Invest-Gate’s first virtual roundtable dug deep trenches into the Egyptian property scene amid the COVID-19 outbreak, tapping the knowledge and experience of local real estate gurus and creating a blueprint of smart solutions fit for real estate recovery and a future beyond the current crisis.
Held on May 17, under the title “Smart Real Estate Market Amid COVID-19,” the first-of-its-kind event was moderated by Mena Group Founder Eng. Fathallah Fawzy and co-moderated by Invest-Gate’s Managing Partner Eng. Mohamed Fouad. The one-hour roundtable witnessed the participation of Deputy Minister of Housing, Utilities, and Urban Communities for National Projects Khaled Abbas.
Speaking of the current downturn, Abbas emphasizes close collaboration between real estate developers, along with the housing ministry, in building probable recovery scenarios and discussing the winning strategies to maintain a healthy property market, namely through leveraging technology and smart solutions in responding to crisis times.
“Digital transformation became a reality in the time of Coronavirus and the Ministry of Housing endeavors to join forces with local real estate developers to seamlessly adapt to these sudden changes in customer experience and satisfaction,” the official elaborates.
Other participating leaders include Rooya Group Chairman and CEO Eng. Hisham Shoukri, Iwan Developments CEO Eng. Waleed Mokhtar, Mountain View Chairman Eng. Amr Soliman, Tatweer Misr President and CEO Dr. Ahmed Shalaby, Tabarak Developments CEO Mr. Ali El-Shorbany, and Lotus Management Chairman and CEO Mr. Amr M. Aboualam.
For starters, market gurus agree that the Coronavirus crisis accelerated efforts to digitize their businesses. According to Shalaby, digital marketing and virtual sales have proven to be essential ingredients for maintaining demand amidst the uncertainties. He explains that the most recent past period saw an increasing number of online campaigns released by local real estate developers to boost virtual sales and efficiently market their projects to end-users, with deals sealed remotely via bank transfers or cheques.
“For the Ministry of Housing, Beit Al Watan is an on-ground application of the online reservation and virtual sales concept. After six years of implementation through a trial-error process, the New Urban Communities Authority (NUCA) came up with a fine-tuned system to successfully sell housing units to Egyptians abroad and efficiently run the first-of-its-kind program,” Abbas continues.
Similarly, Lotus Management’s Aboualam elucidates that the demand for virtual real estate services (i.e. augmented reality (AR), 360° virtual panoramic tours, etc.) is forcefully surging in Egypt more than ever before, though it has been the new standard to boost return on investment (ROI) in various regional and international countries for a couple of years now. The integration of AR and virtual reality (VR) in practice can help realtors tell a more compelling visual narrative about what a property can become, hence speed up the closing process and fine-tune the number of clients.
Aboualam stresses, “This should also push through the emergence of escrow accounts, blockchain technologies, and other smart real estate solutions … Egypt holds the capabilities and infrastructure needed to launch such services, but it requires the willingness and knowledge of developers to handle such technologies.”
This comes in tandem with engaging employees in remote work, with an upward trend of work-from-home flexibility. Accordingly, real estate companies felt motivated to invest in technology and smart ways to enhance and pioneer the alternative workplace (AW). The many advantages of having a remote workforce include the significant reduction of real estate needs (or offices) as only a handful of vital staffers will be required on-site, alongside slashing costs related to operating an office space, hence generating profits and securing revenue streams with fewer costs, says Shoukri.
However, Mountain View’s Soliman notes that harmonization represents an important pillar for the application of digital real estate technologies. He points out that such technologies and smart solutions should be adopted in a way that achieves and sustains harmony between business and information technology (IT).
As for the building site warriors, Abbas reckoned that the cooperation with contracting companies, which are currently executing an array of ongoing private projects in new cities, should be on top of the agenda. He asserts that contractors currently play an important role in the real estate sector by setting labor activity at job sites, including precautionary measures taken to avoid the virus’ spread and this is an important factor for consideration at the moment.
Soliman reveals that Mountain View, together with the help of the former director of the Egyptian chemical-weapon warfare program, had worked on a protocol for occupational safety and health, which was sent to the government as a model for all concerned bodies, in an attempt to provide ultimate protection in workplaces and construction sites. Besides, office boys were trained on the proper use of the COVID-19 safety and precautionary measures, working their way up to safety officers, the chairman elaborates.
Tatweer Misr also completed 70-80% of construction works at projects’ sites, continuing to work under new safety guidelines and precautionary measures to guard against Coronavirus, Shalaby pinpoints, calling on other real estate companies to follow suit. “This translates into additional costs on the developers’ shoulders, but it will definitely lead to the best results in terms of adhering to the implementation plans and timelines,” he states.
When asked about Egypt’s business climate after the storm passes, Tabarak Developments’ CEO indicates, “Coronavirus is game-changing for Egypt’s real estate map. For instance, demand for administrative and office spaces will take a hit as working from home becomes new normal.”
“As the Egyptian property sector grapples with virus fallouts, construction materials demonstrated the greatest level of resilience during this challenging time, with no absolute changes in value. Therefore, real estate prices are expected to remain stable in the short term, despite the change in demand,” El-Shorbany uncovers.
Iwan Developments’ Mokhtar believes that the COVID-19 health emergency clearly identified the inadequacy of medical components within residential communities, which was also one of the obstacles to real estate export. “With this in mind, Egypt’s property industry is set to witness an unprecedented boom in medical developments and hospitals in the near future,” he affirms.
“As Egypt’s property sector modifies to approach digital transformation needs, the current conditions will open up new horizons of marketing strategies that will respond to changes in customer perceptions and demand, while also defining a whole new raft of real estate products that address such adjustments,” the CEO elaborates.
Interestingly, Shoukri sees a new wave of e-commerce transformation across Egypt, which will drive the emergence of new trends in the local retail market. In fact, shopping malls and commercial centers will have to evolve to increase the leisure component, alongside the incorporation of new technologies to connect with a digitally savvy consumer.
Sharing the same sentiment, Shalaby highlights the e-commerce boom will certainly bring on higher demand for warehouses and logistic projects, providing that these will be products of interest to real estate developers and investors alike.
For now, the current slowdown can be useful to study and adapt to the new market conditions. Real estate developers need to revisit the components of current residences and get creative with space-efficient solutions for space-challenged residential units. Coronavirus made consumers comprehend the need to take full advantage of areas, thereby demanding much functional, yet spacious, properties.
Furthermore, property developers and investors will be particularly zealous in investing in areas other than Cairo, especially in Upper Egypt and the Nile Delta, as part of their diversified asset portfolios which should remain healthy despite uncertainties. All in all, El-Shorbany justifies that the government’s role in the real estate market is unequivocal now more than ever for riding out the storm.
The first-of-its-kind event was being sponsored by Mountain View, Rooya Group, Iwan Developments, Tabarak Developments, and City Edge Developments, alongside Economy Plus as a media partner, working closely with Invest-Gate to develop solutions to the COVID-19 challenges and answer questions of all concerned with the local real estate industry.