the magazine cityscape august 2012

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INVESTING IN EGYPTRegaining political stability, the country on the Nile offers ample investment opportunities

FROM DUST TO DAWNTourist arrivals are increasing as Egypt repositions itself on the global tourism map

RETAIL ON THE RISE Strong market fundamentals make Egypt the region’s most promising retail opportunity

AUGUST 2012A Middle East perspective on global real estate

Discover

Hassan Allam

Properties’

unique luxury

communities

EGYPT SPECIALINVESTOR EDITION

In-depth real estate sector overviewHot investment opportunitiesInterior design, retail & more

Hyde Park Properties for Development is one of the leading real estate developers in Egypt. Existing in the Egyptian market for the last 10 years, the company succeeded in facing all challenges and overcoming obstacles of the real estate industry.

Hyde Park, a City in the Making

Park Avenue Shopping Mall

Attached VillaSeparate Villa

Actual Site photos:

Separate Villa

Separate Villas

Rivoli Apartments

The company’s main objective is to support the real estate sector and offer high-end housing units to meet the increasing demands of customers for luxurious accommodation. Located in New Cairo, approximately 40 km from the center of Cairo, Garden Heights embraces the largest private landscape park in Egypt, across 6 million sqm. The project’s offers; Hyde Park, Centre Ville and Park Avenue, will include more than 1,400 Villas, 28,700 apartments, 1,500 shops and the biggest public park area.

So far, Hyde Park is constructing 1365 villas, apartments and commercial units. The company is also ready to deliver about 800 units by the end of 2012. As described by Hyde Park’s CEO, Alaa Ayoub Hyde Park is designed to be the preferred destination for elite residential communities, global business parks, designer shopping arcades, world-class entertainment and recreation centres. Hyde Park offers a touch of Paris with fine living fondly-inspired by the 1920’s downtown Cairo.

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AUGUST 2012 I CITYSCAPE I 1

Hyde Park Properties for Development is one of the leading real estate developers in Egypt. Existing in the Egyptian market for the last 10 years, the company succeeded in facing all challenges and overcoming obstacles of the real estate industry.

Hyde Park, a City in the Making

Park Avenue Shopping Mall

Attached VillaSeparate Villa

Actual Site photos:

Separate Villa

Separate Villas

Rivoli Apartments

The company’s main objective is to support the real estate sector and offer high-end housing units to meet the increasing demands of customers for luxurious accommodation. Located in New Cairo, approximately 40 km from the center of Cairo, Garden Heights embraces the largest private landscape park in Egypt, across 6 million sqm. The project’s offers; Hyde Park, Centre Ville and Park Avenue, will include more than 1,400 Villas, 28,700 apartments, 1,500 shops and the biggest public park area.

So far, Hyde Park is constructing 1365 villas, apartments and commercial units. The company is also ready to deliver about 800 units by the end of 2012. As described by Hyde Park’s CEO, Alaa Ayoub Hyde Park is designed to be the preferred destination for elite residential communities, global business parks, designer shopping arcades, world-class entertainment and recreation centres. Hyde Park offers a touch of Paris with fine living fondly-inspired by the 1920’s downtown Cairo.

2 I CITYSCAPE I AUGUST 2012


Project Director Simon Cole Editor Anna Amin Design Davis Mathai Advertising Adam Fox

Contributors Anna Amin, Simon Cole, Rohan Marwaha

Although every effort is made to ensure the accuracy of information contained in this magazine is correct, Cityscape cannot be held responsible for any errors or inaccuracies contained within the publication. All information contained in the magazine is under copyright to Cityscape and cannot be reproduced or transmitted in any form without first obtaining written permission from the publisher.

Partnership Enquiries: Simon Cole Tel: +971 (0) 4407 2640 Email: [email protected] Enquiries: Adam Fox Tel: +971 (0) 4407 2801 Email: [email protected] Enquiries: Anna Amin Tel: +971 (0) 4408 2898 Email: [email protected]

Cityscape Media, Informa Exhibitions, P.O. Box 28943, Dubai, UAE

During the past 18 months, there

was hardly a day when international media did not report on news from Egypt. After the ousting of President Hosni Mubarak in February 2011, these reports revolved primarily around political turmoil, economic setbacks and street protests of thousands of young Egyptians who fought for

political change and improved living conditions in their country.News coverage that metaphorically describes the Arab Spring

as having turned into an Arab Winter fails to recognise two essential elements which are present in the minds and hearts of many citizens: optimism and hope. Although views over the country’s political direction and future remain divided, many Egyptians also regard the present as a chance, a chance to change.

This optimism is shared by both Egyptian real estate industry professionals and international investors alike. Just as any sector of the country’s economy, real estate suffered in the aftermath of the revolution as investor confidence was shaken and projects were placed on hold. Eighteen months on, the overall market sentiment is still marked by caution, however experts believe in Egypt’s strong market fundamentals and predict a bright future for the industry.

This special edition of the Cityscape magazine is dedicated to Egypt’s growing real estate market. Our mission is to bring further transparency to the local market and support long term growth for this important economic sector.

In this issue, we feature an overview of the current dynamics of the different real estate sectors in Egypt while highlighting their respective investment opportunities. With a large and extremely young population, a growing middle class and increasing consumer demand, retail has emerged without doubt as the country’s most promising sector. More quality retail space will

soon enter the market with the opening of Cairo Festival City mid next year and the Mall of Egypt, scheduled to open in 2014, both of which are expected to attract more international brands and retailers into the country.

Looking at the residential market, over the past few years there has been a shift of focus from accommodation in central Cairo to gated communities in the capital’s new satellite cities such as New Cairo and 6th of October City. Here, Egypt’s biggest developers are competing for recognition with massive mixed-use projects that are designed to form fully integrated communities with retail, medical, educational and entertainment facilities.

Last year’s revolution also brought the issue of a substantial lack of affordable housing to the foreground, as a response to which the Egyptian government has announced the construction of one million affordable homes over the next five years. We also look at the status of the current mortgage law in Egypt as access to home financing is seen as a crucial element in increasing the availability of housing for low to middle income earners.

In addition, we investigate how 2011 has affected tourism in the country and illustrate some of the major touristic developments currently underway in both the popular Red Sea region as well as on Egypt’s Mediterranean North Coast, an area which increasingly attracts attention from both local and international travellers.

Lastly, we feature a review of the inaugural and highly successful Cityscape Egypt 2012 exhibition, held in association with our partner Next Move in Cairo in February this year, which attracted over 10,000 participants. Looking at the year ahead, we are excited to host this event once again in February 2013 which will bring together regional and international investors, architects and designers, real estate developers, government authorities, key industry stakeholder and private individuals alike.

Anna Amin Editor

EDITOR’S LETTER


9 Editor’s letter

LATEST NEWS

REgionAl12 • Dubai property market turns the corner

13 • Abu Dhabi tenants choose quality • Qatari Diar builds leisure projects in oman

14 • Elaf group opens new hotels in KSA • Transparency up in lebanese market

15 • Drake & Skull win oman projects • Alpha1 Estates and Cotton & Company to share expertise in MEnA markets

16 • Saudi mortgage law to aid housing • UAE in top 5 countries for rental return

inTERnATionAl18 • Broadway Malyan’s new Brazilian city • Poland’s investment market looking positive

20 • Eurozone crisis impacts commercial property • Christchurch’s private property rents soar

22 • london going global since 1973

ASiA24 • Fast growth for Ahmedabad • Bangkok office rents up 5%

25 • luxury fashion dominates Singapore retail scene

EGYPT INSIGHT

26 investing in Egypt Showing healthy signs of recovery, the real estate market offers highly attractive long- term investment opportunities.

30 From dust to dawn Tourist arrivals to Egypt are increasing while the government is undertaking several steps to boost the tourism sector.

CONTENTS

34 north Coast With major large scale developments underway, Egypt’s Mediterranean coast is receiving increased interest from both Egyptians as well as international travellers.

38 A million homes are not enough Egypt currently faces a substantial shortage of affordable housing units. Government and developers are looking for solutions.

40 Home sweet home? Despite attempts to revise the current mortgage law, Egypt still has a long way to go before its home financing market can fully take off.

44 Return of foreign investors crucial In an effort to revive Egypt’s economy, the government is implementing several reforms to attract FDI into the country.

49 Rising from the desert On Cairo’s eastern outskirts, New Cairo is a planned urban settlement providing a new residence for the people and businesses of Egypt’s capital city.

52 6th of october & Sheikh Zayed City West of Cairo is a vibrant mix of different residential type compounds, businesses, universities and some of Egypt’s largest shopping malls.

54 Retail on the rise Strong market fundamentals coupled with the development of more quality retail space make Egypt one of the region’s most promising retail opportunities.

58 Citylight Alexandria Home to Alexandria’s largest mall, CityLight will be the first integrated urban development project of its kind in Egypt’s second largest city.

59 Revolution in Egypt’s home design scene The country’s first online furniture portal allows users to view the best the world of home design has to offer from the comfort of the couch.

EVENTS62 Cityscape Egypt 2012 A review of the inaugural event

63 Cityscape Egypt 2013 A preview to Egypt’s largest real estate investment and development event

REGULAR64 in the next edition A snapshot of our October edition’s editorial highlights

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REGIONAL NEWS

Quality residential developments in Dubai bounced back during Q2 2012 after a stable first quarter, with average rent increases

of 6% for apartments and 9% for villas, a recent report by UAE property management company Asteco shows. Sales prices recorded double-digit increases in three developments, with rises of 6-8% elsewhere, Asteco observed.

“After three years of declining rates and limited sales activity, the real estate market is on the way to recovery, with established quality communities showing increases in values and higher transaction volumes,” said Elaine Jones, CEO at Asteco.

Rental rates for apartments were relatively stable through Q1 with minor declines in low quality/ poorly managed buildings in certain areas. Towards the end of H1 2012 rates in established quality communities achieved average increases of 6%.

Apartments in Dubai Marina and Downtown Dubai were the most sought after witnessing a 10% increase, with a two-bedroom apartment fetching between AED 90,000 and AED 120,000 per annum.

“Tenants are relocating in search of value-for-money, one- and two-bedroom apartments as well as three- and four-bedroom villas are the preferred unit types. In terms of rates, quality well managed developments, will continue to set the pace,” commented Elaine Jones.

Leasing rates for villas followed a similar trend, stable throughout Q1 2012 with an average increase of 9% through the latter part of Q2 2012. Mirdiff showed the largest increase with rent for a three-bedroom house

increasing to AED 90,000 per annum, a 13% jump from Q1 2012. Double-digit (11%) growth was also recorded in Arabian Ranches, with a

three-bedroom villa now costing AED 140,000 per annum. On the sales front, prices for one-, two- and three-

bedroom apartments in Downtown Dubai, Dubai Marina, and Palm Jumeirah retained their popularity and

witnessed price increases of 9%, 8% and 8% respectively during H1 2012. Apartment prices

elsewhere in Dubai remained relatively stable, with apartments in JBR seeing a

3% increase. Sales price increases for villas were dominated by Arabian Ranches

(16% price increase), The Springs (14% price increase) and Jumeirah Islands (11% increase). For all other developments in the report, prices increased by 6% to 8% with the exception of Jumeirah Village where prices were stable. Prices per square metre now vary substantially highlighting the contrast in quality, facilities and infrastructure.

Villas on Palm Jumeirah are now the most expensive in Dubai at AED 17,200 per square metre, followed by Jumeirah Islands and the Meadows priced at AED 10,750 and AED 10,250 respectively. The lowest prices can be found in Jumeirah Village at AED 5,400 per square metre.

“Looking ahead to the 2012 year end, sales prices will continue to rise for quality developments, especially villas. The number of owner-occupiers rose steadily in line with improved financed options offered by banks, which we expect to continue. Further demand will also be evident from overseas buyers escaping economic woes in the Eurozone and political instability in other parts of the region,” said Elaine Jones.

It was a different picture for commercial space which, despite an increase in leasing enquiries in H1 2012 as the regional situation improved, creating renewed interest in Dubai as a hub for business, was hampered by oversupply and tenant-dictated contract terms. Rental rates declined 6% to 8% in areas such as Tecom, Bur Dubai and Business Bay. However, rates still vary between AED 2,370 per square metre per annum in DIFC and AED 430 per square metre per annum in Dubai Investment Park.

