Invest-Gate holds a roundtable on the fourth-generation cities under construction all over Egypt, in collaboration with the Egyptian Businessmen Association (EBA), on October 12th, in the Nile Ritz Carlton with the title “4th Generation Cities: Opportunities & Challenges,” shedding light on business opportunities in fourth generation cities and actualization of sustainable green urbanization.
Egypt embarked on a host of national projects some years ago to lay out the new infrastructure required for a modern state. The efforts started with an extensive network of roads to connect all the country’s cities with each other, followed by the building of new fourth-generation cities that will provide living areas and services for all social brackets.
The new fourth-generation cities have almost doubled the urbanization rate in Egypt, which for decades stood at around 7% of the country’s total area.
The roundtable aims at presenting and exchanging visions and proposals on the future of fourth-generation cities. This falls in line with Invest-Gate’s belief in the importance of discussing opportunities and challenges for fourth-generation cities, which contributes to placing Egypt on the global real estate export map. This, in turn, will positively affect the performance of Egypt’s economy over the coming years.
The discussion sessions was moderated by Fathallah Fawzy, Chairman of Construction Committee Egyptian Businessmen’s Association (EBA), and attended by Waleed Abbas, Assistant of Minister of Housing for the Affairs of the New Urban Communities Authority (NUCA), Bedeir Rizk, CEO of PARAGON Developments, Mohamed Taher, Chairman of Nile Developments, Nader Khozam, Chairman and CEO of IL Cazar Development, Mohamed Galal, Managing Director of Misr Real Estate Assets Management, Hassan Nasr, CEO of Gates Developments, Sherif Hamouda, CEO of GV Development, Mohamed Al Taher, CEO of Saudi Egyptian Developers, Ashraf Boulos, Chairman and CEO of Cornerstone Development, Raef Fahmi, Managing Chairman of Raeffahmi Architects, Ayman Sami, Country Head of JLL-Egypt, Fouad Zayed, vice president of Digital Energy and EcoStruxure Egypt, North East Africa and Levant Cluster at Schneider Electric, and Amgad Khattab, General Manager of Engineering Solutions.
The roundtable’s first session, “Opportunities,” tackled the potential of raising the current demand in the new cities, and developers’ role in achieving urban development in fourth generation cities. Real estate experts discussed the role of cooperation between the government and the private sector to implement various projects in new cities, in addition to achieving sustainability in fourth-generation cities, since there is a global transformation towards the sustainability of real estate, as a major solution to face the ongoing environmental changes.
Fourth-generation cities also follow Egypt’s vision for sustainable development 2030, as the country will host “COP 27” in November 2022 in Sharm El-Sheikh, and they are considered the best solution to reduce the negative impact of the real estate sector on climate change. During the session, the speakers shed the light on Egypt’s plan to go for LEED-certified buildings, as Egypt has only 23 certified ones. They also discussed the high return on investment in new cities, especially in the NAC, and how new cities attract more foreign investment, supporting the export of real estate (transforming New Alamein to be a global destination). The last discussed matter was the means of marketing the investment opportunities available in the new cities inside and outside Egypt for both, the government and developers.
Mohamed Fouad, Invest-Gate’s CEO and Managing Partner, says: “Since its establishment in 2017, Invest-Gate has held a series of important events, as it has been always keen on having a key role in forming the real estate sector through discussion and analysis of all subjects concerning the sector.”
He adds: “The goal of this roundtable is shedding light on the means for cooperation among key players in the Egyptian real estate sector to benefit from available investment opportunities in fourth generation cities, in addition to discussing the government efforts in collaboration with the private sector to overcome all challenges facing developers and investors with regard to these cities.”
Fouad stresses the importance of raising awareness of the significance of building sustainable green cities.
Fawzy notes: “The real estate development industry is a driver of development for the Egyptian economy, and sustainable green urbanization is a top priority to the government for the current period, in tandem with the preparations for the hosting of COP27.”
Abbas states: “The housing ministry took the initiative in building smart cities in 2014. Sustainable smart cities will create more jobs and reduce carbon emissions. The volume of buildings in smart cities doesn’t exceed 25% of the total size of those cities.”
Rizk comments that artificial intelligence must be used to create sustainable cities and achieve green urbanization, stressing that rationalizing water use results in economic energy that benefits the state in progress and growth, pointing to the positive results of the company’s adoption of green building standards in its projects, in terms of increasing the state’s proceeds from real estate export. Foreign customers represent 82% of the company’s sales, which indicates their confidence and appetite for sustainable green projects.
