At its first summit, BATIMAT Egypt 2017 focuses on the governmental urban development projects and those of the private sector, emphasizing investment opportunities and urging stability, Invest-Gate reports.
Suez Canal Economic Zone (SCZone) progress is underway to include logistic, industrial, and residential communities that all connect easily to Suez Canal ports. “SCZone will be able to accommodate a mixed-use residential community in the upcoming period in areas of east Port Said and Ain Sokhna,” says Head of General Authority for SCZone Ahmed Darwish.
Despite the area lacking an airport, Darwish believes that the soon-to-be- finished international airport at Katameya, serving the new Administrative Capital, is likely to also serve cities of Ain Sokhna and Port Said.
In line with Egypt’s developmental projects at the SCZone, comes the very promising new Administrative Capital, as described by many among the attendees. Orascom Construction Trending Director Hani Messiha reckons, “SCZone is not the only major development taking place at the moment. Currently, the country is going through crucial developments, including the new Administrative Capital.”
Messiha also sheds light on the other projects underway, including the underground (Metro) project and the nationwide electricity stations. “The Siemens project is one of the best developments in the pipeline with a contract worth of EGP 120 bn,” he adds.
Despite the promising investments recurring in the upcoming period, developers fear the negative impact that these projects may hold amid the implementation process.
“There is a lack of contractors and subcontractors in the market,” says Messiha, pointing out the negative impact the frequent price increase has on such mammoth projects, which leads to delays and lack of manpower.
“We also suffer from the shortage of the foreign currency… Orascom Construction has delayed our plans to import materials because of it. The high interest rates imposed by banks compared to the previous 10% are also another problem,” he admits.
Messiha predicts a slowdown in construction performance in the upcoming period, emphasizing that the development sector has its cycle of highs and lows.
At BATIMAT Egypt Summit 2017 property developers also share their plans despite of their fears today given the current economic status. Mohamed Mekkawy, managing director at Al-Futtaim Group Real Estate, announces Al-Futtaim Group plans to offer tenders at Cairo Festival City by the end of 2017 but awaiting the stability of the foreign exchange rate. Furthermore, Al-Futtaim Group is to promote their projects in UAE next May.
As for real estate prices in Egypt, Mekkawy emphasizes, “the prices of real estate will not decrease at any time soon.”
“We abide by the international prices and given the current foreign exchange rate, prices will continue to rise,” he elaborates, “we hope it stabilizes soon so that contractors commence their projects and developers fix their prices,” Mekkawy tells Invest-Gate.
Hassan Allam Holding COO Mohamed El Dahshoury adds that real estate activity is currently increasing, hence, creating versatile opportunities to contractors.
“Several infrastructure projects are currently needed and Hassan Allam Holding is ready to contribute… 45% of our works is focused on real estate while the latter is focused on developing infrastructure works,” says El Dahshoury.
“We are currently constructing cement factory, hotels, and real estate project in Algeria and a university in Saudi Arabia in parallel to our works in Egypt, which includes rural sanitations, electricity, and road networks across the country,” El Dahshoury tell Invest-Gate.
El Dahshoury believes that good real estate investments are in the pipeline; however, he urges for balanced contracts between investors and contractors that can handle unprecedented price fluctuations in efforts improve construction sector.
Some other private developers focus on the market’s transitional phase towards modernization, including Sharbatly Group CEO Mohamed Abo El Zayed. “Today’s developers have a bigger role in building mixed-use communities to increase hospitality, office, along with, human development,” says Abo El Zayed. Abo El Zayed highlights the importance of developers’ role in increasing urban development to 5% in 2030.