“In terms of commercial sales, 2012 started off with minimal transactions for small units although Asteco has seen some purchases from local and international firms that have been successful in Dubai in the medium term, and sales prices have remained relatively stable as more supply entered the market,” said Jones.

Some demand has been seen for 100 to 400 square metre units in Business Bay, JLT and DIFC but investment in the office market is likely to remain flat throughout H2 2012, according to Asteco. Average rates vary between AED 18,300 per square metre in DIFC to AED 5,400 per square metre in Dubai Silicon Oasis l

DUbAI RESIDENTIAL PRoPERTY mARkET TURNS THE CoRNER


REGIONAL NEWS

Tenants living in Abu Dhabi took full advantage of increased real estate market supply by upgrading from their existing accommodation

and maximising their housing allowances as better quality became more affordable through market supply and demand dynamics, according to the H1 2012 report from UAE property management company Asteco.

“A total of 7,400 apartments and 1,675 villas were added to the city’s rapidly expanding real estate sector in the first half of the year, triggering a wave of internal movement as existing residents sought to upgrade to better quality and value for money accommodation,” said Elaine Jones, CEO of Asteco.

Major new areas of supply include Marina Square and Raha Beach, with a combined 3,638 new homes and a number of landmark developments such as Rihan Heights also coming on stream. The flight to quality has led to clear segmentation, with older areas and buildings that previously commanded high rental rates and occupancies – such as the Tourist Club, Khalifa City A&B and Mussafah - falling out of favour, with rates dropping between 3% and 14% since Q1.

Demand for premium quality developments with mixed-use facilities also grew substantially, with a high level of leasing activity for top tier product including Etihad Towers, topping out at AED 150,000 for a one-bedroom apartment and St. Regis Residences achieving AED 261,000 for a three-bedroom unit. Pre-leasing activity for Nation Towers was also strong, showing high levels of interest for premium waterfront product. Rates for Nation Towers reached up to AED 100,000 for one bedroom and AED 300,000 for a three-bedroom loft unit.

“Tenants are willing to pay for high quality finishes and amenities and this particular trio of developments is representative of the new Abu Dhabi lifestyle, with waterfront living in a mixed-use setting, and the appeal of new community-focused developments,” said Jones.

Asteco expects the leasing market to remain extremely active in the second half of the year with demand being driven by continued internal movement filtering through to all sub-sectors of the residential market and leading to further rental adjustments as an additional 7,000 new apartments and 4,560 villas ready for release in the next six months l

NEW PRoPERTY SUPPLY TRIGGERS AbU DHAbI TENANTS’ fLIGHT To qUALITY

Qatari Diar, the property arm of Qatar’s sovereign wealth fund, last month signed a memorandum of understanding with Oman’s

Ministry of Tourism for the development of three world-class leisure destinations in the sultanate.

The memorandum, which outlines Qatari Diar’s investment in Oman’s tourism sector, aims to create three mixed-use developments throughout the sultanate. It also establishes a 70:30 partnership between Qatari Diar and the Ministry of Tourism on the three projects.

“We are extremely thrilled with the signing of this [memorandum], which signifies our commitment to investing in the tourism sector of Oman. It is an important country to us, and one full of promise,” said Eng Mohammed bin Ali al Hedfa, CEO of Qatari Diar Group.

The Ras Al Hadd development in the Sur district, which forms part of the latest agreement, will feature a five-star hotel and spa, residential villas,

apartments, souks, a marina and villa plots, while the second of the three developments will have a five-star luxury resort hotel and spa as well as residential villas and apartments.

The third project will bring to life a yacht club and marina, a sports academy, and three boutique hotels.

Oman’s Ministry of Tourism has launched several campaigns over the course of the year in an effort to boost travel within the country and to promote Oman as an exclusive luxury destination all-year round.

Qatari Diar is currently developing or planning 49 projects in 29 countries around the world and has a worldwide portfolio valued at over $39billion l

qATARI DIAR To bUILD 3 mIxED-USE LEISURE PRojECTS IN omAN


The Kingdom of Saudi Arabia’s accommodation and hospitality sector is reportedly witnessing significant

growth with occupancy rates already seeing a 130 per cent increase. Industry experts have revealed that the numbers are expected to rise as both the Hajj and Ummrah seasons are fast approaching. In addition, the sector’s vibrant growth can be widely attributed to the healthy competition posed by leading international hotels present in the Kingdom, who have all expressed readiness in welcoming tourists visiting the country, particularly those going on holy pilgrimage to Makkah and Madina. The expected influx of more tourists and visitors are complemented by the high numbers of confirmed bookings that were made through electronic services.

Aiming to meet the demand for more rooms, the Elaf Group of Companies, has revealed the opening of the ‘Al Bustan’ and the ‘Al Nakheel,’ the company’s two new hotels, consisting of a total of 279 rooms, located in Al Madina Al Munawara.

Ziyad Bin Mahfouz, President of Elaf Group of Companies, said: “The opening of these two new hotels could not have come at a better time as these new facilities are expected to help address the demand for more hotel rooms in Al Madina, especially now that the peak season for pilgrimage is fast approaching. In addition, the strategic locations of both the ‘Al Bustan’ and the ‘Al Nakheel,’ combined with their distinctive features and offerings, will help cater to the various needs of those visiting Al Madina. The launching of these new hotels also complements the government’s continuing initiative to promote tourism diversification and parallel development across all levels, including tourism for religious purposes ” l

REGIONAL NEWS

Lebanon’s real estate sector has registered more progress in terms of transparency than any other MENA country, the recently released

2012 Global Transparency Index report by Jones Lang LaSalle showed. According to the report, Lebanon scored 3.75, ranking 66th worldwide

and fifth regionally.The index, which is issued every two years, measures national real

estate transparency across the globe and is used to compare and contrast transparency conditions across markets.

In 2010, Lebanon had also ranked in the 66th place but was in 10th place among 15 regional markets included in the survey with a

score of 3.78.The report highlighted that Lebanon made the ninth

highest progress in the world, classifying it as ‘semi-transparent’ up from the ‘low-transparency’

category it had occupied in 2010.According to JLL, the Lebanese real estate

market has experienced a very strong run in the last few years, causing

massive increases in land value in Beirut.“As a result, the market is gaining more structure and attracting attention

from more institutional players,” the global real estate services firm said.The report said the Central Bank of Lebanon played an important role

in improving Lebanon’s ranking after it recognised the importance of the real estate sector to the overall economy by imposing more rigorous regulations on real estate lending.

“The newly formed Real Estate Association of Lebanon (REAL) is implementing other improvements in transparency by better regulating the previously chaotic brokerage industry,” the report said.

However, despite an improvement in transparency, Lebanon’s real estate sector remains challenged by political instability and tensions, which have racked Lebanon for the past 30 years, the report added.

Overall, “the pace of improvement in the Middle East and North Africa (MENA) has been slower than in other regions since 2010. Dubai remains the region’s most transparent market, but the most significant progress has been in Lebanon, where the market is gaining transparency and attracting more institutional players,” the report concluded l

LEbANESE REAL ESTATE mARkET SHoWS INCREASED TRANSPARENCY

ELAf GRoUP oPENS TWo NEW HoTELS IN kSA To ADDRESS HIGH DEmAND foR RoomS DURING PEAk PILGRImAGE SEASoN


REGIONAL NEWS

Drake & Scull International PJSC (DSI), a regional market leader in the integrated design, engineering and construction disciplines of Civil

Contracting, Mechanical, Electrical and Plumbing (MEP), Water and Power, Rail and Oil and Gas has been awarded in Oman a series of MEP Contracts across several sectors collectively worth AED 96 million.

Under the terms of the contracts, DSI will oversee the complete MEP works – including design, supply, installation, testing and commissioning.

In 2012, Oman has set forth significant plans to upgrade its housing and infrastructure over the next 10 years, turning it into the region’s most promising construction markets. The sultanate’s construction sector on the whole is expected to be worth USD 3.8 billion in 2012 and has the potential to grow to USD 5.4 billion by 2016. The industry shows particular potential in energy and utilities – two areas where DSI is currently expanding its presence at the international level.

“The future developments in Oman represent an ideal opportunity for DSI to use its proven engineering technologies and regional experience – particularly in the MEP and Water and Power domains – to help expedite the growth of Oman’s construction industry. Our latest set of contracts reflects our ability to serve multiple sectors and we are eyeing more ventures as Oman rolls out its development plans for the coming years,” said Khaldoun Tabari, CEO of Drake & Scull International.

Drake & Scull International has been fortifying its presence in key GCC markets while further extending its operational reach into Africa and Asia. DSI also plans to engage in more work for railway and oil and gas developments l

mULTIPLE PRojECT WINS foR DRAkE & SCULL IN omAN

Global real estate advisory firm Alpha1Estates International said last month, during the holy month of Ramadan, that it has signed a Memorandum of Understanding

(MoU) with leading US real estate advisory firm Cotton & Company to share expertise and experience in their respective markets.

Alpha1Estates was the first company to market Saudi Arabian real estate globally, launching the US $2 billion Abraj al-Bait project in Makkah – the largest building in the world.

“Alpha1Estates International and Cotton & Company have signed the MoU with the purpose of entering new and exciting markets as well as sharing their world-class experience and expertise to best serve their distinguished clients,” said Mr Malik Al-Alawi, Chairman of Alpha1Estates International.

The MoU was signed between Mr al-Alawi and Mr Stephann Cotton, Founder and President of Cotton & Company and Laurie Andrews, Chief Operating Officer.

The collaboration will allow the two companies to jointly share their vast expertise with clients in the rapidly maturing real estate markets of the Middle East, North Africa and South Asia region (MENASA) as well as allow for greater real estate investments between the MENASA region, represented by Alpha1Estates, and the Americas, where Cotton & Company predominates.

“With today’s technology, a global market has opened for real estate throughout the world,” said Stephann Cotton. “Digital marketing strategies provide innovative solutions for reaching the international sector, and we are on the forefront of utilising these new mediums to sell residential real estate.”

Alpha1Estates was recently recognised for its achievements in the real estate sector in the Middle East, with global television channel Al-Jazeera referring to it as a “globally-recognised brand”. In January this year, the company stated that new real estate, regulatory, immigration, business and finance legislation was required for the real estate sector in Saudi Arabia to reach its full potential. The Government of Saudi Arabia on July 2 announced it had approved a mortgage law in the Kingdom, one of the five key recommendations made by Alpha1Estates l

ALPHA1ESTATES SIGNS moU WITH CoTToN & ComPANY

Khaldoun Tabari, CEO Drake & Skull


REGIONAL NEWS

The recently announced introduction of the mortgage law in Saudi Arabia will improve the housing supply and social stability as well as

provide diversification of the banking sector, says global rating agency Fitch Ratings. However these benefits will not be instant because banks will approach the new market with caution.

Saudi Arabia will issue regulations and licenses for mortgages based on the Islamic lease financing model this month.

Mortgage demand is expected to be strong because a growing young population has faced rising rents over the last four years. This has led to a drop in living standards among the lower-income population. To date, mortgage lending is a mere 2% of GDP and home ownership is only 30% of the population.

The jump in demand to buy houses now that mortgages will be available may trigger house-price inflation. The rise in house prices will be tempered by planned property developments that will help meet demand. Tight regulation on mortgages as well as a cautious approach by the banks will also help to dampen price rises.

The government is already undertaking an extensive house building programme. Fitch expects private-sector property development to

increase now that there will be financing available for young Saudis. The government’s Real Estate Development Fund offers subsidised mortgages to purchasers of affordable housing.

What’s more, tight credit limits for personal loans by the Saudi Arabia Monetary Agency show the regulator is unlikely to allow a housing boom to get out of control. Rules for personal loans - including credit cards - cap total monthly payments at one-third of net monthly income. Loan maturities cannot exceed five years.

Most banks are also likely to be cautious in their approach to mortgages because it is unclear exactly how the foreclosure process will work. Furthermore, they are funded through short-term deposits, which limit the amount of long-term lending they will want to undertake. Nonetheless, some banks have already built up their presence in the housing loan market over the last 18 months.

