By Shaimaa Ghanem
Now who wouldn’t seek every opportunity to market their real estate projects abroad to generate more revenue in foreign currencies, attract foreign homebuyers, and hence export real estate?
The launch of the state economic reform program impacted the Egyptian real estate market, leading to unprecedented increases in development costs of projects, and consequently a rise in the prices of real estate units and a decline in purchasing power of many Egyptians. Therefore, the government, represented in the Ministry of Housing, and real estate companies started to look for new markets to tap into to promote their real estate products and open external channels for sales.
Soon after, the government and major real estate companies have put foreign real estate exhibitions as a top priority tool to export real estate (i.e selling real estate property to foreigners and Egyptian expats in USD). Invest-Gate delves more into the benefits of participation in international exhibitions that are supported by the government.
Government – Private Sector Marketing Alliance
Both the government and the private sector head to GCC exhibitions for marketing for a number of reasons most importantly because Gulf residents- whether Arabs or Egyptian expats- are number one investors in the Egyptian real estate market. Of course the liberalization of the exchange rate is seen as a major attractive factor luring in foreign property investments.
The government aims to make use of international exhibitions to acquire a market share of real estate exports abroad. As an example, Egypt Property Show (EPS), held back in April 2018, has recorded property sales of USD 100 mn. There have been talks among many officials, forecasting full-year sales of USD 250 mn. Now that 2018 is coming to end, such expectations are still to be confirmed.
Furthermore, back in August 2018, the Ministry of Housing, Utilities and Urban Development has signed MoU with Informa Exhibitions, organizer of the real estate exhibition Cityscape Global. Egypt was then named “Country of Honor” with a special pavillion back in September.
Chairman of Emirates-based company Event Gate Sheikh Salem Al Kaabi adds that the government’s support for real estate export enhances chances of foreign exhibitions success, especially in Arab countries, due to the convergence of culture and language; in addition to the fact there is a large amount of Egyptian expats in these countries, who have a desire to buy Egyptian real estate.
Market activity and hard currency liquidity to the sector specifically and the economy in general are among the top benefits developers seek when participating in international exhibitions. Such belief is widely spread among developers, including Sorouh Developments Company Co-founder Ahmed El Tayebi.
Egypt’s pavilion at Cityscape Global included the Ministry of Housing, the New Urban Communities Authority (NUCA), among 18 other major companies from the private sector including Tatweer Misr and City Edge Developments, and Tabarak Developments.
“Cityscape Global offered a strong opportunity to promote real estate investment in a secure manner,” Ali Shorbani, Chairman of Tabarak Developments, says.
Ahmed Shalaby, CEO and managing director at Tatweer Misr, sees that the presence of an Egyptian pavilion at the Cityscape Global with the participation of the Housing Ministry is one of the most importantgains and serious steps towards the export of properties, adding that this is the step many developers have been awaiting for years.
Marketing Egypt’s properties under the umbrella of the ministry enhances confidence in real estate companies, Amr El Kady, CEO of City Edge Developments, agrees with Shalaby.
Cityscape Global is a prelude to a strong presence in many international events, thus pushing towards attracting heads of local and foreign funds, Shalaby expects.
In this regard, the ministry plans to participate in a number of other real estate exhibitions, notably Cityscape Jeddah and Cityscape Abu Dhabi in April, the International Property Show (IPS) in January 2019, Egypt Property Show in November 2018 and SMART Expo in Hong Kong in November 2019.
“At IPS, we will be supporting this growth by attracting a new wave of investment from buyers from across the globe,” according to Mahmoud Abd Al Haleem, Chairman of Makanak Real Estate Club (MREC), a strategic partner of IPS.
At Invest-Gate’s roundtable “Real Estate Tourism Development” held last month, Deputy Minister of Housing for National Projects Khaled Abbas confirms the ministry’s continuous updated incentives to boost the market’s real estate export. “The Egyptian real estate market is seen very promising to the foreign homebuyer,” he says. He adds, “when Egyptian real estate exports make 1% of sales, it is estimated to be approximately USD 5-6bn, which is equivalent to full year sales of the Suez Canal.”
