Invest-Gate launches its last roundtable for 2021, focusing on the future of commercial, administrative, and industrial real estate in Egypt under the title “Going Commercial…The Future of Egypt’s Real Estate Market” on December 8 at the Nile Ritz Carlton, Invest-Gate reports.
The roundtable platinum sponsor is Cairo Festival City (CFC) by Al Futtaim Group Real Estate and the silver sponsor is Coldwell Banker Commercial Advantage. The roundtable, in cooperation with the Egyptian Businessmen Association (EBA), focuses on providing and effective strategy for all operating the Egypt’s real estate sector. It also sheds light on the means of meeting the increasing demand on commercial, industrial, administrative, retail, and logistic real estate, in addition to the importance of attracting more local and foreign investments.
Invest-Gate’s roundtable hosts prominent experts and decision makers in the Egyptian real estate sector. The discussion was moderated by Eng. Fathallah Fawzi, head of Construction Committee at the Egyptian Businessmen Association (EBA), in cooperation Eng. Hisham Shoukry, chairman of Rooya for Real Estate Investment, Eng. Ashraf Ezz, managing director of Al Futtaim Group Real Estate, Dr. Sherif Hassan, CEO of Coldwell Banker Commercial Advantage, Eng. Sameh Attia, managing director of Oriental Industries Projects, Eng. Al-Moataz Bahaa El-Din, CEO of CPC Industrial Development, Eng. Hisham Moussa, managing director of Redcon for Offices and Commercial Centers (ROCC), Mr. Edrees Mohamed, founder & CCO of Akam Development, Eng. Basheer Mostafa, CEO of First Group Developments, Eng. Mohamed Taher, chairman of Nile Developments, Eng. Bassel Shoirah, deputy general manager at Polaris International for Industrial Parks (PIIP), Mr. Nehad Adel, CEO of KVRD, and Mr. Ayman Sami, country head of JLL.
The roundtable’s first session “Industrial Real Estate” discusses the increased demand on industrial real estate, as speakers affirm the importance of the participation of the private sector in industrial development, which, in turn, would help in enhancing Egypt’s economy, especially when it comes to attracting more local and foreign investments. They also stress on the importance of creating more legislations to guarantee the rights of small developers.
Fathallah Fawzi, head of Construction Committee at the Egyptian Businessmen Association (EBA), states that Egypt’s Vision 2030 aims at achieving USD 100bn exports annually, stressing the importance of real estate developers’ role in industrial development besides their running projects.
For his part, Ashraf Ezz, managing director of Al Futtaim Group Real Estate, confirms, “The development system in Egypt has to be comprehensive, so that real estate development takes place in parallel with industrial development, to achieve the state’s plan to launch integrated urban cities.” He also stresses on the importance of the participation of the private sector in industrial development, noting that such a step is not that easy like other real estate projects. Ezz notes that administrative project reached 1.7 mn sqm, and it expected to cover an area of 4.5 mn sqm by 2025.
In the same vein, Hisham Shoukry, chairman of Rooya for Real Estate Investment, points out that industrial development will offer more job opportunities, in addition to raising the demand on other real estate projects, whether residential, commercial, or administrative. He also calls the government to offer industrial lands with various systems, in addition to introducing the “usufruct system”. Shoukry elaborates, “The state has to be a partner to industrial developers and create an attractive environment for foreign investment.”
As regards industrial developers, Al-Moataz Bahaa El-Din, CEO of CPC Industrial Development, states, “Industrial developers’ role completes the state’s vision in a more professional way, in addition to offering after developing services and fastening the implementation process. Over the past few years, up to 14mn sqm have been implemented in three cities.”
Similarly, Sherif Hassan, CEO of Coldwell Banker Commercial Advantage, agrees that industrial development is the base for developing other real estate products, noting that the ongoing infrastructure upgrade will boost the state’s position to be a hub for industrial development, achieving Egypt’s Vision 2030.
“It is important to have an integrated system, offering residential and commercial real estate before starting with industrial development. The state has to overcome all obstacles to start the industrial activity such as issuing licenses for developers,” Sameh Attia, managing director of Oriental Industries Projects, stresses.
Additionally, Edrees Mohamed, founder & CCO of Akam Development, explains the importance of promoting industrial development such as real estate development and solving small industrial developers’ problems due to the strong competitive environment. Mohamed affirms that activities of 70% of these small developers are not noticeable.
