Egypt’s government has been undergoing a major development process, investing millions to build affordable housing projects to accommodate its growing population as part of a nationwide ‘Million-Housing-Unit’ plan. Upper Egypt, a region, which has been ignored for decades and given less attention compared to Greater Cairo and the Delta, is undergoing a major overhaul with the implementation of new cities and the construction of thousands of housing units and facilities. Invest-Gate sheds light on the housing projects in the new Upper Egyptian cities, as well as, efforts made by the private sector to invest in these emerging areas.

Upper Egypt Remodeled

New Urban Communities Authority (NUCA) Director of Public Relations Mona Kamel tells Invest-Gate that following “weak growth rates in Upper Egyptian cities and the failure of these cities to reach the targeted investments and house more people,” the housing ministry has set its eyes on Upper Egypt and adopted “serious policies to attract both investors and population blocs.”

Earlier this fiscal year, dating back to July 2017, Housing Minister Mostafa Madbouly laid out his ministry’s plan “to enter new cities in Upper Egypt as a developer and execute compounds, or gated communities,” Kamel reveals.

On the short-run, the ministry is “to build small compounds with 50 units in each new city as a start to attract citizens,” Kamel elaborates. She adds that the ministry relied on expert analysis and predictions that building of compounds in Upper Egyptian cities, which will suit all social classes, “will achieve a construction and investment boom and will attract citizens to live in these cities.”

The ministry also believes, according to Kamel, that investment opportunities in Upper Egypt, especially in the residential real estate sector, are better in Upper Egypt than in Cairo. The ministry official attributes this analysis to the fact that there are plenty of land in Upper Egypt with reasonable prices, and opportunities to target a wide range of social classes.

“Cairo, on the other hand, has become saturated with residential communities; it has plenty of projects and developers compete to build units for only one specific social class,” she adds.

But the state extending its sights towards the development of Upper Egypt is not solely to spread out the population and attract investments.

“The state wants to fight poverty and unemployment… put forward a future plan to develop the resources of each governorate in the fields of agriculture, industry, and trade to achieve comprehensive social and economic development,” Kamel explains.

Projects in Numbers

This plan will see NUCA pumping EGP 13 bn worth of investments in the new Upper Egyptian cities during the current and the upcoming fiscal years.

“During the FY2017-18, NUCA will execute projects worth around EGP 7.8 bn in Upper Egypt,” Kamel states.

“A total of 66,000 housing units have already been completed in Upper Egypt, while 40,000 units are currently under construction,” she adds.

But the ministry’s housing projects are not the only endeavor underway; construction has already started or is scheduled to start on a number of facilities and non-residential projects in these new cities. Kamel says a land has been allocated to building a branch for Abu El-Rish Children’s Hospital in Beni Suef with construction starting soon, while another location in New Sohag City has been selected to build a branch for Al-Orman Hospital.

Three governmental Nile Schools will be built in New Aswan, New Assiut, and New Beni Suef, according to Kamel, on a total area of 14.77 feddans. “While a school has been constructed in New Thebes on 10, 000 square meters,” she adds.

The Rest To Follow Suit

The housing ministry hopes this progress “would stimulate the private sector to seek and purchase the allocated lands in these governorates,” Kamel states.

Although the state, represented by the housing ministry, is the major developer in Upper Egypt, especially in the new cities, some developers have penetrated the market with successful results with many more expected to follow suit.

Giant developer Orascom Holding built Byoum Residence in Fayyoum, offering villas, twin villas, apartments, and serviced apartments. Orascom also entered a usufruct agreement with the Egyptian Government in 2005 to develop Amoun Island, located off the main Nile River bank in Aswan with a total project area of 22,000 square meter. The developer will build a luxury boutique-style hotel on the island, accommodating 38 luxurious suites with lounge areas, private pools,and a private library. While, the Saudi Egyptian Construction Company (SECON) has, what they described in press statements, “a successful housing project in New Assiut” and, following this success, “are looking to invest more in Upper Egypt,” adding that they are currently assessing lands to purchase and build more housing units in the area.

Meanwhile, Chairman of the Real Estate Investment Division at the Federation of Egyptian Chambers of Commerce Mamdouh Badr El-Din tells Invest-Gate, “Investors are willing to invest in Upper Egypt, but we want to know the state’s blueprints for the area first.”

Badr El-Din elaborates that investors “need to know where and when the schools, hospitals, and other facilities of a certain area will be built, so that we can develop communities near them.”

He says that investors are waiting for a meeting to be scheduled with the housing ministry, “other than that, there are no problems or obstacles…investors are eager to build in Upper Egypt,” he adds.

Upper Egypt comprises 10 governorates, inhabited by 35 million, who represent around 29.7% of Egypt’s total population. The housing ministry is currently implementing 10 new cities in Upper Egyptian governorates, according to information provided by NUCA. These new cities are New Fayyoum, New Beni Suef, New Minya, New Assiut, New Sohag, New Akhmim, New Qena, New Thebes, New Luxor, and New Aswan.