Still, Hisham Shoukri, Rooya Group Chairman, sees that tourism and real estate export are two sides of one coin. “Exporting real estate is highly dependent on the tourism inflows,” he adds.
The private sector also plans to hold a number of events targeting the Arab and foreign investors to promote Egypt’s real estate and investment opportunities, and thus push the wheel of development.
El Kady believes that the coordinated participation between the government and the developers aims not only to sell properties but also to market the local real estate market and Egypt as an attractive destination for foreign clients.
Egyptian Real Estate Export Hits & Misses
At Invest-Gate’s roundtable, as well, El Kady suggests the establishment of an official entity, similar to the Egyptian Tourism Authority, to coordinate with all responsible authorities to boost and promote property exports overseas to promote national economy.
Abeer Essam, chairman of the Council of Arab Business Women (ABWOC), also proposes the establishment of a cornerstone council under the name of “Arab Women Real Estate Union Council,” which aims to promote the real estate sector in the Middle East.
Egypt should also be marketed as a destination in global marketing channels, such as airlines and international events, in accordance with professional marketing plans, as well as launching real estate exhibitions for non-Egyptians, accompanied by strong marketing campaigns for foreigners and not only for Egyptians residing in these countries.
At Invest-Gate’s roundtable, Shoukri requests the government to have a real estate marketing hub at New Alamein City so to promote the touristic destination and the projects within.
The Egyptian real estate market has experienced a big boom in recent years, thanks to the efforts of both the government and developers. Opening new and diversified investment opportunities, coupled with devaluation of local currency and issuance of new laws related to residency, make the Egyptian real estate attractive for foreigners.
“The Egyptian government opens new horizons for investment by establishing sophisticated new cities that are more in line with the needs of foreign buyers, especially in the New Administrative Capital and New Alamein,” according to Al Kaabi.
The new capital, which is due to open in mid2019, has brought a range of new investment opportunities in the city, according to Mahmoud Abd Al Haleem, chairman of MREC and strategic partner of International Property Show (IPS).
Thiqa For Real Estate Chairman Mohamed El Dahshory believes Egypt has all the qualifications and potentials that make it an international center for exporting real estate, especially that the country has the cheapest real estate market in the Arab and European region, in addition to other advantages such as scenic areas spread all over the country.
Shalaby points out that “the Egyptian real estate market is regarded as the most affordable, compared to others in the region, giving us a more competitive advantage to expand.”
As for future prospects, Al Haleem notes “Egypt’s property market is expected to rise strongly in value over the coming years, with construction booming to meet the growing demand.”
The issuance of the law in early May 2017 to grant residency to foreigners for five years or one year in return for buying property with value of USD 400,000 or USD 100,000 respectively also offered new investment opportunities for both Arab and foreign countries. El Kady stresses that the residence is a key step to put Egypt on the international property map.
“Egyptian real estate market is very promising and can compete globally,’ El Dahshory notes, adding that “opening new fields such as educational tourism and the construction of universities, academies, and international schools will attract students of these universities and the whole world to live in Egypt.”
“Moreover, the government should pay attention to medical tourism to raise the quality of hospitals and doctors, as well as, make the country a global headquarters for medical science,” he adds.
“Studies show that British and Russian citizens, along with Arabian Gulf citizens, are the most interested in owning units in Egypt, which makes these countries fertile markets for this Egypt’s real estate export,” Shalaby elaborates. However, Shalaby sees that it is important to provide a real estate product that aligns with the requirements of this target group of customers.
Highlighting the Egyptian real estate market as a product at international exhibitions is a promising and significant progress for both private and public sectors, yet Egypt as a country with exceptional touristic destinations that meet demands of the foreign home buyer still needs a lot of marketing. There are many new markets to explore to be able to compete on the real estate investment world map.