Bassel Shoirah, deputy general manager at Polaris International for Industrial Parks (PIIP), shares the same opinion, affirming that implementing industrial development is easier in Egypt when compared to real estate development, as there is a difficulty in marketing industrial development due to the strong competence from other countries, calling the government to stop supporting subsidizing land prices to avoid manipulations by real estate brokers.
Commenting on industrial development, Mohamed Taher, chairman of Nile Developments, says that industrial development did not achieve the awaited success in attracting foreign investments over the past few years. Taher points out that the state should give more support to the industrial sector through subsidizing land, energy and taxes to motivate investors to invest in this sector.
As for Hisham Moussa, managing director of Redcon for Offices and Commercial Centers (ROCC), confirms that the industrial sector represents around 18% of Egypt’s GDP with operations of 30% of the total workforce. Accordingly, the state has to give special focus to industrial development, as Egypt’s location qualifies it to be an industrial center in Africa.
Furthermore, Basheer Mostafa, CEO of First Group Developments, points out, “The government has to focus on industrial development and formulate a legislative package with all necessary elements that serve the industrial developer, who will be a main source for GDP, achieve a complete industrial and urban renaissance.”
“The industrial development is enjoying a high demand at the moment. The market will also witness more demand on mixed-use real estate,” Nehad Adel, CEO of KVRD, comments. Ayman Sami, country head of JLL, shares the same opinion, adding that logistic services are witnessing a huge demand in Egypt, but there is a shortage in meeting this demand. Sami asserted that the industrial sector is the engine of Egypt’s economy growth.
The second session, titled “Administrative, Retail, Logistics in Real Estate”, focuses on the current demand and preferred areas for customers to launch these products and how to meet these needs after the spread of the corona pandemic, considering the changing nature of the product whether it is a retail, administrative, or logistic services. The session also tackles the means of addressing the opportunities and challenges of investing in commercial real estate, in addition to attracting foreign investments to these real estate products.
In this regard, Ezz indicates that developers used to inject more investments in residential products, but a large number for commercial and administrative projects are being implemented nowadays to meeting the increasing demand. He also calls on reconsidering services of 12% of residential projects.
At his side, Shoukry says, “The concept real estate development has changed a lot to comprise residential, commercial, administrative, and industrial real estate. The implantation rate of administrative, commercial, medical, and educational projects in Egypt is too low when compared to other countries. Such a problem could be solved through real estate funds that are considered the real gate for exporting real estate.”
Commenting on the logistic services sector, Bahaa El-Din expresses that this sector will witness a high demand in the future of the Egyptian market, which requires the government to seize this opportunity, affirming that there must be industrial companies handling the implementation of logistic zones inside Egypt to become an export hub for the MENA region.
However, Mohamed praises the state’s efforts in establishing fourth generation cities, which will benefit Egypt’s real estate market, noting that the government has to set specific requirements for administrative and commercial units.
Regarding the spread of the COVID-19, Hassan states that Egypt’s the real estate market has succeeded in overcoming the COVID-19 pandemic crisis on the administrative and commercial sector, adding that international brands must be attracted to the market to meet the increasing demand for this quality of real estate products. Mostafa also agrees that the COVID-19 pandemic did not affect the administrative sector strongly with regard to the purchasing desire, noting that small units are witnessing a higher demand.
Addressing investments in the commercial and administrative sector, Moussa says that east Cairo is witnessing high demand in the administrative and commercial sector, especially with the anticipated opening of NAC. He also reveals that return from investments in both sectors exceeded the residential sector.
In the same manner, Taher confirms that the administrative investment will achieve double the investments in residential over the past five years. Meanwhile, Adel reveals that the non-residential sector has witnessed an unprecedented popularity, recently, both the commercial and administrative sectors.
As for Shoirah, he states that the Egypt’s real estate market is witnessing an escalation in the demand for the commercial units, stressing the importance of establishing companies specialized in feasibility studies.
Sami concludes that developers have to reconsider the offering of commercial units according to specific criteria, noting that there is a gap between the demand for the educational and health sector and the current supply.
By the end of the session, all developers affirm that there is a huge demand on commercial, administrative and logistic services in Egypt, which requires the government and real estate companies to offer more products to meet the needs of the customers. This, in turn, will affect the Egyptian economy positively in terms of attracting local investments, in addition to attracting international brands to pump more investments in Egypt.