by Walaa Ghanem, TV presenter
Against all odds and despite the remote work shift the world has witnessed in the past two years, demand on commercial and administrative units in the Egyptian real estate market has skyrocketed, especially across new cities despite uncertainties. Invest-Gate digs deep into this market drive as it is deemed a new market niche for investment opportunities.
Over the past five years, the Egyptian real estate market has been thriving. This could be traced to the market dynamics along with the ongoing competition amongst the developers and their respective companies have created this leap in real estate in Egypt. Ahmed Hossam Awad, the CEO of Hogar Company for Construction and Development, says that the architects’ expertise and the constantly development in equipment have changed due to the competitive nature of the real estate market. “Every company is poised to deliver new products in a very paced and limited duration. In addition, the dashing technology that has evidently impacted the market infrastructure, especially post the Corona virus outbreak”, he comments.
The units’ purchasing tendencies have been somehow dropped during the pandemic until July 2021 and then it went up once again, according to Mohammed Hany El Assal, CEO of Misr Italia Properties. “The Egyptian consumer seems to be in favor of the residential properties. Yet, due to the inaugurations of new cities, together with the technological leap in the construction market, the consumer’s appetite is now inclined towards administrative and commercial real estate,” he says.
According to El Assal, nowadays clients think consider small spaces. According to research, most businesses prefer smaller units with outdoors spaces “as a breather for employees,” he comments. Customers want areas that are surrounded by restaurants, cafes, and greenery to be outlets for renters, and help them process their work in a convenient environment.
Mohammed Samir, a financial real estate expert, clarifies that the limited spaces are affiliated to franchises; for the commercial brands expanding in Egypt and their momentum would occupy various spaces at the New Administrative Capital (NAC) as well as in other new cities, whereas small startups prefer the online business option.
The convenient advanced infrastructure of new cities is another trigger. Awad explains that NAC as well as other major new cities across Egypt will feature the highest and smartest technological facilities. “The recent administrative buildings have been equipped with solar energy, Internet of Things and fully shun parking during traffic congestions or rush hours. Developers are now working to ensure embedding smart technology in all aspects to allow offers more feasibility,” he believes.
El Assal also notes that clients prefer the already registered administrative units over residential ones that still seek to acquire registration, adding that the consumer culture has changed and that was reflected on the market. “The first and the second cities’ generation have not been properly prepared for the new smart technology. So, the majority of people went for the fourth generation ones,” he comments.
New Cities Emersion is another crucial element in this equation. Samir points out, “The release of the new cities has created a new sequence for firstly materializing the utilities and service supplying measure ahead of the housing. This is to create a new holistic life in the newly built cities and to attract prospect inhabitance.”
El Assal adds that people went to the new cities because of the buildings that are well furnished with safety equipment and security cameras, so the trend of office buildings has already been rocketing.
Of course the initiatives introduced by the Central Bank of Egypt (CBE) is another major drive for the rising demand on commercial projects. Awad describes the CBE’s interests lessening initiative with the ingenious attempt for it lured people to invest their cash in real estate investment, as they are more secure if compared to the volatile gold purchasing.
Samir explains the mortgage financing initiative offered by CBE offered people long-duration loans to own a building with low interest rates, adding that most loans were allocated to residential real estate, yet a portion was allocated to office buildings’ investment.
Despite the current high prices of commercial units, Awad believes the wheel of purchasing is already rolling despite prices per sqm for an administrative unit have reached a range between EGP 180,000 -200,000. “Developers allow a 15-years-installment plan to ease the sales process, which was never heard of before. This is to guarantee the smoothness of cash flows to pay back their land and buildings installments,” he adds.
El Assal also notes that for its IL Bosco, Misr Italia Properties started with EGP 9500 per meter, while now it has reached a minimum of EGP 14,000. Nonetheless, he emphasizes that the purchasing processes are in its best phases.
Despite the change or work nature, the pandemic, and the current prices, the demand on commercial and administrative real estate will continue to flourish in the upcoming period across the new cities. The Egyptian consumer culture would rather invest in a property that is stable and safe than in gold or the stock market that is quite volatile. This culture is very beneficial for the new cities’ developers to utilize, construct and develop their new communities accordingly.