The funding mismatch is not an immediate problem because short-term deposits tend to stay at banks for long periods. But banks are likely to search out longer term funding before building up large mortgage portfolios.

The new regulation allows for the development of a securitisation market, which could provide much of the financing - if it takes off. (Fitch Ratings) l

SAUDI moRTGAGE LAW WILL AID HoUSING, STAbILITY AND bANkS

Dubai luxury developer DAMAC Properties has welcomed a report by Global Property Guide which has revealed that the UAE is among the

top 5 countries in the MENA region in terms of rental yields. The study compared the rental yields of apartments, all about 120sqm in

size, across various countries. With gross rental yields of 6.89% per annum, the UAE ranks slightly behind Jordan, but is ahead of Egypt, Morocco and Lebanon.

“The UAE has higher rental returns than some of the most popular locations for property investment in the world. With yields at 6.89%, the UAE offers much higher rental returns than for example the UK and more than double the rental yield of Hong Kong” said Niall Mc Loughlin, Senior Vice President of DAMAC Properties.

Another important factor for investors to consider is the favorable tax environment in the UAE. Rental income is tax free, and there are no capital gains taxes levied on the sale of properties.

“The property market in the UAE is changing remarkably; three years ago it was dominated by investors pursuing capital growth, and now that prices have stabilised, it’s characterised by investors seeking continually high rental yields. While the returns aren’t as lucrative, they are still relatively high and most importantly they are consistent,” commented Mc Loughlin.

According to the research, Jordan offers the highest rental returns in the MENA region, with gross yields of 10%. While gross yields in the UAE are slightly lower, they are still the second highest in the Arab world.

“Rental yields are extraordinarily high in the UAE, compared to most other countries around the world. Now that prices have stabilised

in premium locations, the high yields make investing in the UAE property market an attractive proposition for any global

investor,” said Mc Loughlin.The positive sentiment is shared by real estate

advisory firm Cluttons, which predicts good quality, well-established developments will

continue to do well at the expense of newer residential areas. The firm also anticipates

the residential market will continue to gain from increasingly available

mortgage finance options at competitive rates. DAMAC Properties is experiencing the strongest demand in three years

across its range of premium developments at Dubai Marina, Downtown Dubai and the DIFC. There is a strong flight to quality in both Dubai and Abu Dhabi, as existing residents seek to upgrade and new buyers aim to take advantage of market conditions which currently offer extraordinary value for money l

THE UAE IN ‘ToP 5’ CoUNTRIES foR RENTAL RETURNS

Niall Mc Loughlin, Senior Vice President, DAMAC


ADVERToRIAL REmAx.Com.EG

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RE/MAX agents function as independent business owners making our network built on entrepreneurs rather than on managers and staff. Our philosophy is to offer the best possible service in the industry to help buyers and sellers make the right decision with regards to one of the most important decisions in life. We also plan to expand rapidly over the next 5 years in Egypt to have presence in Cairo, Alexandria, North Coast, Delta, Sinai, Red Sea and in Upper Egypt.

RE/MAX is the number 1 brand in the real estate brokerage business worldwide. The competitive edge of RE/MAX is that it was founded by top agents only for the top agents. The RE/MAX model allows the real estate agents to earn the highest allowable compensation for their work.

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What is RE/MAX and what makes it unique compared to other real estate brokers, bothin the region and worldwide?

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What was the driver behind launching RE/MAX in Egypt and how does it impact on the local market?

What is the reason behind your successand the outstanding performance of your business affiliates?

RE/MAX Egypt’s expansion revolves around franchised offices to qualified entrepreneurs and investors. We provide and support our franchisee network with:• The power of the world’s No. 1 brand in the real estate industry• RE/MAX University, offering the best real estate in-class and online training programs for both owners and agents• Agents recruitment and retention support programs • RE/MAX technology; the “iConnect” system which routes thousands of leads from REMAX.CoM.Eg straight to offices and agents. The RE/ MAX intranet site and REMAX.CoM.Eg offer countless marketing tools for agents and offices, allowing direct referrals between nearly 90,000 affiliates in more than 85 countries. All properties are displayed on REMAX.CoM.Eg and on gloBAl.REMAX.CoM, which are translated into over 32 languages and more than 30 currencies• Global network offering limitless business opportunities and global referrals• RE/MAX international conferences and conventions; exposure to worldwide markets and exchange of international experiences

What are the benefits of RE/MAX’s franchise opportunities?

Head office: 22 Kamal Eldin Hussein Street, Sheraton Heliopolis, Cairo, Egypt, Tel.: +202 22692004, E-mail: [email protected] of october: RE/MAX Ventures West: Arkan Center-Suite 142 Sheikh Zayed 2 6th October District, Giza, Egypt. Tel.: +201001881166Heliopolis: RE/MAX Almohager: # 12, El-Shaheid Mohamed Abd El-Hady St., Ard Al-Golf, Heliopolis, Cairo, Egypt. Tel.:(+202) 24183424, (+202)22907186 New Cairo City: RE/MAX Almohager: Villa # 141, 90Th. St., New Cairo City, Egypt. Tel.: (+202) 26178741Ain Sokhna: RE/MAX Almohager: Stella De Mari, Negma Mall.Tel.: +201000960062

Each office is independently owned and operated

RE/MAX Egypt has landed connecting local expertise and experience to the strongestreal estate network in the world

Founded in Denver, Colorado, in 1973 by real estate agents Dave and Gail Liniger, RE/MAX’s global organisation today supports over 90,000 sales associates worldwide in more than 85 countries. Earlier this year,RE/MAX Egypt was launched with a mission to develop the largest real estate brokerage network in the country.

Nobody in the world sells more real estate than RE/MAX

Khaled Nasser, Regional Director, RE/MAX Egypt


INTERNATIONAL NEWS

The masterplan vision for Convida Suape, a new city in north eastern Brazil, designed by global architecture, urbanism and design practice

Broadway Malyan, has been officially launched by the practice’s client, Moura Dubeux Engineering and Cone S/A earlier this year.

Convida Suape is a sustainable urban extension of the city of Cabo de Santo Agostinho near Recife, the capital city of the State of Pernambuco, and will result in the transformation of a 470 hectare area to accommodate up to 100,000 inhabitants.

The practice’s design was delivered by an integrated team of masterplanners, urban designers, architects, landscape architects and branding specialists based in its São Paulo, Lisbon and London offices.

The development promotes a compact urban model for walkability and sustainable access to learning, healthcare and employment. It features green buildings and new building typologies with integrated utility provision, will enhance the natural landscape and river corridors, and includes a substantial

on-going habitat-restoration programme. The city will be built in four phases with ten distinct neighbourhoods

providing 25,000 new homes set in 154 hectares of open space, as well as substantial provision for new businesses, health, education and leisure activities.

“Convida Suape will set a benchmark for strategic urban development and city expansion projects in north eastern Brazil, now one of the fastest growth areas in the world. The launch is testament to the integrated work of our world-class team of design experts delivering on our client’s ambitions in partnership with its stakeholders,” said Practice Director Margarida Caldeira.

Since the practice opened its São Paulo office in 2011 it has secured a series of projects in South America, including masterplanning and major mixed-use projects in Brazil for clients such as Moura Dubeux which it is supporting on several schemes, and it is now actively targeting countries including Argentina, Chile, Colombia and Mexico l

bRoADWAY mALYAN’S VISIoN foR NEW bRAzILIAN CITY LAUNCHED bY moURA DUbEUx

In the first quarter of 2012, the level of activity in Poland’s real estate market confirmed strong interest by foreign investors, the Q1 2012

Poland Investment market report by Savills showed.The total volume of commercial property investment transactions

exceeded $880 million in the first quarter of 2012, reflecting a 21% growth quarter-on-quarter and a 9% growth year-on-year, the report said.

Retail properties dominated in Q1 2012, accounting for approximately 80% of total investment volume. “Recent investment activity in the retail sector confirms that investors are still interested in prime retail assets in both major regional and smaller cities across the whole country. Key investment criteria include central location with good car accessibility and significant pedestrian flow as well as good covenant strength comprising a mix of well known international and domestic retailers,” the report said.

According to Savills, rising employment and strong consumer confidence are the main drivers for retail sales’ growth, which is supportive for both

the retail and warehousing markets.The largest investment transaction in the retail sector in Q1 2012 was

the sale of ING’s share in the holding company which owned a 77% stake in Zlote Tarasy. Zlote Tarasy is a mixed-use complex comprising 66,200 square metres of retail and 47,300 square metres of office space.

According to the report, activity in the commercial market is highly dominated by foreign investors, with Austrian, German and US investors having been the most active in Q1 2012.

“There is also stable interest from investors in the industrial market and we expect even more activity in this sector in 2012 as a result of an improving occupational market,” Savills said.

With regards to Poland’s future outlook, Savills commented:“Investment sentiment is expected to remain positive, supported by higher GDP growth than in most European countries, rising employment and increasing retail sales.” l

PoSITIVE oUTLook foR PoLAND’S INVESTmENT mARkET


INTERNATIONAL NEWS

A newly released Summer 2012 ‘European Market Indicators’ quarterly report by global real estate consultancy Knight Frank shows that the

recent deepening of the crisis in the Eurozone has had a negative impact on prime rents and yields in European commercial property markets. Although values were stable in the majority of European cities during the last quarter, a small number of markets saw rents fall or yields soften.

Knight Frank’s weighted average European prime office rent, calculated from the cities covered by the report, declined for the first time in over two years, falling by -0.5% in the three months to June. Prime office rents were revised downwards in Brussels (-6.8%), Barcelona (-5.9%), Milan (-1.0%) and Dublin (-0.6%).

Prime rents were largely stable elsewhere, indicating that there has been a pause in the rental growth that has been seen over the last year in cities such as Paris, Warsaw, Stockholm and Moscow.

While recent rental increases in these markets have in any case been modest, they now appear to have completely ground to a halt, with landlords and tenants adopting a ‘wait and see’ strategy as events in the Eurozone play out.

In the investment market, Knight Frank’s weighted average European prime office yield moved outwards slightly for the second successive quarter, rising by four basis points to 5.62%. This was a result of a 25 bps softening of yields in both Milan and Madrid.

Prime office yields remained unchanged in all other markets, but investment market sentiment appears to be weakening and a more widespread correction of prime office yields may follow in the coming quarters.

The fading of investor confidence has been reflected in reduced investment volumes in the year-to-date, particularly in southern Europe.

Matthew Colbourne, senior international research analyst, said: “The limited rental growth that has been recorded in European office markets over the last twelve months now appears to have almost entirely ended, as businesses cautiously assess the impact of recent developments in the Eurozone. With no quick solution to Europe’s problems in sight, we may be reaching a tipping point when occupier sentiment takes a more decisive turn for the worse and a greater number of markets may see rents start to fall over the rest of the year.”

Andrew Sim, head of European investment, commented: “The current uncertainty in the Eurozone is clearly having an impact on investor confidence and transaction volumes, particularly in secondary markets. However, there remains a strong appetite for prime property in the most stable and liquid cities, coming from super high net worth individuals as well as sovereign wealth funds and institutions from the Middle East and Asia. As a result, prime yields for the best property in Europe are holding firm.” l

EURozoNE CRISIS ImPACTS CommERCIAL PRoPERTY PRImE RENTS AND YIELDS

In New Zealand’s largest city on the South Island, private property rents are up as demand considerably exceeds supply, figures from the latest

price report from Trade Me Property show. Listings of houses for rent in Christchurch are down 34% but demand is up 47%.

Rents in Christchurch have increased some 26% in the last 12 months, well above the national average property rental rises of 4%.

“The news for prospective Christchurch tenants is still grim,” said Brendon Skipper, head of Trade Me Property.

“We’ve seen the number of properties available for rent in these three suburbs plummet more than 40% compared with a year ago and, on the flipside, the properties that do get listed are attracting huge volumes of enquiry,” he said.

While shortages of houses to rent in the Auckland rental market have hit the headlines in the past, Trade Me found listings are up 20% while demand

is down 18%. “Autumn has wound down and the winter hibernation period sees

tenants hunker down so we often see listing numbers swell and demand taper off,” Skipper said.

He pointed out that one surprise is the increase in listings and reduced demand in central Auckland hasn’t led to lower asking rents, with average rents in Auckland city remaining flat.