Taher says: “The development of fourth generation cities is the most important national project in Egypt. Despite the increase in the construction costs of sustainable projects by 5-10% compared to ordinary construction, fourth generation cities would attract investments.”
Khozam maintains: “It is necessary to put achieving sustainability of buildings on top of the priorities of real estate developers to meet the demands of the market, reduce emissions, and rationalize energy consumption. Next years are expected to witness a breakthrough in the construction of smart cities.”
In the same vein, Galal notes: “The success of the state in the introduction of the concept of fourth generation cities can be ascribed to the strength of the legislative system. The application of sustainability in smart cities is not as costly as some might think.”
For his part, Nasr remarks: “Smart cities and sustainability are inseparable concepts. Joining forces is necessary for the mitigation of environmental risks. Implementation of sustainability will cut energy consumption by 37%.”
Hamouda affirms: “Sustainability is not a luxury, for investment in green urbanization is a strategic decision. I call for setting clear rules to organize the relationship between the real estate investment and environmental risks, and increase green spaces in cities.”
As for Al Taher, he reiterates: “It is necessary to raise awareness of the importance of sustainability, as well as offering facilities by all ministries to achieve it in fourth generation cities.”
Boulos also says: “Sustainability aims to create a better life, improve infrastructure, and enlarge green spaces. I hope that all necessary measures will be applied to reduce carbon emissions.”
However, Fahmi explains: “The industry of construction technology has a limited role in Egypt. The government should decrease the prices of land and building material, and enable the manufacturing of imported products [required for construction]. In that way, the project would be executable.”
Sami highlights: “The world seeks to achieve the zero-emission goal. Therefore, the private sector and the government must join forces and move faster. The state is planning to increase the percentage of household consumption of renewable energy to 42% and cut carbon emissions.” While, Zayed says: “The government support through legislations will incentivize developers to invest more in fourth generation cities.”
Khattab notes: “Old cities should be transformed into sustainable cities to cut energy and water consumption. It is important to grant technical certificates, such as LEED, to sustainable cities.”
The second session, titled “Challenges”, focused on obstacles facing the implementation of the timetable for new cities, such as the government’s move to the NAC, the repercussions of global economic crises (inflation/Ukrainian crisis) on new cities, and the most prominent problems facing investors in the new cities, including conditions and prices. Speakers discussed the facilities attracting local, Arab, and foreign investors, in addition to the prominent proposed amendments to the provisions of the immediate allocation mechanism of land in new cities.
Rizk notes: “The result of the current urban development movement in Egypt will be seen in the coming years until 2050. It is crucial to educate people about the significance of sustainability and mitigation of the risks to the environment.”
Taher adds: “Researches prove that around 1 billion people will be depopulated in 2050 due to carbon emissions and rise of water levels, which urges us to build sustainable green cities.”
Galal says: “Traditional buildings could achieve the sustainable development we are looking for through paints, floorings, and heights. Egypt is able to apply sustainability requirements through some simple affordable elements, without resorting to international expertise.”
In addition, Nasr stresses: “The housing ministry should study providing developers with real incentives to build smart urban projects that achieve sustainability, with regard to raw material required to meet the requirements of smart buildings and establishment of factories that contribute to the availability of relevant technology locally.”
Hamouda: “I call on the housing ministry to expand in green urbanization and increase green spaces to cut carbon emissions that are harmful to human health, in addition to setting new rules for the protection of bodies of water at the North Coast.”
Further, Al Taher says: “It is a must to expand in building smart cities that rationalize energy consumption and fully achieve thermal insulation. Green spaces in Down Town district account only for 1% which increases levels of pollution.”
Boulos reveals: “The state spent huge amounts to build and expand strong road network and utilities. New cities are a model that doesn’t exist in any country in the world, but it is a big and ambitious step representing a great challenge.”
Similarly, Fahmy comments: “The development of the Down Town district and old cities is necessary. It is also important to find a local substitute for building materials in Egypt.”
Sami explains: “The top challenge facing actualization of sustainability is the shortage in resources and higher costs of building material.”
Zayed notes: “Digital transformation is crucial in all phases of the project. The actual cost of sustainability is very low compared to its benefits.”
Finally, Khattab remarks: “The implantation of sustainability needs incentives from the state, like acceleration of the licensing process for sustainable development projects.”
This roundtable was sponsored by PARAGON Developments, Nile Developments, IL Cazar Developments, Misr Real Estate Assets Management, and Gates Development.
Media partners were: Aleqaria, Al Borsa News, Daily News Egypt, Osoul Misr Magazine, Bloom Gate, El Gedaan Real Estate, and Masrawy.