6th of October vs. New Cairo: Where to Buy?

Wednesday, 13th July 2016

By Doaa Farid

Since the 1970s, as a normal outcome to Cairo’s congested state, the inclination to expand by building new cities has grown, producing two comprehensive cities that have only been in the lead when it comes to residential and commercial real estate arena.

The two cities of 6th of October and New Cairo are similar in many ways, and were built to serve certain purposes and attract all sorts of social classes and businesses.

However,  each has its own clientele of investors, and more importantly, each also has certain buyers and residents who prefer one city to the other based on a number of amenities and desirable facets, including accessibility, proximity to certain schools, or just comfort.

Affordability:

6th of October City is inhabited by different social classes as it offers a variety of prices and different-sized residential units.  It consists of 13 residential districts, in addition to other projects such as Al Zohoor and Al Shabab districts.Prices in October New Cairo

The city is considered affordable to many social classes as the minimum price per meter starts from EGP 1,350 for apartments and EGP 2,200 for villas, according to Aqarmap. The maximum price per meter is EGP 13,250 for apartments and EGP 24,900 for villas.

The government is building residential units for low-income citizens in 6th of October under the framework of the Social Housing Program. It plans to hand 7,000 units over to buyers this year, out of a total 100,000 planned for the city.

New Cairo is deemed as one of the biggest new communities in Greater Cairo as it lies across 70,000 acres and is relatively new compared to 6th of October. The city is well known for its gated communities. Residential compounds in New Cairo are of higher quality and implied social class, than those of 6th of October, given that land prices are of a higher value. The area is much calmer than 6th of October and is known to house businessmen and government officials. Based on Aqarmap’s estimates, the minimum price per meter in New Cairo is EGP 2,300 for apartments and EGP 4,200 for villas, while the maximum price per meter is EGP 18,550 for apartments and EGP 20,250 for villas.

6th of October City tends to meet all social classes’ requirements, while satisfying the working class in an efficient way. New Cairo, on the other hand, adds a lot of value, especially community wise, for a relatively higher price.

Accessibility:

6th of October is accessible through the Central Axis road, which extends from the 26th of July Corridor in Mohandessin district, therefore, public transportation and private buses can be found in most Giza districts, going to the city.

To make it more accessible, the National Authority for Tunnels (NAT) has planned to construct a fourth metro line, which will connect 6th of October to downtown and intersect with the second metro line, through which lies Giza metro station.

For New Cairo, the main road leading to the area is the Ring Road, which connects the area to both Maadi and Nasr City. Al Musheer corridor has also linked 6th of October bridge to roads leading to the city. As a relatively new area, people could previously reach New Cairo only through private cars or taxis.  Now the city is directly connected to Nasr City and Ramsis through public buses.

Private buses going to New Cairo can also be found in Maadi and Haram. There is no metro line with a New Cairo destination, but Al Rehab-affiliated buses can take commuters from Saray Al Qobba metro station location to Al Rehab city in 30 minutes.

The two cities appear to be on equal footing when it comes to transportation and accessibility to the main parts the city; however, 6th of October has the additional benefit of a fourth metro line that will further boost its appeal as an integral part of Giza.

Infrastructure:

The infrastructure of 6th of October City is known to be effective and well established. It is equipped by two water plants and a sanitation plant. The city also has a gas-fired power plant with the capacity of 600 MW, while telecommunication lines operate well in the city.

The water supply in 6th of October depends mainly on a raw water transmission line that produces 1.7 million cubic meters/day to supply the water treatment plant in the city, which has twelve  pumps of 1.5 MW capacity each. The 120 km pipeline project, which was constructed by Allam Sons in 2014, spans between El Badrashein and Dahshour areas in Giza.

New Cairo, on the other hand, receives water through Obour water plant, which operates with a capacity of 260,000 cubic meters/day and maximum capacity of 550,000 cubic meters/day.

To improve sanitation services, a new wastewater plant was constructed in New Cairo, by a consortium of Orascom Construction and Spain-based Aqualia, and with the help of the International Finance Corporation (IFC). The plant started operating in 2013 and it works with a capacity of 250,000 cubic meters/day.

The area is equipped with an electricity sub-station that operates with the capacity of 250,000 KV; additionally, the power service in New Cairo is expecting a boom as the German electricity giant, Siemens, in cooperation with Orascom Construction and El Sewedy Electric, is building a 4.8 GW power plant in the New Cairo Administrative Capital, which will be located in proximity to New Cairo.

By default, investing in infrastructure is perceived to be the best approach to speed the development of a nascent city, attracting more investors and boosting the confidence of residents in the area. Both areas have well established infrastructure. However, water supply for 6th of October City is on stronger ground, while the expected infrastructure development for New Cairo is projected to give the area an upper hand in that regard.

