On the hospitality front, occupancy levels are quite healthy and room rates are much higher than before, and with the introduction of the Grand Egyptian Museum, it will be a big plus for tourism on the West side of the city.
What are some of the attractive factors for foreign investors?
If you look at the cost of doing business in Egypt it is lower than many other parts of the world. There is also the low cost of capital. If you look at the sales price of a unit it is the lowest price in the world with a big difference in price, in addition Egypt has quite high yields. The only challenge that investors are facing at the moment is that the bank interest rates are quite high, and this does make it challenging for investors to look at the market. That saying, it has dropped, and we expect it drop further. This is the big difference between the Egyptian market and anywhere else in the world, interest rates are falling in Egypt while being hiked up everywhere else in the world
How have developers shifted their focus to adjust to consumer demand market dynamics?
The market has become very competitive in the last few years encouraging developers to shift their focus when they sell. Developers are now looking at adding more amenities to their residential components, creating a lifestyle community around it rather than purely residential. They are trying to look at the wider community and trying to create a lifestyle around it – it’s more about community development now.
What are some of the key government initiatives positively impacting the market?
The government is looking at streamlining the process of purchasing real estate for investors and making it efficient and easier.
The market itself is attractive and what we’re seeing is that the government, together with leading developers are going to countries around the world on a tour promoting Egypt as an investment destination.
There is also a strong push on the industrialisation sector. They are trying to generate more jobs and trying to attract more investors. As the market improves, we’ll start to see more private and foreign investors coming into the market.
What are your thoughts on the supply and demand gap?
There isn’t an oversupply despite the feeling in the market. It’s just about getting the positioning right and targeting the right segment. A lot of these projects are targeting the top tier of the market and are not targeting the middle and lower income and even some in the top tier are impacted by the price. Affordability has also changed in the market and the product types need to change as well.
What is the outlook for 2019?
Economic growth will improve and as a result the real estate market will follow, and demand will increase along with rental growth.