With a wide list of projects worldwide, namely in the UAE, London, Montenegro, and Seychelles, Abu Dhabi Capital Group (ADCG) and Al-Ain Properties landed in Egypt with Capital Group Properties (CGP) and its debut project, Alburouj, back in 2015. We speak to the company’s Deputy CEO Amgad Hassanein about the latest on Alburouj and the company’s future expansion in the country. Capital Group Properties see Egypt an important investment hub; hence, it is here to stay.
How do you view the investment climate in Egypt?
Generally speaking, the drastic economic reform plan of Egypt that dates back to November 2016 was necessary to put Egypt on the investment world map… yes it is very harsh but it was a must.
We, as a developer, work in a number of countries, but unlike any other country, we find many privileges in the Egyptian market.
Investment in Egypt is stable and its growth has been very steady since 2011 in terms of prices, our sales, and revenues. The political instability we saw for years didn’t have much of an effect on the market. All investment incentives that the government offered has made the climate very attractive through the recent years.
We are based in Abu Dhabi, and we saw it as an opportunity back in 2015 to invest in Egypt, following those recent changes. We found that all hindering obstacles from working or doing business in Egypt have been properly addressed and corrected, including transferring revenues and profit outside, legislation and governmental approvals, and acquiring ready-to-build land with proper infrastructure base.
We believe that the investment climate in Egypt is progressing ever since 2014 and continues to develop.
How do you specifically view the real estate investment in Egypt today?
The demand in real estate in Egypt is exceptionally growing. There is approximately a three-million- demographic increase along with around one million marriages annually. Unlike in many other countries, Egypt has real demand on real estate, meaning that those investing in homes, are actually in need of it. This gives the real estate market trust and guarantee more than any other country across the region.
Again, because of the reform and pound float, prices have decreased when compared to world market, which is another attractive feature. The Egyptian real estate market is now way cheaper than those of neighboring countries such as Morocco, Turkey, and Jordan.
Which areas in Egypt do you see have great potential in development?
Egypt has about half a million demand in units every year divided between first and second homes. It is a given that such demand is concentrated in east and west Cairo for first home buyers and the Red Sea and North Coast for second home enthusiasts.
Capital Group Properties is now in East Cairo and eyeing the mentioned destinations for expansion.
Do you think that the “Real Estate Export” would actually attract foreign home buyers soon and not just Arabs?
You always need to identify your consumer before you set your target and which products you sell them. For first home purchases, it is always Egyptian expats and Arabs. To add an attractive feature to the first home market then you can sell residency like many European countries do today. To reach to the foreign home buyer then you must sell the country itself and this of course is the role of the government and not us developers. You need to market Egypt and market it well. The government must market the destination and then developers step in to market their products.
So does this clash or interacts with tourism?
It does not clash but the government’s role in this export business has to come from the government. You must identify again your client: which markets invest in second homes, what do they look for, and how to sell them your destinations. Then developers step in with their products. This topic is very complicated and must be given the proper attention it needs for it to develop.
Yet with our competitive prices we can compete well and I believe we will see foreigners buying homes here. You can get a house and residency for USD 250,000 which is nothing in the outside world today!
What does Capital Group Properties have in the pipeline?
Our concept when approaching the Egyptian market back in 2015 was new… We aim to sell you cities rather than houses. Before we launched our units, we signed with Smart Village and to have it branch out to east Cairo, “Alburouj Smart Village East”. We also signed with Cairo’s Cultural Hub “Culture Wheel” (El Sakia) of Abdel Moneim El Sawy. In appreciation of El Sawy’s Culture Wheel and its cultural input in Egypt, we hired one of the world renowned designers and have invested around EGP 80 mn in one of the most fantastic buildings of the world.
We cared for the community, the services, and facilities, before the unit itself. We want to give life to the destination where our project lies before we sell you houses… and this is how you sell houses. We want people to move in immediately; not by featuring ready-to-move in units, but ready-to-move in communities. We are to deliver our first parcel by next year. We are the only developer that not just stuck to the unit delivery date but committed to delivering fully-finished homes within a livable community. We have one of Egypt’s prominent private schools, Al Choueifat, opening soon too.
What is your forecast for the end of this year?
What I see is that having new approaches or areas of expansion, like our Alburouj in east Cairo, will open new appetite of investment and we will see this market developing really quickly. There are two decisions which the government needs to take to see a major positive effect in real estate and those are an update on foreigners’ residency for property law and, of course, real estate mortgage and finance. If those are properly addressed and implemented, I believe we will see real estate in a totally different level and its growth will exceed its current expectations drastically.