While the North Coast attracts heavy volumes of Egyptian clientele every summer, particularly with the ongoing growth in commercial activities, a lot of these types of projects might not be attractive to foreign tourists. Invest-Gate explores the transformation of commercial activities in the North Coast and reveals the recent market trends based on expert opinion.
“The coastal area is one of the popular weekend places for domestic tourists during the year; however, the retail landscape is limited in developments,’ says Colliers International Egypt Director Karim Helal. “There are little or no standalone retail outlets outside residential compounds,” he tells Invest-Gate, assessing the current commercial platform in the North Coast areas.
Running along the Mediterranean coastline between Alexandria and Marsa Matrouh, the North Coast features iconic beaches and restaurants but less water sports or leisure activities in comparison to other popular destinations, according to a Colliers International report. International inflows remain reportedly due to the scarcity of activities of Bedouin origins, that including culturally performed rituals of the community living in the desert, safaris, camping etc., and hotels despite continued popularity of commercial destinations to Egyptians. (needs to be rephrased)
Helal says that the North Coast market remains undersupplied despite holding the opportunity of introducing new real estate products that can affect occupancy rates and price premiums.
“The area lacks the general community infrastructure such as schools, healthcare facilities, shopping malls, and other day-to-day social/ family entertainment facilities,” he adds.
The government set out a development plan in 1982 to develop touristic projects in the North West Coast, which included the integration of agriculture and industrial development as well as exploring the region’s natural resources. Marakia Village was among the first touristic villages developed in the North Coast in 1991. Constructed by the Egyptian government, the project included villas and chalets, artificial lakes, lagoons, water-based activities, leisure centers, in addition to other facilities and services. Marina Al-Alamein was also among the first projects constructed in the coastal region, featuring Mediterranean Cabanas, fishponds, fishing activities, camping area, and a marina.
Heavy flows of Egyptian vacationers overcrowded Alexandria, Agamy and other North Coast destinations over time. Al-Alamein and Ras El Hekma further West remain popular. Egyptians interested in purchasing a second home in the North Coast are generally aged between 35 and 45 years of age. This clientele usually provide a down payment of EGP 150,000 and are often offered flexible payment plans, according to Colliers International.
Purchases in the North Coast are often made by clientele to serve the dual purpose of offering an investment against currency decline as well as providing the leisure and entertainment facilities of first home developments. Helal says that integrating entertainment facilities with residential communities will bring about high returns on investment.
“Moreover, as the market has developed, so has the sophistication of the buyers who look to extend either their stay or rental returns from their investment. To attract these buyers, developers need to look beyond the limited retail and F&B offerings, creating pull factors. These include boarding schools, hospitals and clinics, educational facilities, retirement communities, and rehabilitation centers,” Helal says. Despite the strength of retail and other types of commercial behaviors in the region, particularly with newer developments such as the likes of Marassi, the region is lacking in cultural activities.
Marassi features distinctive retail and entertainment venues tailored specifically for high-end users, according to their official website. The project includes M Porium, a 5,000 square meter plaza containing 15 eateries, services, retail outlets, and a Gold clubhouse, hosting concerts and events during the peak season. Art galleries, coffee shops, and nightlife spots are also found onsite. 6ix Degrees remains among the popular destinations, offering themed nights at Hacienda Bay. Summer 2017 is expected to witness the inauguration of a golf course at Hacienda Bay. Meanwhile, the Golf Porto Marina offers the only 18-hole Golf Course in the North Coast.
“Given that the North Coast is an established vacation destination, we do not see many opportunities for commercial activities outside the lifestyle community, retail and commercial offerings,” said Helal. In efforts to expand the current clientele base at the North Coast, Colliers recommends capitalizing on fitness camps and health retreats.
Expansion of retail and commercial activities requires certain procedures to be carried out, according to Essam Hafez, Retail Country Manager of Al-Futtaim Group. “In my opinion, in order to develop malls in cities there has to be feasibility and viability to apply retail projects.
There are factors to consider that we need to guarantee such as whether commodities are permitted or not. If there is optimism and commitment towards introducing the retail market in such areas then it is definitely manageable,” Hafez tells Invest-Gate.
Higher domestic and international occupancy rates could be witnessed if commercial activities are expanded throughout the North Coast region, based on experts’ opinions, as many Egyptians already continue to flee every summer to the cool breeze in the North Coast.