According to Skipper, one reason demand has softened in Auckland is that tenants are looking to become home owners. “Over the quarter, we’ve seen a 16% increase in enquiries from potential buyers compared to the same time in 2011 but they’ll be finding the market challenging too,” he said.

“Listings are flat and there’s plenty of healthy competition in Auckland in particular. Of course, that means it’s a good time to list your property if you’re thinking of selling,” he concluded l

PRIVATE PRoPERTY RENTS SoAR IN CHRISTCHURCH AS DEmAND ExCEEDS SUPPLY


INTERNATIONAL NEWS

London’s influence as a global city has been growing for the past five decades, during which time the area known as ‘prime’ has expanded significantly, driven in large part by international buyers who have remained a constant presence, says international real estate advisor Savills.

Key findings of Savills’ ‘World in London’ report:

• International buyers account for 34% of all sales in prime London, up from 27% in 2007 • Two-thirds of new development buyers are international, a reflection of strong overseas marketing campaigns • Chinese and Pacific Asian buyers a significant buying group in the new build sector with 31% market share vs 5% in the resales market • Western Europeans (particularly French and Italians) have the biggest market share after UK buyers; 15% of resale, 8% of new build sales • Eastern European and CIS (ex Soviet Union) are top spenders; average USD 8.9m in resale market, USD 11.3m in new build • International buyers outnumber sellers by 2:1, with Russian, French, Italian and Chinese the biggest net investors

LoNDoN: GoING GLobAL SINCE 1973

London, where 35 per cent of residents were born overseas, ranks as one of the world’s most cosmopolitan cities and the globalisation of the city’s prime London residential market continues to grow and evolve as its population becomes ever more diverse.

The value of prime London residential stock rose by USD 33 billion in the year to the end of June 2012, although at a slower rate than in previous quarters, as international home buyer and safe haven investor confidence in the UK capital continued.

Homes – not just safe depositsLatest estimates from Savills research put the net inflow of international

cash into prime London at over USD 28 billion since 2007. In the past 18 months international buyers have increased their spending, accounting for 34 per cent of sales in volume terms and 49 per cent by value, up from 24 per cent and 37 per cent respectively in 2007.

“There are perceptions that international buyers have turned swathes of prime London into dormitory areas, but our research explodes this myth,” says Yolande Barnes, head of Savills residential research. “The majority of overseas buyers are seeking homes rather than pure investments. Two-thirds of international buyers in the resales market live and work in London and are acquiring their primary residence. In prime central London the figure is just under half (46%), in prime south west London 83 per cent and prime north London 79 per cent.”

Overseas buyers are especially important to the (relatively small) new development market. They now account for 65 per cent of new build sales

across prime London, rising to 70 per cent in prime central locations and 78 per cent for new build properties over USD 7.8 million. “This buying provides much-needed certainty on funding for new schemes and often supplies new rental stock in all price brackets as 53 per cent of buyers are landlords. In short, this means that the majority of properties acquired are occupied full time by tenants,” says Barnes.

international owners are buying more than they sellThe result is that international buyers have become net investors, with

international buyers outnumbering international sellers by a factor of nearly two to one. Russians, Italians and French are the top three net investors, while Chinese buyers stand out as a growing group, now the 4th largest net purchasing group but almost entirely concentrated in new build properties. (See report for full nationality listing.)

UK buyers were the largest net sellers by volume, with 1.2 UK sellers for every UK buyer in the past 18 months, while Irish, Swedish and North American owners are the top international net sellers. This in part reflects the maturity of these national groups in the London market, and occupiers from these countries are well established and regularly sell as well as buy.

“The globalisation of London is not a new phenomenon,” says Yolande Barnes, head of Savills residential research. “We expect the proportion of prime overseas buyers to continue to fluctuate between 25 per cent and 40 per cent according to market, currency and global conditions, but they will without any doubt remain an important market force.” l


ASIA NEWS

A recent report by Jones Lang LaSalle India analyses the evolution of the real estate market of Ahmedabad - the largest city of Gujarat

– over the last four years. JLL says its decision to enter the city in 2009 was “based on its unmatched promise as a potential real estate investment destination, which factored in the city’s healthy local demand, as well as its outstanding industrial story.”

“The fact is that Ahmedabad has grown tremendously over the past decade, thanks to ultra-progressive policies and intelligent development governance. The city is providing extraordinary and unprecedented returns on the real estate front, and is one of the most exciting investment destinations in India today. With developers and investors from all over the country beating a straight path to Ahmedabad, the move to launch operations in 2009 has been timely and fully vindicated,” said Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India.

Office space investments have shown strong growth, with capital values for commercial properties rising by as much as 20-30% in areas such as Prahladnagar, S.G. Highway, Ashram Road and some parts of East Ahmedabad. Approximately 3.5 million square feet of commercial space has come up in the city over the last four years. Another 1.1 million square feet is currently under construction and another 2.5 million square feet will come up in next 2-3 years. The quality and services of the existing office spaces have risen remarkably in recent times too, JLL reports.

Residential property appreciation in Ahmedabad has been to the tune of 50% over the last three years. The areas currently commanding the highest demand for residential space are South Bopal, Bodakdev, Vastrapur, Nicol,

Nava Naroda and New Ranip. Approximately 16 million square feet of built-up residential space has been built in Ahmedabad over the last four years alone. Another 23 million square feet is currently under construction, and a further 30 million is proposed in various parts of the city. This amounts to approx. 70 million square feet of residential real estate, out of which the western part of the city will account for 47%, followed by 19% in the southern part and 17% each in northern and eastern parts of Ahmedabad. This is a significant supply, and yet residential prices in Ahmedabad market have not softened. This makes Ahmedabad a unique and high-potential market by any standards.

The report also observed a rapidly growing demand for office and industrial real estate in the region. JLL says this demand comes from an exciting bouquet of Indian and international players who are eager to open operations in the industrial areas of Sanand and DMIC. “The prime interest drivers for these players continue to be Gujarat’s admirably progressive stance towards infrastructure and investment flow enablement, and its pro-people orientation to real estate growth,” Puri said.

“With Sanand as a stellar upcoming industrial area and prospects of Maruti locating its operations near Bechraji, we see a lot of scope for further development. Hero Motocorp Ltd. has also shown interest for setting up a large manufacturing plant near Halol. To top it off, plans for high-speed rail connectivity between Ahmedabad, Mumbai and Pune are now being discussed, along with the Vadodara-Mumbai Expressway. This holds the promise of even faster growth in industrial strength, as well as in all other real estate verticals,” he concluded l

The average rental rate of Grade A office space in Bangkok’s central business district in Q1 2012 increased by 4.9% year-on-year, the

latest figures from CBRE Thailand show.The highest rents were recorded at the Park Ventures Ecoplex, an office

building on Wireless Road, where the asking price was USD 28 per square metre per month.

Average Grade A rents rose to USD 23 per square meter month, a rise of 1.6% from last year’s fourth quarter.

The total office supply in Bangkok increased to 8.14 million square meters, up by 2% year-on-year.

The supply grew by about 32,000 square meters in the quarter, but no new Grade A offices were added in central business district locations. Net

new take up of office space in Bangkok was 35,000 square meters, while the overall occupancy rate improved slightly to 86.1%.

“The office market continues to improve steadily, with an increase in the net take up and a higher occupancy rate. Provided there are no major external economic shocks or domestic political events, the outlook for the Bangkok office market is positive,” said Nithipat Tongpun, Executive Director and head of office services at CBRE Thailand.

Tongpun also added that due to the little new space being completed in Bangkok this year, tenants who wish to upgrade or expand will have limited choice, especially if they require large spaces. Rents are rising in the highest-quality and best located buildings and it is strongly recommended that tenants plan well in advance of lease expiry dates, he concluded l

fAST TRACk GRoWTH foR AHmEDAbAD, INDIA

bANGkok offICE mARkET LookING PoSITIVE, WITH RENTS UP ALmoST 5% YEAR-oN-YEAR


ASIA NEWS

Luxury and high-street fashion continued to dominate Singapore’s local retail scene, a recent research report by global real estate

services provider Savills showed.According to the July 2012 Singapore Retail Sector Briefing, April’s retail

sales index (excluding motor vehicles) edged up 2.9% year-on-year. Watch and jewellery, as well as telecommunication apparatus and computer sales were up 3.7% and 9.4% year-on-year respectively, indicating that discretionary spending is still strong, the report said.

More international retailers set-up a presence in Singapore with luxury and high-street fashion continuing to dominate the retail scene. Maiden store openings in Q2 2012 included Alexander Wang in the Hilton Singapore, J. Lindeberg in Mandarin Gallery, Tory Burch in Wisma Atria and Vince Camuto in Ngee Ann City. Some, such as Shana and TALLY WEiJL, chose to launch their first stores in suburban malls, usually in regional centres or locations with an affluent demographic profile, the report added.

According to Savills, the central business district (CBD) is fast becoming one of Singapore’s trendiest lifestyle and entertainment hotspots. Its affluent live-in population is estimated to increase from the current 17,000 to 23,300 over the next five years.

“Not only has the integrated resort transformed the area into a posh business and residential address, but the injection of a greater live-in population from several residential and hotel projects completed in recent years has been pivotal in breathing life into the CBD after office hours,” the report said.

Retail rents in the CBD range from single digits for conservation shophouses to over USD 16 per square foot per month for street-level units in Grade AAA office buildings.

“International retailers often view Singapore as an avenue to create brand awareness in Southeast Asia. As long as the Southeast Asian economies sustain their growth momentum, Singapore will remain a key market for international retailers in their global growth strategies,” concluded Alan Cheong, Director of Savills Research in Singapore l

LUxURY fASHIoN DomINATES SINGAPoRE’S RETAIL SCENE

The long delayed land and property tax bill for Thailand is to be redrafted to take into effect changes since the last general election, a report

from global property news service Propertywire shows.Finance Minister Kittiratt Na-Ranong said that he generally supports

the main thrust of the bill but thinks it should not be imposed nationwide. He has suggested that the legislation should apply only to land plots that have been appraised by the Treasury Department since it has so far been able to evaluate land prices for only about six million of 30 million land plots nationwide.

It is also proposed that the ceiling on tax rates that are based on appraisal prices will be increased to make the bill flexible. The rates proposed by the previous government were 0.05% on farmland, 0.1% on residential plots and 0.5% for commercial land. Unused land would be subject to a 0.5% rate, with the rate doubling every three years. The ceiling rates are quite low compared with rates imposed by other countries, according to Somchai Sujjapongse, Director General of the Fiscal Policy Office.

This does not mean that local governments will adopt maximum rates, but that effective rates would be much lower, he explained. Another change urged by Kittiratt relates to tax allowances. The current draft offers tax breaks for both small and low value land plots but the new draft would

offer tax breaks based solely on value. The tax exemption would be given to farmers and residential land owners. Kittiratt also wants a proposal to create a Land Bank scrapped. According to Sujjapongse, the central government should not take local governments revenue. The previous government proposed setting up the Land Bank, which would buy land from people and then redistribute it to landless people, with the funding coming from property taxes. Relevant parties in the real estate industry now have a chance to put forward their views under a consultation process and a public hearing is likely to be held before the proposals are forwarded to Kittiratt.

Tax officials and economists have pushed for the changes for many decades without success. Political support for the bill has been weak, as most politicians are large land owners. The previous government’s finance minister, Korn Chatikavanij, got the Cabinet to approve the bill, arguing that Thailand should tax wealth to create a more just system. The current tax system is said to be unfair to wage earners, as their wages are taxed, while the financial assets, land and other wealth of the rich are hardly taxed. The land and property tax would be collected by local governments and is expected to help them get more revenue for community development (Propertywire) l

THAILAND’S LAND AND PRoPERTY TAx bILL To bE REDRAfTED


REAL ESTATE

WHY INVEST IN REAL ESTATE IN EGYPT?Heavily shaken by political turmoil and economic instability that followed the revolution of 2011, Egypt’s once strong real estate market is now showing healthy signs of recovery. Over the long term, the country could emerge as an even more attractive place to do business than before the revolution, experts believe.


