Serviced Apartments: Win-Win Deal for Residents, Stakeholders, Investors

Serviced Apartments: Win-Win Deal for Residents, Stakeholders, Investors

An Experience Worth Your Try 

 A serviced apartment is different from your typical hotel room. It is an accommodation, fully furnished with home-like facilities, and perfectly provided with a number of services you dig for at the best hotels. Serviced apartment is the perfect home away from home.

You get access to a complete package including a bedroom (or bedrooms depending on its size), fully equipped kitchen, living room, bathroom or ensuite facilities, and parking facilities. Some units also incorporate a desk or dedicated study space, making them the best accommodation for business trips. All these home and hotel-like facilities needn’t cost a mountain of cash either. Renting a serviced apartment is really affordable, whether you are staying for short or long term.

A Potential Profit still in Need to be Explored 

While the idea of mixing residential units with all hotel facilities has recently gained popularity, especially that it can simply be owned or hired, Invest-Gate delves deeper into this kind of real estate that encompasses a built-in hotel and touch on its potentials to attract investors and achieve returns.

“When I have undertaken in building my Nonsuch service apartments compound at El Gouna in 2017, only a few knew about it. Since then, serviced apartments have timidly felt their steps in some spots across Egypt,” Omar El Banna, CEO of B.I.D Properties tells Invest-Gate.

Owners best scenario is giving the operational hotel, in this case, the lease management of their units to ensure the same community features, and to maintain the investments of the owners. “If each apartment’s owner offered his unit for rent by himself, the price would be variant and the whole project investments will be negatively affected,”El Banna clarifies.

The residential units are well-furnished with as many facilities as the hotel; the customer would find every tiny detail he looks for such as interior, designs, air conditioner, towels, bed sheets, and daily to weekly room service. Although such an investment is highly profitable for the country and a source for foreign currency, it is not cemented by official stakeholders.

An investment Stuck With Red Tape

“It is a fatherless activity, neither the Ministry of Tourism nor the Ministry of Housing, Utilities and Urban Communities is focusing on,” Alaa Fekry, CEO of Beta Egypt for Constructional Development, points out, categorizing such a project as a problem due to different categories set by both ministries to grant  the license whether as a touristic project or a residential one. 

“In Egypt, it is not easily applied. The whole procedural process may last for years and is very complicated,” hints Fekry.

Investing in these units is the leading concept behind that kind of touristic real estate as it targets renting the apartment throughout the year instead of letting it unexploited. In this regard, Ayman Samy, CEO of JLL company for construction consultation, says, “It is a leading trend in the new mega cities like the New Administrative Capital (NAC); notwithstanding the experience of both customer and investor is not prevailing.”

However, it is rare in Egypt, as the first appearance of this idea was in El Gouna at the Red Sea. “You would always see either pure residential units, or touristic ones. El Gouna is the only spot in Egypt that has maintained the percentage of 1:1. That is to say each room in its hotels has a serviced apartment counterpart,” El Banna points out.

Investors and developers are calling on the country to maintain and adopt this momentum, which injects job opportunities,   pumps foreign currency into the national income, and proliferates the number of touristic real estate units. “This should be under the country’s custody rather than being a victim to the realtors.”

Real Estate Exportation 

In tandem with mentioning service apartments, comes the notion of “real estate exportation”. This notion correlates with the flows of tourists through Egypt. “The whole process of the unite ownership transfer takes years in Egypt. Meanwhile, it takes only half an hour in Lebanon,” Fekry criticizes.

On the other hand, Samy argued, “In Egypt, the majority of real estate exportation is dealing with apartments only; however worldwide, it is related much more with investing in the locomotive real estate funds.” Those funds undertake the process of purchasing, building, renting the real estate unites with high revenue and have easy going money transfer.

Thus, those funds are to solicit clients to invest money in residential units. “Those funds are such as insurance companies that invest their money in real estate, and I think that NAC is going that way,” Samy clarifies. 

“Exporting real estate in Egypt entails an adequate lifestyle that suits foreigners to feel as if they are at homelands, and this step is what Egypt is currently taking through its new mega cities,” he adds.



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