Industrial Zones:

6th of October city had long been known for its many factories, which explains  why there is an area called ‘the Industrial Zone’ in the district.; However, in the 1990’s the area started to host residential projects following the inauguration of the first compound there called Dreamland. 6th of October’s industrial zone is constantly booming with low or no interference to the residential areas. The closest residential area to the zone is at least a few kilometers away, according to residents of the city.

New Cairo, on the other hand, includes headquarters of several multinational companies such as Schnieder Electric and Italy’s oil and gas producer Edison.

The new Cairo Administrative Capital is also expected to draw additional investments to New Cairo as real estate developers are eager to participate in the new project. The EGP 400 billion ($45 billion) new capital was announced in 2015 during Egypt’s Economic Development Conference (EEDC) and is considered to be Egypt’s first sky-reaching project.

Industrial zones are a double-edge sword. While they aid in development of an area by directing more investment towards it, industrial zones also tend to affect the value of nearby residential units. With 6th of October harboring more factories, and New Cairo leaning more towards power plants and commercial projects, 6th of October City may be perceived as of lesser value. However, due to distance, residential units in both cities are not affected negatively by industrial projects.

Schools and Universities:

Apart from being close to all amenities, 6th of October is known for different levels of public and international schools such as the British International School in Cairo (BISC), the International Schools of Choueifat, Thebes, and Dream International Schools. Several private universities were also built in 6th of October, such as Misr University for Science and Technology (MUST), Modern Sciences and Arts University (MSA), 6th of October University, Ahram Canadian University, and Nile University.

New Cairo is also a home for prestigious private universities such as the American University in Cairo (AUC), the German University in Cairo (GUC), the Canadian International College (CIC) and Future University in Egypt (FUE).

A number of high ranking international schools also stand in New Cairo such as the Modern English School (MES), New Cairo British International School, and Green Heights International School.

The two cities have schools that are equally prestigious. New Cairo, however, is the go-to city for establishing efficiency and a lucrative forecast, especially with the new administrative capital being built in the near future.

Commercial Venues and Hangout Spots:

6th of October is famous for its hotels that even Cairenes head to for weekends, such as the Hilton Dreamland Hotel, Sheraton Hotel, Novotel and Swiss Inn Pyramids Golf Resort.

The city is also privileged to host Egypt’s largest and most popular amusement park: Dream Park. It also has mega commercial projects such as the Mall of Arabia, Arkan, Galleria 40 and Dandy Mega Mall, Cityscape, Degla Gardens, Al Gezira Plaza, Americana Plaza and Porto Cairo Mall.

Additionally, UAE-based Majid Al Futtaim’s construction of the Mall of Egypt is expected to further boost the market in 6th of October.

Mall of Egypt will be built over 440,000 square meters. The two-floored mall will encompass a ski slope, and 4D cinema screens. Majid Al Futtaim has plans to build roads and bridges to facilitate easy access to the mall.

Al Futtaim Group established Cairo Festival City in New Cairo, a mall that span over an area of 700 acres, and is known for offering spots for international clothing brands and famous dining venues. Additionally, New Cairo residents enjoy beautiful venues and massive malls such as Downtown Katameya Mall, Porto Cairo, the Seven Stars Malls, and Meeting Point.

Both cities are studded with commercial projects that attract nearby residents as well as residents from opposite ends of greater Cairo. Mall of Egypt is projected to further boost the value of neighboring residential units. However, New Cairo is on similar grounds with its fast developing commercial projects.

Resale Value

The average unit in most major areas in Egypt is expected to increase from 5% to 15% per year, according to Ayman Sami, Country Head of Jones Lang Lasalle (JLL). While any investment in either area, 6th of October or New Cairo, will be subject to said percentage of increase, several factors can influence the resale value of residential units.  Location, community, perceived social class of the area, access to public transportation, and quality of schools and universities all matter. In addition, most people look for the delicate balance of a quiet residential area that is still close to shopping areas and access to public transportation. The specifications of the unit itself, such as the floor space, number of bedrooms, garage, and access to greenery, come into the equation next.

Major projects in the area can significantly affect the resale value as well. For 6th of October, major new commercial projects such as Mall of Egypt are expected to enhance the resale value for the entire area in the coming years.

Similarly, in New Cairo the resale value is expected to skyrocket in the coming years thanks to the planned Administrative Capital that will extend from New Cairo to the borders of Ain Sokhna.

Where to Buy?

Both areas prove to be a sound investment opportunity for developers and homeowners alike. Ultimately, the decision of where to buy is based on individual needs. A young family may opt for a cheaper area with good schools and sound accessibility such as that of 6th of October, while a family interested in a future resale value may prefer investing in New Cairo, as it is expected to boom in the near future.

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