A year prior to Egypt’s revolution of February 2011 which marked the end of President Hosni Mubarak’s 30-year rule, Cairo was one of

the fastest growing real estate markets in the MENA region. According to the April 2011 Jones Lang LaSalle report ‘Revolution and Real Estate: Cairo,’ in 2010, stable economic growth, relatively low debt levels, a young and growing population as well as a favourable geographic location with control of the Suez Canal, solidified interest from real estate occupiers, developers and investors from the MENA region and beyond.

In January 2011, the overthrow of Tunisia’s President Zine El Abidine Ben Ali triggered initial street protests in Cairo, sparking Egypt’s 18-day revolution. This had a far-reaching impact on the country’s economy which practically came to a standstill with temporary closure of the banking and financial systems as well as many businesses. Consequently, investor confidence, tourism and foreign direct investment were also affected.

Although the revolution affected investor confidence and 2011 demonstrated a period of uncertainty, analysts believe in Egypt’s fundamentals. These include a large, young and fast growing population, a large number of marriages, a diversified economy, shortage of quality real estate and cost advantages over other regional or European countries.

Ayman Sami, JLL’s Country Head for Egypt, is optimistic about Egypt’sreal estate future:

“The Egyptian market fundamentals have not changed. The growth of new households, as illustrated by the large numbers of marriage still taking place, indicates that local demand will remain a strong demand driver supporting real estate growth. Over the long term, Egypt could emerge as an even more attractive place for business than it was before the revolution,” he said.

Although Cairo’s real estate market remained characterised by uncertainty during the first quarter of 2012, clarity returned to the market with increased activity in a number of sectors, the Jones Lang LaSalle Cairo Real Estate Market Overview Q1, 2012 found.

According to the report, there are several indicators that this year should see a potential improvement in the Cairo real estate market. Some real

estate projects will continue towards completion, including Cairo Festival City which is due to deliver its first office phase; Damac is also looking to open its retail and office project opposite Dandy Mall before the end of the year. In addition to this, construction has recommenced on a number of previously suspended projects such as Qatari Diar’s major mixed use development on the Nile Corniche.

Residential sectorIn 2011, residential sales transaction volumes declined sharply, “primarily

driven by uncertainty resulting from new legal measures introduced to control corruption and improve financial accountability between developers and the previous administration,” said Sami. The protests also highlighted Egypt’s acute shortage of affordable housing, estimated to stand at 1.5 million units.

Looking at the residential sector in Q1 2012, JLL observed increased sales activity. “SODIC’s West Town project has sold out its first three phases off plan and many large developers such as Emaar and Amer Group have extended their payment plans which has stimulated further demand. As a direct response to the protests of 2011, the government has also continued with the construction and supply of the one million affordable homes programme,” the report said.

Over the past two years, there has been a major shift to apartments aimed at middle income earners within gated compounds, led by major developers such as SODIC (6th of October Development and Investment Company) and Palm Hills Development (PHD).

Due to the trend of relocation to Cairo’s new satellite cities, central Cairo has seen practically no new large developments enter the market with exception of Emaar Misr’s Uptown Cairo project. However, reflecting increased confidence in the residential market, Amer Group has launched six new projects across Egypt with three of them being in Greater Cairo, the report added.

With regards to investing in the sector, Sami said that while the middle income sector offers very strong investment opportunities, housing aimed at low income earners plays an equally important role.

REAL ESTATEREAL ESTATE


“One cannot ignore the demand for affordable housing, however, in order to make affordable housing attractive, the government needs to play a major role to support the developers,” he said.

Looking at performance, in Q1 2012, the average price per square metre in New Cairo is estimated at around $1,780 for villas and $1,040 for apartments. In 6th of October, the price is $1,246 for villas and $916 for apartments.

Average rent for a 3 bedroom villa in New Cairo lies at $3,100 per month while 2 bedroom apartment rentals average almost $1,000 per month. In 6th of October City, 3 bedroom villa rental is around $2,800 per month while 2 bedroom apartments sit at $850 per month.

office sectorWhile in 2011 some companies had postponed their plans, others were

actively seeking to implement their market entrance or expansion plan established prior to the revolution, JLL said. The firm also mentioned that due to disturbances in central Cairo, the city’s peripheral commercial areas in New Cairo and 6th of October City are likely to benefit through offering higher quality new buildings, more car parking, lower rents and accessibility to the new and growing residential areas.

Indeed, Q1 2012 saw active demand for up to 10,000 sqm of office space from a number of international occupiers. Currently, there is a stock of about 729,000 sqm of Grade A office supply across the Cairo metropolitan area with the vast majority of this space being in the new urban cities such

as New Cairo and 6th of October City. A further 61,000 sqm is expected to complete over the remainder of the year with major projects including Cairo Festival City and Mivida by Emaar Misr, resulting in an improved standard of available space and greater choice. Average office rents in Central Cairo peaked in 2010 at $55 per sqm/month for prime Grade A space but declined by 20% during 2011 to $45 per sqm/month. Rentals for Grade A space in New Cairo and West Cairo stood at $20 - $25 in Q1 2012.

Major existing office projects in greater Cairo include Smart Village, 6th of October and Sheikh Zayed City, Citystars, Nile City Towers and Maadi. Major future office projects include Cairo Festival City, Citadel Plaza and Mivida.

Looking at investment in the office sector, Sami says that the petrochemicals sector still provides attractive opportunities. According to Egypt’s General Authority for investment (GAFI), in 2010, the sector represented approximately 12% of Egypt’s total industrial production and holds a great deal of promise in terms of future growth. Egypt ranks eighth in the Middle Eastern Petrochemicals Business Environment Rankings matrix ahead of Turkey and top gas producer Algeria. (GAFI)

Retail sectorDuring 2011, Egypt experienced a temporary reduction in retail spending

due to strikes and business closures during January and February, however shortly, trading returned to pre-crisis levels in most shopping centers. Egypt’s strong long-term fundamentals such as a large and young

REAL ESTATE


population with increasing purchasing power make the country’s retail market one of the most promising markets in the region, experts believe.

JLL said that in 2012, retailers continued to open new stores with recent examples including Go Sport, which signed a contract for their first store in Egypt at Dandy Mall. At the end of 2011, total mall based retail space was approximately 761,000 sqm, which is very low for a city of Cairo’s size. Despite delays, a possible 318,000 sqm of new retail space could enter the market during 2013, with the major completion likely to be Cairo Festival City with a GLA of 160,000 sqm. Other retail developments, including a number of mixed use schemes such as Emaar Square and Uptown Cairo, are expected to enter the market, adding more high quality retail space.

Chris Jolly, CEO of UK real estate fund manager Cadena, commented: “As of today, there are few quality malls in Egypt and this shortage presents good opportunities to investors. Also, Egypt needs the expertise to bring more international brands into the malls, and then to manage these malls, which is where we come in.” In Egypt, Cadena focuses on asset management and currently manages Dandy Mall in 6th of October City.

As Egypt’s retail sector is expected to grow significantly over the coming years, the market offers several attractive investment opportunities. “Within the retail sector we are looking at value retail i.e. hypermarkets, supermarkets, and mid to low market fashion. The high end or luxury market is still underperforming, but it could be a market that will eventually grow as with all emerging markets,” Sami said.

Hospitality/tourism sectorThe tourism/hotels sector, a crucial part of the Egyptian economy,

has experienced the most dramatic short term decline following the 2011 unrest. Tourist arrivals have dropped drastically; in February 2011, official data showed a decline of 63% (month-on-month) in Cairo’s hotel occupancy while occupancy was down 72% compared to the same month in 2010.

“Tourism was hit very hard in the short term and new construction projects were put on hold or delayed with uncertainties around long term investment decisions,” Sami said. According to the Egyptian Ministry of Tourism, revenues from tourism were $8.8 billion in 2011, down from $12.5 billion in 2010.

Good news for Q1, 2012: Tourist visitors to Egypt have increased by a significant 40% compared to Q1 2011, providing a major boost to the Cairo

hospitality sector, the JLL report said. Hotel occupancy rates increased from 35% in early 2011 to 45% in March 2012. According to the Egyptian Hotel Association, there were 28 hotels offering 8,920 rooms under construction in Cairo early this year.

Most current major tourist developments are concentrated around Egypt’s popular Red Sea resorts as well as its Mediterranean North Coast, an area gaining increasing international recognition as a tourist destination.

“The Red Sea has always been an attractive destination for European tourists and will remain so because it has sunny and warm beach weather almost all year round. Luxor and Aswan in the south of Egypt is also a very attractive destination for tourists who are interested in historical and archaeological sites,” Sami said.

“Egypt had reached a peak of 14 million tourists prior to the revolution and the current government is pro growing this sector; there are still areas that haven’t been tapped into for tourism such as parts of the Red Sea further south of Hurghada like Marsa Alam,” he concluded.

Future real estate investmentHowever, despite increased activity and clarity returning to the real estate

market, Sami commented that Egypt’s future prospects largely depend on the country’s ability to address its political issues and that continued certainty was a basic requirement for the economy to fully rebound.

“With the formation of the new government […] we believe that these challenges [will] be slowly resolved,” said Sami while adding that in order to support the orderly growth of the real estate sector, government spending on infrastructure needed to be revised as it has seen heavy cuts recently.

“For the longer term investor, Egypt will always be an attractive market with considerable potential. There is opportunity in the many challenges that need to be addressed, such as more affordable housing, but the sector needs stability to be able to do this,” Sami said.

Jolly agrees, saying that Cadena is determined to set up a shopping mall investment fund in Egypt, but is waiting for the right time to do so.

“The key challenge is political stability and the ability of the new president to work with the military. Also, the economy needs to be well managed and stimulated. The sooner investors can get clarity and confidence about the situation, the sooner they will return,” he said.

“Investing in Egypt is not a question of if, but a question of when and how much,” Jolly concluded l

REAL ESTATE


Political instability following the revolution of early 2011 which resulted in the ousting of President Hosni Mubarak had a devastating effect

on Egypt’s once thriving tourism industry. Today, confidence is high that the industry will soon bounce back and Egypt can reclaim its strong position as a global tourist destination.

As one of the country’s most important sectors, tourism will play a central role in strengthening the economy. In 2010, tourism accounted for $11.5 billion of the country’s $500 billion GDP. According to Tourism Minister Mounir Abdel-Nour, revenues from Egypt’s tourism sector were

down over 33 per cent in 2011, accounting for a loss of about $3.8 billion. On the upside however, tourist arrivals in Q1 2012 have increased 40 per cent compared to last year, says the Jones Lang LaSalle Cairo Real Estate Market Overview Q1 2012.

In his first public address on June 30, Mohamed Morsi, Egypt’s first democratically elected president, promised to work to attract foreign investment in all areas of the economy and to revive tourism. Already, prior to Egypt’s landmark election of June 16 and 17, the interim military government has taken several steps to boost tourism while major

TOURISM

fRom DUST To DAWNHaving witnessed a significant increase in tourist arrivals in the first half of 2012, Egypt is working at rebuilding itself as a leading global tourist destination with the dust settling on recent political turmoil.


TOURISM

developments are nearing completion and construction on new projects is resumed.

Signs of recoveryWhile tourist arrivals to Egypt dropped drastically in the aftermath

of the revolution and the hospitality sector experienced great losses, experts also predicted that it would be the first sector to rebound quickly. Depending on geographical location, some areas are recovering faster

than others.“In Hurghada, Sharm El-Sheikh, Marsa Alam and the other tourist

hotspots along the Red Sea life during the past year continued as normal, no hooded militias roaming the streets, no vigilantes, no soldiers toting automatic weapons just happy peaceful people going about their daily business,” said Peter Mitry, Managing Director of Egypt Real Property Brokers based in Egypt’s Red Sea destination Hurghada.

As of May this year, Red Sea resorts were once again enjoying healthy occupancy rates reaching up to 80 per cent in areas such as Hurghada and are still attracting many tourists with year round sunshine and beautiful beaches.

“In 2012 so far we had evidenced increased occupancies across the main markets (Cairo, Hurghada and Sharm El-Sheikh) albeit at reduced average room rates in an effort to attract additional travellers as the political situation remained volatile. Recovery has been stronger for the resort towns (Hurghada and Sharm El-Sheikh) compared to Cairo that remained the epicentre of the demonstrations,” commented Panos Loupasis, Senior Director of Development MEA at Wyndham Hotels two weeks before the presidential elections in June.

