and Telecommunications in the NUCA. The new enhancement Sustainable Cities Task-Force Gerard Wolf, in Cairo. A total of will boost power from 10 MV to 50 MV, Naseem added, noting 160 French firms will participate in developing sustainable cit- that the total value of completed electricity projects in New As- ies. The office, operated by the New Urban Communities Au- wan recorded EGP 138.7 million, stretching over 635 kilome- thorities (NUCA) and the French task force, is to assess and ters within the city, while other networks are under construction implement projects related to sustainable cities in Egypt and to stretch over 333 kilometers. France, according to the ministry. Orascom Completes Al Masah Hotel in New Madbouly Discusses Possible Partnership Administrative Capital with UK Trade Envoy Orascom Construction has finalized construction on Al Masah Minister of Housing, Utilities, and Urban Communities Mosta- Hotel in the New Administrative Capital, in collaboration with fa Madbouly met with British trade envoy Jeffrey Donaldson the Armed Forces Engineering Authority, reported Al Borsa. to discuss the possibility of partnership in a number of fields, Further developments are being constructed around the hotel, reported Al Mal News. Among the proposed projects for co- which is owned by the Armed Forces. The hotel will be built operation were building low-cost developments and potential on 10 acres, and several contracting companies are construct- residential units in the New Administrative Capital and other ing water and power facilities for the building. The total cost of new cities. Madbouly also discussed the New El Alaimen City, the hotel ranges between EGP 700 million to EGP 900 million as well as future developments, noting that a large budget has due to a recent surge in prices of building material. Orascom been allocated to New Urban Communities Authority (NUCA) is responsible for developing the area surrounding the hotel, to build the basic foundations and public services in the new while the New Urban Communities Authority (NUCA) will be cities as soon as possible, according to Al Shorouk News. constructing on site facilities. 3 LATEST INDUSTRY UPDATES HCCD Subsidiaries Sign EGP 3 B Worth of NUCA Partners with GAFI to Offer 345 Lands Contracts The New Urban Communities Authorities (NUCA) has agreed Subsidiaries of the Holding Company for Construction and De- with the General Authority for Investments and Free Zones velopments (HCCD) have signed contracts worth EGP 3 billion (GAFI) to offer 345 land plots, reported Al Brosa. Both parties for projects to be completed in a year and a half, according are expected to agree on the conditions of the offerings, ac- to Mohamed Hegazy, CEO of HCCD, reported Amwal Elghad. cording to Tarek El Sebaey, Supervisor of NUCA’s Commercial The company has received orders from the government to work and Residential Sector. The lands will be targeted for multiple on national projects, including the New Administrative Capital. purposes in new cities with some being offered for residential The company expects revenues of EGP 600 million at the end projects to citizens with low-income. The total cost is EGP 4.7 of the current fiscal year as a result of the increasing business billion, EGP 3.5 billion of which will be dedicated for lands that conducted by the company. Works is expected to commence will include public services, while EGP 1.2 billion will be allocat- on the New El Alamein City and Toshka projects. Construction ed for land plots that will include social housing projects. works recorded a total of EGP 11 billion last year. Madbouly: Construction of 216 Units Com- Government Postpones Land Offering for pleted in New Qena Residential Development in Fayoum A total of 216 residential units have been completed out of the The Fayoum Housing Directorate has postponed the offering of total 4,892 units within a housing project located in New Qena, 158,000 square meters earmarked for residential and service according to Minister of Housing, Utitlities, and Urban Devel- projects to 2017, when all facilities on site have been construct- opment Mostafa Madbouly, reported Invest-Gate. Facilities are ed, reported Al Borsa. Currently, only 60% of the facilities have also being constructed in the project, including a hospital with been built on site, according to Ali Zain Al-Abdin, Representa- 175 beds that will be built on land measuring six acres in area tive of the Housing Ministry in Fayoum. The governorate is also of Al Nawadi, located north of the first district, as well as sever- considering revoking the construction contract from Al Sadeek al other buildings, according to Ahmed Arafa, the Head of the Contractors and offering it to other contractors, as the company New Qena Development Authority. violated its contract with the governorate, since facilities were scheduled to be completed last month. Al Sadeek Contractors 5 Contractors Appointed for Asmarat Project preciously received EGP 41.5 million to commence work on building the project’s facilities. Five contractors will start construction on the third district of the housing project in Al Asmarat that will replace informal set- tlements, according to Ahmed Taymour, Deputy Governor of NUCA Installs Monitor Control Devices in New Cairo, Amwal Elghad reported. The project is funded by the Cities Tahya Misr Fund and is set to be constructed on an area of 80 The New Urban Communities Authority (NUCA) will supply and acres, where the third district costs EGP 500 million and will be install 315 electronic remote street lighting, monitoring, and finalized in 2017.
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