As part of its strategy for regional expansion, Tatweer Misr takes its first steps in the Saudi real estate market.

Tatweer Misr has ambitious plans to expand in regional markets to replicate its distinguished experience in urban development in Egypt. Therefore, the company entered into a strategic partnership contract with Naif Alrajhi Investment, a Saudi firm working in the fields of real estate, financial markets, partnerships, and acquisitions. Under the partnership, the two companies will establish a construction and real estate joint venture to develop integrated urban projects and tourist resorts with international standards in the kingdom.

Tatweer Misr decided to commence operations in Saudi Arabia to take advantage of the kingdom’s current economic and urban boom, in addition to the various incentives provided in the Saudi real estate market. With this partnership, Tatweer Misr will be able to achieve one of its key strategic goals; regional expansion and maximizing returns for its investors, customers, and partners.

In this context, Invest-Gate interviewed Dr. Ahmed Shalaby, President & CEO of Tatweer Misr & Chairman of Egyptian Real Estate Council, and Youssef Al-Luhaidan, Vice Chairman – Real Estate – at Naif Alrajhi Investment, to disclose more details about this huge partnership and its significance to both parties, keeping an eye on their expansion plans in the context of the objectives of the Saudi Vision 2030.

In your opinion, what are the capabilities of the Saudi real estate market?

The real estate market in the kingdom is very promising. It has a very ambitious plan for urban development. Among the goals of Vision 2030 is the construction of 1.5 million housing units, with a 70% ownership rate.

In light of these goals and the existence of a complete system for real estate development, the real estate developer can determine its needs. The Saudi real estate market is highly qualified to achieve huge growth in the coming period.

This is a great opportunity for Tatweer Misr, which has huge experience and added value in the Egyptian market, to also have added value in the Saudi real estate market, through our partnership with Naif Alrajhi Investment.

Will this be the first and only agreement for Tatweer Misr with the Saudi partner, or will there be expansions in other areas in the kingdom?

In the last period, we were looking for the right partner, and we found this partner to be Naif Alrajhi Investment. Thus, we decided to make them our exclusive partner in Saudi Arabia. Our goal is not only to develop a joint venture with Naif Alrajhi Investment but also to establish a giant entity in partnership with them. Our starting point will be Saudi Arabia, followed by Egypt, and then the whole world. These are big steps because we are talking about a world-class giant developer that will not only operate in Egypt and Saudi Arabia, and we have all the potential to achieve this.

Does Naif Alrajhi Investment have a plan to expand into other tourist areas in the kingdom?

Certainly, we aim to be an integrated strategic partnership for real estate development not only in the kingdom, but the whole world, and we will expand into tourism, residential, commercial, administrative, hotel, and educational projects.

What is the value of Saudi investment in Egypt?

The Egyptian market is very attractive and will remain attractive despite all the current economic challenges because the Egyptian market has all the basic elements. It offers great incentives, especially for foreign investors, and it has opportunities in all activities. I expect that billions of riyals will be pumped into the Egyptian market during the coming period, because the return on investment (ROI) in Egypt is unprecedented, according to the testimony of all investors, whether from Saudi Arabia or the UAE.

I believe that the urban development plans in Egypt and Saudi Arabia are the poles of urban development in the whole world, not just the Middle East. The largest volume of construction takes place in Saudi Arabia and Egypt, as they have a great ability to attract foreign investments and exchange experiences between them.

Does Naif Alrajhi Investment expect to transfer its investments to Dubai, and what is the value of your investments in Egypt during the coming period?

About 90% of our real estate investments are currently in the kingdom. Concerning the Egyptian market, it is under study, but all our focus during the current period is on the Saudi market.

What is the form of the partnership between Tatweer Misr and Naif Alrajhi Investment, and what is the amount of money allocated for this partnership?

There are several projects under study for the partnership between the two parties. Naif Alrajhi Investment contributes to more than one fund. It is a group that specializes in funds and capital management. Therefore, this partnership will be one of the tools of these funds to invest capital. All our interest is not in investment figures, but in studying various projects, coordination to achieve integration between us, and exchange of different experiences. In the coming period, there will be an announcement of more than one project as a result of this partnership.

Can you give a brief about Naif Alrajhi Investment? What type of partnership do you have with them, and what are the upcoming joint projects that you plan to work together on in Egypt?

We certainly have an idea of entering the Egyptian market, through a partnership with Tatweer Misr. Naif Alrajhi Investment has huge experience in various investment fields through more than 40 companies in 13 different sectors operating in six countries. The group’s portfolio includes many projects in the fields of real estate, architecture, engineering, facilities management, hospitality, and entertainment, among others.

Naif Alrajhi Investment started its real estate portfolio in 2003 in Dubai, after which the portfolio grew, and we have many projects and various investments in residential, tourism, commercial sectors, and more.

Please tell us about Tatweer Misr and its achievements during the last period.

Tatweer Misr is an Egyptian joint stock company, which started in 2014. During the last period, six projects were developed in different places in Egypt; East Cairo, Mostakbal City, West Cairo, the North Coast, and Ain Sokhna, with a total land area of 7.4 mn sqm, and a total number of units up to 34,000 units. More than 13,500 units have been sold, and our total sales volume exceeds EGP 42 bn.

Besides, over 2,700 units have been delivered, and by the end of 2023, about 4,500 units will be delivered as well. Furthermore, two projects will be operational with all services, in addition to two other projects during the current year.

Moreover, we have achieved unprecedented sales that exceeded EGP 9 bn in 2023. This year translates our efforts exerted in all previous years. During the coming period, we will announce the educational and administrative activities that we will carry out.

Why did you choose Tatweer Misr? And what does it add to the Naif Alrajhi Investment?

As a result of the development and the great leap that Tatweer Misr achieved over nine years, we were excited to enter into a complementary partnership with it. We are looking for investments and distinguished partners. The goal of this partnership is not only real estate development in Saudi Arabia, which will be the launchpad for more projects in other regions. The two companies have the competence, capabilities, and experience that qualify them to become a successful global model.

Why was Naif Alrajhi Investment chosen to invest in Saudi Arabia?

The success achieved by Tatweer Misr over the previous years was the result of selecting the right partners, including consultants and contractors. Major entities are built by partnerships, and Alrajhi shares the same values. In addition, they always seek to form successful and handpicked partnerships. Alrajhi follows a set of values with high-quality personnel and creative teams, which comes in line with Tatweer Misr’s vision.

What will Tatweer Misr present to the Saudi market?

The Saudi real estate market is different from the Egyptian one. In Egypt, around 70% of our sales are for individual investments, unlike the Saudi market where a customer buys for housing purposes, not just for investment. This is a very significant and fundamental difference in the customer types.

Furthermore, there is higher demand by the Saudi market for projects providing a quality of a different lifestyle. The Saudi market focused in the past on housing only, but now it needs housing, services, and recreational activities that were implemented in Egypt. We have succeeded in providing added value to the Egyptian real estate market. We will succeed in providing added value to the Saudi real estate market as well, through integrated mixed-use projects.

What are the incentives offered by Saudi Arabia to support investment in the kingdom?

There is great government support for Saudi companies by the Ministry of Finance, Housing, and the Tourism Fund. Now, the Ministry of Housing offers subsidized projects in Riyadh to buyers, which encourages developers to launch more projects because it is the guarantor of the buyer, as well as support for tourism projects by the Tourism Fund.