Current developmentsSharm El-Sheikh, the Red Sea’s most popular scuba diving and

snorkelling destination, has fast evolved from a small village to a thriving tourism hotspot offering countless hotels, resorts, nightlife, shopping and entertainment opportunities.

Citystars Sharm El-Sheikh of Citystars Properties is an impressive 7.5 million square metre luxury gated mixed-use community and will be home to the largest Crystal Lagoon in the world. Engineer Yehia al-Meteini, Chairman of Golden Coast, the project’s developer, commented: “The record-breaking Lagoon will add a new dimension to the tourism and real estate markets, not only in Egypt, but also in the Arab region at large.”

“Arab developers are quite capable of carrying out large-scale developments, and compete with key global developers, in terms of luxury and grandeur,” al-Meteini added. He also emphasised the fact that the project will further promote the city of Sharm El- Sheikh as a magnet to beach tourists while playing a pivotal role in bringing it back in the spotlight.

The residential component of Citystars Sharm El-Sheikh will offer 1 and 2 bedroom apartments ranging from 65 to 150 square metres in addition to 3 bedroom apartments as well as 3, 4 and 5 bedroom luxury villas. The development also includes four resorts, a retail waterfront promenade, an 18-hole signature golf course and a 9-hole desert course, a tennis academy, spa and wellness centre, extensive meeting and conference facilities as well as educational facilities. The project’s initial phase is


scheduled to be launched later this year.In Hurghada, the Red Sea coast’s second largest city after Suez, a major

new project was launched last month with Virgin Island. A 5-star front line beach apart-hotel, Virgin Island is set in the heart of Hurghada’s new promenade and has a private beach with marina. “Design and facilities are to the very best European standards and are sure to attract significant interest from investors and lifestyle buyers alike,” Mitry said.

South of Hurghada, Citystars Red Sea Riviera will cover 10 million square metres, with a 2 kilometre long beach front that contains a retail centre, a sports centre, a marina, an 18-hole signature golf course, hotels and resort residences.

In addition to the Red Sea region, Egypt’s Mediterranean North Coast is also increasingly gaining recognition as a new target region for beach tourism in the country. Several large developments aimed at attracting international tourists as well as Egyptians are nearing completion, with

the major project being Emaar Misr’s Marassi development, a 6.5 million square metre resort community including residential, hotel, retail, F&B and entertainment projects.

Steps to boost tourismIn an effort to boost the industry, Egypt is concentrating on the BRICS

countries and Japan to hit its target of $25 billion in tourism revenue by 2017, Abdel-Nour explained. In May this year, the tourism minister told Gulf News: “We’re diversifying our markets. We’re knocking on the doors of BRICS, Japan is coming back. We’re opening a new airline link between Cairo and Tokyo and the second between Cairo and Osaka.”

Additionally, the country is looking at incentivising low-cost carriers, reducing airport fees and seeking to attract chartered operations to further boost tourism. In April, the government has also decided to resume the sailing of Nile cruises from Cairo to Aswan as of mid-May,

TOURISM

after a 15-year suspension.Encouraging cultural tourism alongside beach tourism is also high on the

government’s agenda for the coming years. Part of the plan includes the development of the new Grand Egyptian Museum, the largest museum of Egyptology in the world. Expected to be completed by July 2015, the Grand Museum will showcase approximately 100,000 ancient Egyptian artefacts and will include a conference and learning centre to educate visitors on ancient Egyptian history.

Prospects for the futureLooking at the future of Egypt’s tourism industry in the immediate

short term, Loupasis of Wyndham Hotels commented:“The resort towns of Hurghada and Sharm El-Sheikh that typically

rely on the tour operator business will continue to enjoy increasing occupancies hopefully with a gradual improvement of the average room rate in the mid run. Within Cairo, areas away from the centre (primarily the 6th of October followed by Heliopolis) will continue enjoying better yields compared to the city centre hotels where the yields remain highly sensitive to political events.”

According to Loupasis, the long term outlook for the country’s tourism industry will be determined by its ability to maintain political stability: “Security, and sense of security, will remain the single most important

Citystars Sharm El-Sheikh


TOURISM

factor driving the international traveller back to Egypt,” he said.Peter Mitry believes that it won’t be long before the industry fully

recovers. “Egypt has always offered a blend of history and culture as well as a near perfect climate for beach and diving holidays for visitors from the Gulf, from Europe and from the Baltic states. Add to that, the 5-hour flight time from most capital cities and it is easy to see the attraction,” he said.

However, due to the high volume of all inclusive holidays organised by tour operators, Egypt’s Red Sea region has created a low budget market where dining and activities is centred primarily around the hotels. As a

result, many restaurants in Sharm El-Sheikh and Hurghada had to close down after a while due to a lack of traffic, Mitry explained.

“In the future we need action to reduce flight prices to Egypt for ‘travel only’ clients in order to provide encouragement for restaurant operators to continually try new ideas; staff training will also be a key requirement for the future as the many Egyptians working in the hotels and restaurants have little or no international experience so they are ill equipped to fulfil the needs of the more discerning overseas clients,” he said.

“With close attention in these areas, Egypt has the potential to become a world-class destination within five years,” he concluded l

Citystars Sharm El-Sheikh

Virgin Island Hurghada


Egypt’s North Coast is an area encompassing about 520 kilometres of Mediterranean shoreline that stretches from the city of Alexandria

in the east to Sallum near the Libyan border in the west. Blessed with beautiful beaches and an excellent climate, a number of tourist villages have recently emerged along the northern coast, many of which primarily cater to Egypt middle upper and upper classes. Although the area is considered particularly attractive to Egyptians, it is increasingly becoming more popular with foreign tourists due to its proximity to Alexandria and has evolved into a premium leisure destination for both Egyptians and foreign tourists.

While Egypt’s thriving tourism industry over the last decades has mainly been concentrated around the Red Sea resorts of Sharm El-Sheikh and Hurghada, today, the country’s Mediterranean coast is rapidly opening up to international tourism. Developments aimed at targeting the international market began only as recently as 2004, with the opening of Mövenpick’s El Alamein Resort and Spa; the first modern offering for the international 5-star market. The same year, El Alamein International Airport opened and made the coastal city available to European charter flights, followed by Marsa Matrouh airport’s opening to international flights in 2005.

Older resorts along Egypt’s northern coastal strip, such as Agami, have

NoRTH CoASTRenowned for its ideal summer weather and beautiful scenery, Egypt’s Mediterranean North Coast is positioning itself on the international tourism map as it increasingly receives interest from both local and foreign leisure travellers.

AREA FOCUS

Marassi, Sidi Abdul Rahman


AREA FOCUS

already been popular with Cairenes and Alexandrians over the last few decades, and a number of new villa developments have served the local market in recent years. However, due to a lack of hotels in the resorts and conservative dress codes on public beaches, the early North Coast resort developments have proven rather unsuitable for the international market.

In 2006, the Egyptian government requested bids for a large scale tourist resort development near El Alamein, about 110 kilometres west of Alexandria along the Sidi Abdul Rahman Gulf. Emaar Misr, the wholly owned subsidiary of global property developer Emaar ultimately won the bid with Marassi, a 6.5 million square meter gated, master-planned, year-round resort.

Emaar Misr sees a bright future for the North Coast and believes the area will become the ideal year round community and tourist destination; “a perfect marriage of nature, luxury and healthy upscale living.”

Emaar’s objective with Marassi is to develop a world-class, multi-season resort community targeted towards Europeans, Egyptians and Middle East nationals.

“[Our] vision is of a small, self-serviced, ‘Mediterranean’ beach town with a picturesque and active town centre along the inner harbour that can become the focal point for shopping, socialising and entertainment in the area,” the developer said.

“The quality of the services and the beauty of both the natural setting and the design of the world class development itself will contribute to the sense of contentment and wellbeing associated with visiting and living in Marassi,” Emaar Misr added.

Marassi covers an impressive surface area of roughly 6.5 million square meters and holds a total investment volume of around EGP 10 billion ($1.7 billion). The project includes hotels, a 6 kilometre private beach and an EGP 1.5 billion marina, expected to become the largest yacht marina on Egypt’s Mediterranean coast.

Seven residential districts include the exclusive resort-style Armani residences, featuring a combination of stacked villas and three- and four-bedroom villas, all facing the Mediterranean Sea, forming an integral part of Marassi. Specifically designed by Italian luxury designer Armani, the villa sizes range from 250 square metres to 500 square metres, with each unit featuring a private pool. According to Emaar, the “Armani Residences, Marassi blend the advantages of a spectacular location with the world’s most elegant and refined home designs.”

In addition to the residences, the development has a number of other residential units designed according to different architectural styles and sizes.

“The architectural character of the development’s districts is inspired by




AREA FOCUS

various Mediterranean architectural styles. Villages are defined by interior loop roads, and are organised into integrated residential neighbourhoods, where there are common area recreational elements, swimming pools, community meeting areas, and children’s play areas,” Emaar said.

The project also includes a Marassi beach clubhouse, spas as well as an 18-hole golf course and a Golf Academy. To date, 248 apartments and 90 villas and townhouses in various districts have been handed over.

Known for its exceptionally beautiful beaches and great climate, the area around El Alamein is attracting a significant amount of tourist developments. Haciendabay, constructed by Palm Hills Developments, is spread over nearly two and a half million square metres and includes residential units, an 18-hole golf course, various lagoons, lush landscaping, cabanas, several 5-star hotels, recreational facilities, food and beverage outlets as well as wellness centres.

Residential options include sea front villas, chalets overlooking the golf course as well as chalets at the exclusive Nikki Beach, an international lifestyle concept bringing together posh living, dining, fashion and music.

Adjacent to Haciendabay and spread over 207,000 square metres lies Hacienda White, Palm Hills’ newest addition to the North Coast. Hacienda White is a luxurious residential development featuring various villas and chalets, all offering unobstructed sea view. The project includes two large lagoons with private seaside cabanas, a clubhouse, sea front lounges as well as a boutique hotel and is located next to El Corte mall, a fashion, home accessories and F&B retail outlet.

Citystars Properties is also developing a North Coast project in Egypt’s

new summer destination. Citystars North Coast will include an exclusive residential complex, hotels, blue lagoons and recreational facilities. A wide variety of residential choices will feature resort-style amenities while international hotels will offer a range of rooms and suites. Strategically distributed lagoons throughout the development will offer swimming, boating and watersports facilities.

Another new development coming up in the Sidi Abdul Rahman area is Amwaj, developed by Al Ahly for Real Estate Development. Amwaj will be an integrated residential development with various facilities, targeted specifically at young couples and families. Modern in architecture, the development includes a 5-star hotel, an activity beach and recreation area.

Other smaller beach resorts targeted at international tourists in the area include Amer Group’s Porto Marina, Golf Porto Marina, and Porto Marina Residence, offering a mix of residential, tourist, retail, sports and leisure l



Widespread demonstrations across the Middle East that began in Tunisia in January 2011 have shown that Arab governments

can no longer ignore the needs of millions of low income citizens in their countries. A major issue many low to middle income families in the MENA region face is the lack of the availability of affordable housing. According to the Jones Lang LaSalle 2011 report on Affordable Housing in MENA, Egypt currently holds the record of the largest shortfall of affordable housing units (1,500,000) in the region. With 85 million inhabitants, Egypt is the Middle East’s most populous country while over 80 per cent of Egyptian households are classified as belonging to the low income sector, with a monthly income below EGP 2,000 (USD 340).

According to JLL, the MENA region is experiencing population growth around twice the global average and has a young overall age profile; both of these factors drive the demand for housing across the region substantially.

Challenges to the provision of affordable housingIn the case of Egypt, JLL identifies five key challenges the market faces

with regards to the provision of housing for the low income sector: An immature mortgage market, limited maintenance of affordable housing projects resulting in poor quality dwellings, insufficient interest from private developers, lack of access to affordable land and little government participation.

High land costs remain some of the major challenges potential developers of affordable housing face. “Affordable housing is particularly susceptible to land pricing, and land cost burdens have resulted in many projects being in isolated or otherwise marginal locations. This works against the integration of affordable housing projects into the wider community and can lead to significant additional costs being incurred for utilities, transportation infrastructure, social services and community amenities,” JLL said.

