Antoine El Khoury: Institutional Real Estate Future In Egypt Unfolds Massive Opportunities

Antoine El Khoury: Institutional Real Estate Future In Egypt Unfolds Massive Opportunities

Antoine El Khoury, Managing Director of TAMEER, is an international real estate investment professional with 33 years of experience globally. He is a strong believer in the future of institutional real estate investment in Egypt. In his speech at the cityscape conference Egypt in September 2021, he shared a number of principles that are being implemented by TAMEER. This new approach to real estate aims to align the practice in Egypt with the mindset of institutional investors and put Egypt on the global investment map. We have had a conversation with him, on the margin of cityscape conference, where he shared his thoughts about real estate and investment.

You have often expressed your strong optimism about the real estate sector in egypt, while other voices in the market speak about the risk of a bubble. What are the rationales behind your optimism?

A study published in 2019 forecasted that Egypt may become the seventh economy in the world by 2030, with a GDP that may grow from a current 370 billion to several trillions, while demography may increase by 20 percent during the same period. I personally do not trust mathematical models and I believe that no one can forecast the future accurately. However, if we look at the last 10 years, we realize that Egypt has been going through a tremendous transformation. This process, that is now accelerating, is visible in most of the areas of the Egyptian society and economy. Deep transformations have occurred in real estate, F&B, shopping, consuming behavior, technology, startups, manufacturing, fashion, infrastructure, finance, energy and so on. Other areas such as data, logistics, healthcare and education are showing strong potential and their development is being planned and supported by the authorities. This transformation is backed by a stable environment and improving macro-economy indicators. This is turning Egypt into one of the fastest growing and the most attractive and stable investment destinations in the world. The country is attracting hundreds of multinational companies and steady foreign investments in most of the economy’s sectors.

While residential real estate is driven by demography and faces liquidity and purchasing power challenges, professional real estate on the other hand is driven by economy growth and is expected to develop. Economy actually cannot grow without real estate. Economy growth requires office spaces, factories and so on, and the growth of the middle class stimulates consuming and development of retail space. The challenge here is to be able to fund the growth of real estate and to balance funding resources between investing in property and investing in the productive economy. To resolve this equation, we will need to change the mindset of real estate in Egypt and place the country on the global real estate map.

What do you mean by changing the mindset and why do we need to attract institutional investors?

Ten years ago, a couple of entrepreneurial Egyptian minds transformed the real estate from an industry driven by production and cost management into an industry focused on customer experience, marketing and creating emotional value. Instead of selling bricks and mortars, the sector started selling experience. This was a revolution that has lifted-up the whole real estate sector and turned Egyptian real estate into one of the most sophisticated sectors in the world. However, the market did not diversify enough in terms of asset classes, nor in terms of investment and asset management. We are still driven by off-plan sales and we concentrate on what institutional investors call “speculative development”. This is highly positioned on the investment risk curve and does not attract large international equity investors.

The income-generating real estate investment market represents globally around USD 750 bn of transactions every year. The share of Egypt from these transactions is almost null. It is a fact while the country offers plenty of investment opportunities and a very strong return potential. This is a weakness that needs to be addressed, through migrating our mindset from development towards asset management. Therefore, we start walking-down the risk curve and offer opportunities that match the demand of institutional investors. Real estate players in Egypt are highly educated and knowledgeable. What is needed is a change in the sector’s mindset. That would be the second revolution in the real estate sector.

If we succeed in resolving this equation, we may attract billions of USD in FDI every year to fund the real estate needs, which, in return, will make more investment capabilities available for the productive industries. The benefits for the sector, the economy, and the foreign investors are tremendous.

What is TAMEER doing to promote foreign investment, and what are the company’s current projects?

We have recently launched at the French Embassy in Cairo, URBAN BUSINESS LANE (UBL), a 91,000 sqm Enterprise District that is located in URBAN WALK, along the American University Avenue in New Cairo. This is the first business and retail destination in Egypt that has been designed to become a European-like urban, vibrant and car-free destination. It is designed by renowned international firms and is targeting multinational and large national corporations, as well as professional and institutional investors. The project is promoted within the international community and offers investors the opportunity of “walking-down the risk curve” and creating extremely attractive capital growth and returns. Marketing this opportunity has succeeded and in fact has exceeded our expectations, which demonstrates how much the market is responsive to our mindset.

Does it mean that TAMEER is diverting from residential developments?

Not at all. We are diversifying towards professional real estate that targets institutional, income-generating investors, based on our belief that this is going to be the future growth in the sector. The residential area remains however our historic strength. TAMEER has been operational in this area for 67 years and we have already successfully delivered more than 27,500 residential units. We are now launching new residential concepts in AZAD VIEWS, with a very diversified and innovative offering.

What is your last word?

We live in an era where money does not generate itself anymore. The only way to wealth is to create value, through education, innovation, determination and ethics. Growth is a painful process that takes time and requires patience and confidence. I am fully convinced that Egypt is on the right track.


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