Real estate companies are forming partnerships to increase their land portfolios despite the high land prices, said Maged Helmy, CEO of Wadi Degla Developments, reported Daily News Egypt.
Public corporations should offer land holdings to private companies to form ownership partnerships, given that public corporations do not have the capacity to develop those lands, said Helmy.
High land prices prohibit development, according to Maged Sherif, CEO of Sixth of October Development and Investment Company (SODIC). A majority of the capital allocated by the company was directed towards purchasing the land in the last auction, making development difficult.
SODIC and Heliopolis Housing signed a contract to co-develop 655 acres in New Heliopolis early in March 2016.
The scarcity of available land and high prices have forced some real estate companies to exit the market and leave certain demographics without housing, said Tarek Bahaa, commercial director of Abraj Misr, to Daily News Egypt.
Madaar Development revealed its plan to put shares on the Egyptian Exchange (EGX) as a means of expanding their shareholder base and financing options, said Gasser Bahgat, Chief Executive of Madaar Development.
According to Bahgat, the price of lands and lack of funding options are primary drivers for private companies to build partnerships.
Investors in the Arabian Gulf are seeking to partner with local real estate companies, said Mohamed Gamal, Head of investment at ERA Commercial Egypt.
In upcoming years, Gamal foresees a rise in the number of partnerships between Egyptian real estate developers.