Access to housing finance poses another common problem in the wider MENA region with few countries having an active private mortgage market. In Egypt, the government has made several efforts in the past to address this issue and made attempts to revise its current mortgage law. In summer 2006, property registration fees were set to a maximum of EGP 2,000 (USD 330), prior to which fees were as high as 12 per cent of property value. Extensive marketing campaigns were hoped to increase awareness levels about the availability home financing options among the Egyptian society. However, despite revisions, the current mortgage law No. 148, in place since 2001, makes it difficult for most low income earners to qualify for mortgage services. For example, the maximum monthly instalment for low income earners must not exceed 25% of their monthly income, and

proof of land ownership must be given.Attracting increasing interest from private developers is another

challenge the affordable housing market faces in Egypt. Traditionally, few major developers have targeted the affordable sector due to the higher returns available from the luxury sector. According to JLL however, “the perception that ‘high end resulted in highest returns’ has been challenged by the collapse of the investment market across the region since 2008” and an increasingly oversupplied luxury market has resulted in a growing recognition that the affordable sector can provide strong, financial returns.

Addressing the problemIn 2011, the interim military government has recognised the need for

affordable housing and the Ministry of Housing has announced plans to construct one million new residential units across 22 different cities throughout Egypt over the next five years, JLL reports. With an average size of 63 square metres, these units are to be provided for those who currently do not have access to the private housing market. “The proposal is for the government to provide the land and for the private sector to undertake the construction for an agreed price. The average construction cost is estimated to be EGP 60,000 ($10,000) while the sales prices are likely to range between EGP 70,000 and EGP 80,000 which is well below the price of similar sized units in the private market,” JLL said.

In 2006, Orascom Development, a leading developer operating across the Middle East, launched its budget housing subsidiary Orascom Housing Communities (OHC). In 2007, OHC launched its flagship project Haram City, Egypt’s first large scale affordable housing development. Spanning roughly 8.4 million square meters of land, the fully integrated community will hold approximately 70,000 housing units upon completion. Haram City is located 20 kilometres west of Cairo, in 6th of October City and offers diverse community facilities including schools, stores, clinics, a cinema, houses of worship, as well as sporting facilities and will include retail and commercial properties as well as office space. Today, Haram City is home to over 30,000 people.

“The most important ingredient to create a sustainable town is ensuring a community is established from the onset of the project’s development. This entails providing the first residents with schools, clinics, retails stores, sporting facilities, houses of worship etc... and ultimately paving the way for job creation”, said Omar Elhitamy, OHC Managing Director during the inaugural Cityscape Egypt earlier this year.

The company is also currently developing Haram City’s latest phase,

A mILLIoN HomES ARE NoT ENoUGHAn immature mortgage market, lacking interest from private developers and insufficient government participation are the main reasons behind Egypt’s pressing affordable housing issue. Despite the government’s announcement of the construction of a million affordable homes over the next five years, much more needs to be done to resolve the issue in the future, analysts say.

AFFORDABLE HOUSING


AFFORDABLE HOUSING

Haram Life. Located on an area of 504,000 square metres of land, Haram Life offers a new line of housing unit designs with modern architecture, designed to “cater to a larger pool of the Egyptian society by providing clients with an additional option when choosing their housing unit.”

Haram Life allows buyers to choose from two, three, and four bedroom apartments, with all units including a living room, kitchen and bathroom. Units will be either semi-finished or finished, and are expected to be delivered to owners within the next two years.

Launched in July 2010, Qena Gardens is OHC’s newest development in Egypt. Spanning across approximately 2.8 million square meters, Qena Gardens is located 5 km from the city centre. Phase one of the project will offer over 8,000 housing units located on a land mass of 840,000 square metres. Similar to Haram City, Qena Gardens will provide residents with a full range of services, including recreational and retail services, houses of worship, medical facilities, a school, and workshops.

As part of OHC’s vision to create a fully-integrated self-sufficient community, the project will provide a number of employment opportunities to local residents. By creating access to employment, OHC says it “helps Egyptian citizens to access the tools they need to create a better standard of life for themselves.”

Possible solutionsIn discussing the question of the provision of affordable housing, Public

Private Partnerships (PPPs) are often considered as possible solutions. In the MENA region, Morocco is currently the only example where PPPs have worked well with regards to the development of affordable housing, according to JLL. Here, the government launched a programme six years ago by offering land at a reduced price to developers for the construction of housing units. To qualify for subsidised land, developers must agree to sell flats below a certain fixed price on two thirds of the land while on the final third, they are allowed to build other types of properties.

“There a re number of factors that explain why these PPP arrangements have worked well in Morocco, these include the ability of the government to offer subsidised land and tax breaks to make affordable housing projects more attractive to private developers. In other markets, the government has less scope (particularly in relation to tax breaks) and this has reduced the interest in this sector,” JLL said.

Another factor critical in supporting the provision of affordable housing is increased access to housing finance. “Providing increased access to

long term finance (through conventional mortgage or sharia compliant products) therefore forms a key part of the overall solution required across the region,” JLL said. In the case of Egypt, more effective and efficient reforms of the mortgage law would be needed in order to make home financing available to those who most need it.

From a design and planning point of view for affordable housing, JLL suggests that developers need to place importance on building cohesive communities. Rather than simply developing physical real estate, they need to create active liveable environments for stable communities that include sufficient facilities such as schools, retail and F&B. In addition to this, successful affordable housing projects should provide a range of housing styles and sizes to create a balanced community and great attention should be paid to the design of public areas and infrastructure.

The way forwardLooking at the way forward for affordable housing in Egypt, government

collaboration with the private sector seems to be crucial. “An important stepping stone in bridging the gap between supply and

demand is the collaboration between the government and private sector. Haram City portrays a success which paved the way for the expansion of affordable housing locally and internationally. Through the development of a fully integrated town, we have attracted about 30,000 residents to date, generated employment within our town which resulted in the creation of a vibrant city,” Elhitamy said.

At Cityscape Egypt earlier this year, Dr. Mohamed El-Baradei, Minister of Housing, Utilities and Urban Development said that the Ministry will focus on strategies to attract both local and international investment into the sector. He also said that projects initiated by the ministry, in cooperation with the private sector, will serve those of a low income level such as the million homes project and assured that the government will be a great supporter l

“The most important ingredient to create a sustainable town is ensuring a community is established from the onset of the project’s development. This entails providing the first residents with schools, clinics, retails stores, sporting facilities, houses of worship etc... and ultimately paving the way for job creation.”

“An important stepping stone in bridging the gap between supply and demand is the collaboration between the government and private sector. Haram City portrays a success which paved the way for the expansion of affordable housing locally and internationally. Through the development of a fully integrated town, we have attracted about 30,000 residents to date, generated employment within our town which resulted in the creation of a vibrant city.”


Mortgage finance and mass title registration is still fairly novel in Egypt. In 2005, the country had only two approved lenders, there

were hardly any home purchase mortgage loans issued and only 10 per cent of urban residential property was formally registered, a study on the Egyptian housing sector conducted by the Egypt Financial Services Project in 2006 showed.

Mortgages and property registration are closely related because “difficulties in registering properties and mortgage liens cause a rise in the transaction costs of mortgage lending, and increase risks to the lender of engaging in such lending, that the pledged collateral may not in fact be available, should the borrower default on his loan,” the study said.

In recent years, the Egyptian government has taken a series of actions

to jump-start mortgage lending and to improve the efficiency of the registration process and dramatically cut registration fees. In summer 2006, registration fees they were set to a minimum of EGP 500 (USD 83) and to a maximum of EGP 2,000 (USD 330), with the actual fee depending on dwelling size (in square meters). Prior to 2006, registration fees were as high as 12 per cent of property value.

Accompanied by extensive advertising and marketing campaigns by both lenders as well as the government, this was hoped to drastically increase the awareness levels among the Egyptian society about the availability of mortgage services and improved registration conditions.

Today, there are currently 13 home financing companies in Egypt as opposed to just two in 2005, however experts describe the Egyptian

MORTGAGE

HomE SWEET HomE? Despite several attempts to revise the mortgage law and simplify the property registration process, Egypt still has a long road ahead before its home finance market can fully take off and serve the people who need it most.


MORTGAGE

mortgage business still as underdeveloped and far from able to satisfy homebuyers’ demand for funds.

May Abdel Hamid, Chairman of the Egyptian Mortgage Finance Fund (MFF), explains the current condition of the mortgage law in the country.

“Real Estate Finance law (148) was passed in 2001 and is still effective. The law sets the rules for the types of loan products which banks and mortgage finance companies could offer to borrowers as well as the underwriting criteria which can be considered as the conditions required for the families to qualify to home loans. These underwriting criteria are as follows:”

• Maximum loan-to-value (LTV) of 90%• Maximum instalment 40% of monthly income and 25% for low

income earners• Maximum loan offered to a single person/family not to exceed

10% of MFC (Mortgage Finance Company) equity and 20% per group• Property must be valued by certified appraisers before financing • Amortisation of term loans must be predetermined • Income must be verified• Proof of landownership/registration

Ismail Abdoun, Managing Director at Al Ahly Mortgage Finance, one of Egypt’s 13 home financing companies, adds that in order to qualify for mortgage services with Al Ahly, the customer’s credit history has to be submitted and the age criteria have to be fulfilled.

Applicants must be at least 21 years old and the loan tenure cannot exceed the age of 60 years for employed applicants or 65 years for self-employed applicants.

Property registration and other hurdlesTraditionally, the lack of a coherent land and property registration system

has largely contributed to the fact that the development of a mature mortgage market in Egypt has experienced difficulties.

According to Abdoun, the most common reason for rejection of mortgage finance applications in Egypt is proof of property registration.

Although registration fees have decreased, the registering process is still slow compared to other countries in the MENA region and the rest of the world. According to the World Bank, the average time to register a property in Egypt in 2006 was 193 days, compared with 49 days in the Middle East region, and 32 days in OECD countries.

In addition to this, historically formal registration has been used so little in Egypt that people are simply not accustomed to it.

“The culture of registration is still not widespread because we have lived like this for the past 50 years,” Hala Bassiouni, Managing Director of the Egyptian Housing Finance Company (EHFC), said in a statement.

The EHFC rejects 50 per cent of the applications it receives, mostly due to problems with the property documents. Often the land for development is not registered, there is no clear ownership on the property, or the construction does not reflect the building license.

Furthermore, the novelty of mortgage products also deters Egyptians from considering them seriously.

“We are still a cash-based society. People are still a bit hesitant to go for mortgages probably because it’s a cultural [sensitivity] to be indebted on the roof that you are living under,” Bassiouni said. In her estimations, not more than 10 per cent of home buyers take out mortgages, incomparable, in her opinion, to the population size and the real estate stock of Egypt.


MORTGAGE

Until today, there is also a low level of mortgage finance awareness among the Egyptian society.

Abdoun believes that in order to increase the level of mortgage awareness among the society, the regulating authorities should conduct more conferences and advertisements, while mortgage finance companies should attend exhibitions and produce marketing campaigns about the availability of their services.

Lastly, high interest rates largely cause home purchasers to seek alternative payment options.

Prior to the establishment of mortgage finance services in Egypt, home purchase finance was limited to instalment sales by developers for the purchase of new dwellings; aside from these loans, purchases were financed by savings and borrowings from members of extended family and friends.

According to the Egypt Financial Services study, the instalment sales are wholly unregulated and have been subject to significant abuses. Developers require large downpayments and title remains with the developer until all instalments are paid, placing the purchaser at a distinct disadvantage. Purchasers are not permitted to occupy their units until a large share of the total purchase price, sometimes 100 percent, is paid off.

Legal changesComplex bureaucratic procedures, an inefficient property registration

system, high interest rates and a lack of public awareness about the availability of home finance services continue to hinder the development of a mature mortgage market in Egypt.

According to May Abdel Hamid, several legal changes are required to develop a smooth mortgage market in Egypt, which should rest on four pillars: Changes to the supervisory role of EFSA (Egyptian Financial Supervisory Authority), the scope of the law and the function of Mortgage Finance Fund, as well as improving procedures and penalties.

Established in 2009, EFSA is responsible for supervising and regulating non-banking financial markets and instruments in Egypt, including mortgage finance. According to May, EFSA needs to unify underwriting criteria between various lenders in order to allow for a harmonious mortgage market. Secondly, the authority should be authorised to remove the board of directors of and impose regulatory actions on any mortgage finance company if they violate the provisions of the law or create a risk that could threaten the stability of the mortgage finance industry.

Other points highlighted by May with regards to changes to EFSA’s supervisory role include establishing rules in owning/acquiring shares in mortgage finance companies by new entrants and mandating appraisers and mortgage brokers to establish and keep records of transactions which in turn will be used by EFSA to establish an electronic database jointly with the Central Bank of Egypt.

Changes to the scope of the law should include refinancing lenders and individuals, allowing financing of units under construction, purchasing portfolios from real estate development companies as well as allowing lenders to prepare their mortgage contracts at their discretion with the condition of obtaining the consent of the regulator on these forms.

With regards to the Mortgage Finance Fund, changes should focus on diversifying subsidy mechanisms and schemes to allow more flexibility through amending articles on subsidy, mandating all mortgage lenders to pay the guarantee premium for regular income borrowers and amending the 25% ceiling set as maximum monthly instalment for low income borrowers to be maximum 33%. The latter would significantly increase the number of families able to qualify for a mortgage.

Once the mortgage finance industry will advance, this is hoped to help solve the affordable housing shortage in Egypt, which currently lies at 1,500,000 homes.

“We are setting the stage for this industry to grow,” May Abdel Hamid concluded. l


Cityscape Global internal AD


The revolution of 2011 has given rise to much economic and political chaos and had a devastating impact on investor confidence in the

Egyptian market. Analysts say that reforming economic laws as well as institutions will help boost the Egyptian economy and pave the way for achieving social and economic prosperity. The faster these reforms take place, the sooner the Egyptian economy can restore its strength and regain both national and international investor confidence, analysts believe.

Serving as a major source of external finance, especially for countries with limited amount of capital at their disposal, foreign direct investment (FDI) is an important topic in discussing economic growth.

According to the General Authority For Investment and Free Zones (GAFI) in Egypt, FDI has reached USD 152.7 million during 2011, the year of the revolution, until March 2012, mostly in the industrial, financial services and construction sectors.

Currently, the UK, USA, Belgium, France, Italy and Sweden are among the top ten investors in Egypt. In the Arab world, the United Arab Emirates, Saudi Arabia, Bahrain and Qatar have been the main countries investing in Egypt in 2011.

As the principal governmental authority concerned with regulating and facilitating investment in Egypt, GAFI’s mission is to “enable and sustain Egypt’s economic growth through investment promotion, facilitation, efficient business services and advocacy of investor friendly policies.”

In an effort to increase the authority’s efficiency, GAFI broadened its scope from its traditional regulatory framework into a more effective and proactive investment promotion agency through implementing research and market intelligence, promotion and facilitation and the establishment of investor aftercare bodies.

“GAFI also represents Egypt’s sole ‘one stop shop’ for investment,

INVESTMENT

RETURN of foREIGN INVESToRS CRUCIALTo EGYPTThe Egyptian government is implementing several legal and institutional reforms in order to attract foreign direct investment into the country, an imperative factor in rebooting its economy and achieving social prosperity.


which aims at easing the way for investors worldwide to take advantage of the opportunities in Egypt’s promising emerging market. GAFI places emphasis on various investment opportunities that lie ahead in different sectors throughout the Egyptian economy. With this objective, GAFI holds its responsibility through developing communicational campaigns and assisting its image accentuating the improved investment climate in Egypt worldwide,” the authority states.

According to GAFI, Egypt’s key economic sectors are agribusiness, communications and information technology, education, financial sector, healthcare, logistics and transportation, petrochemicals, renewable energy, retail, textiles and tourism and real estate.

In an attempt to increase exports, attract foreign investment, introduce advanced technology and create more job opportunities, Egypt has been advocating the creation of Free Zones since the early 1970s. While Free Zones are located within national territory, they are considered offshore areas. Investors operating inside Free Zones export more than 50% of their total production, GAFI says. Among the Free Zone incentives and guarantees in Egypt are a lifetime exemption from all taxes and customs; exemption from all import/export regulations; the option to sell a certain percentage of production domestically if custom duties are paid and limited exemptions from labour provisions (GAFI). Currently,

Egypt has nine public free zones offering opportunities in various fields of investment.

Recent government initiativesPost revolution, the government began to implement several reforms

and measures to facilitate foreign investment in Egypt and to restore confidence in the market.

GAFI explains that in the medium run, greater transparency, competition and economic reforms are on Egypt’s agenda. “Egypt has inherent treasures and strengths that would enable such reforms; a young population and a large domestic market. The interim government is endorsing an economic reform program with the aim of promoting social justice, recovery, macroeconomic stability and job creation,” said Hanan Ahmed Saad, Senior Economic Researcher at GAFI.

After the revolution, the government has embraced an intensive three-dimensional promotion strategy based on business reform, FDI attraction and investor care. Saad highlights the following points which show some of the issued business reforms:

For efficiency and simplificationThe government has reduced the time required for registering foreign

INVESTMENT

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representation offices from 40 days to 72 hours, speeding up the registration process significantly.

Secondly, paying subscription fees to the Chamber of Industry and the Federation of Egyptian Industries is now available at the ‘one stop shop,’ GAFI.

Additionally, the second phase of facilitating the establishment of electronic companies on the official GAFI website has also been launched, simplifying the establishment process for these companies significantly.

Lastly, GAFI is increasing the number of its processing centres in governorates, providing increased and more convenient access for potential investors.

For business licensesReforms with regards to business licenses include the lifting of the

required preliminary industrial license when establishing business at GAFI, lifting the security approval requirement for media companies and the issuance of the imports/exports certificates for specific activities for one to five years.

Additionally, for small and medium enterprises (SMEs), a so-called ‘Bedaya Centre’ was established to help develop and assist SMEs in gaining access to bank financing. Although SMEs account for a large share of enterprises, employment and output, they receive a very low share of credit, with the majority often being denied any access to formal financial institutions. With the Bedaya Centre, GAFI aims to fill this ‘financing gap’ through the implementation of several initiatives that facilitate SMEs’ access to banks credit facilities required for their growth.

Lastly, in order to reduce the industrial business cost, the Ministry of Industry is reducing the value of Letters of Guarantee required to acquire land from industrial zones.

For investor careFinally, and most importantly, a ‘Contracts Committee’ is established,

which GAFI is a member of, to resolve any conflict that might arise

between investors and different governmental bodies over previously signed business contracts.

Investment Law No. (8) of 1997 is also modified to allow the reconciliation between investors and the government in the cases of proven fraud.

future and challengesWhen looking at Egypt’s current economic climate, Saad explains that

post revolution, the country’s priorities have become more focused towards social justice and job creation which can only be achieved through more transparency, fair competition and economic reforms.

“Egypt faces huge challenges, including a fast deteriorating macroeconomic situation and high unemployment, especially among the youth, as well as security issues. Unemployment has gone up by a third to more than 12% since the revolution and the rate continues to grow. Without security, no local or foreign investor will take the risk of establishing projects in Egypt,” he said.

According to Saad, Egypt’s ability to meet these challenges in the short-term will have important consequences for the country’s medium and long-term stability and development.

“These are the main challenges for the new president and his government, so they will do their best in maintaining macroeconomic stability; promoting the role of a competitive private sector in inclusive economic growth and employment creation; enhancing transparency and accountability of government, including fostering citizens’ participation, social accountability, and supporting the improved delivery of social services,” he said.

“All observers inside and outside Egypt agree that the Egyptian economy has the components that enable it to overcome the current crisis and go ahead on the way of building real democracy, which will necessarily lead to restoring tourism and foreign investments,” Saad concluded l

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NEW CAIRO

RISING fRom THE DESERTA response to increasing congestion and pollution of Cairo City, the planned urban settlement in the eastern outskirts of Egypt’s capital provides a new residence for Cairo’s people and businesses.

Cairo Festival City, Festival Living Apartments


Located in what was formerly desert, Cairo’s new satellite city was built to combat the congestion and overflow of downtown Cairo

and to offer a more tranquil lifestyle to citizens away from the noise and crowds of the city. The master plan was created on the basis of a vision to create a fully integrated community with housing for up to 2.5 million residents. Today, New Cairo already has various residential communities, businesses, retail, entertainment and recreation centres, with many more under development. New Cairo is also home to the new campus of the American University in Cairo (AUC), which relocated to the community from Tahrir Square as well as the German University in Cairo, the Future University in Egypt (FUE) and the Canadian International College (CIC).

Set over 350 meters above sea level, New Cairo offers pleasant weather all-year around. The planned urban settlement is a small metropolis with a full-fledged internal infrastructure and is surrounded by a highway network to ensure connectivity to other districts. New Cairo is located northeast of the city of Cairo, not far from Cairo International Airport.

The satellite city has been a means of escape for many from Egypt’s upper-middle and upper classes from the noise and pollution of Cairo. Many of the residences here are luxury villas and condominiums located in housing developments and gated communities.

Hyde Park Properties for Development is the master developer for the entire project of Garden Heights at New Cairo. Spread across 6 million square meters, the development comprises a total of more than 1,400 villas, over 28,700 apartments and 1,500 shops.

Garden Heights embraces the largest private landscaped park in Egypt and includes the Park Avenue Shopping district, luxury villas at Hyde Park and the French architecturally inspired Centre Ville apartments.

Design of the Centre Ville apartments leans on the elegant 1920s Parisian architecture. The developer offers different types of apartments in sizes ranging from 80 square meters up to 228 square meters with views of the green parks.

Spread across 1.5 million square meters, the Hyde Park villa development offers 24 different villa facades that range from neo-classical and Italian country to California-Spanish style. Residents can enjoy a pedestrian friendly neighbourhood with up to 7 kilometres of walking and jogging trails throughout the park which also has several garden pavilions, benches and decorative water bodies.

With over 1,500 shops, Park Avenue at Hyde Park will be a high-end retail destination and among one of the biggest in the Middle East.

Construction of phase 1 of the Garden Heights project including villas, apartments and shops is 90% complete while landscaping, roads, gate, fences and infrastructure is 60% complete. To date, a total of 1,365 units at Garden Heights have been sold and 800 are to be delivered by the end of this year.

Set on an area of 10 million square metres and built to accommodate 200,000 inhabitants, Al Rehab is amongst Talaat Moustafa Group’s (TMG) largest and most prominent development projects in New Cairo. Al Rehab will be built in 10 phases and has an extensive list of comprehensive services to cater for all needs of its residents. These include five language schools, health and emergency medical services, commercial areas as well as a large sports and social club.

Located on the western end of New Cairo, Al-Futtaim Group’s Cairo Festival City (CFC) is a mixed use urban community spanning over 3 million square meters. CFC includes a premier indoor-outdoor retail and entertainment resort, Cairo Festival Centre, several luxury residential communities, office spaces and hotels. Upon completion, Cairo Festival City will be home to over 13,000 residents and offer work space for 50,000 office staff.

Residential projects include 480 Mediterranean-styled Oriana Villas with various architectural styles and several different configurations. Over 80% of Oriana is dedicated to parks and greenery with many walkways and plazas. Handover will take place in several phases, commencing this year. In Q4 2012, CFC will hand over an initial 25 villas, while further 150 villas will be handed over in Q2 2015.

Madinet nasr for Housing and Development (MNHD) is one of Egypt’s leading real estate development companies, originally founded in 1959 as a public company. In 2006, Beltone Private Equity acquired a major stake of MNHD which triggered a reformation wave within the company. The new management team focuses on unlocking the potential of the company’s extensive land bank while leading MNHD into a new era.

Tag Sultan is MNHD’s new signature project, the first phase of the long awaited Teegan development. Tag Sultan boasts a rich diversity of

residential unit types and sizes to suit all tastes and needs, all offering distinguished contemporary designs. Tag Sultan’s prime location on the Cairo Ring Road offers excellent accessibility to the surrounding neighbourhoods of Heliopolis, downtown Cairo, New Cairo and Cairo Airport.

KM45 is a visionary development located in the vicinity of New Cairo. KM45 is the product of the creative design by internationally renowned architectural firm Benoy, master planners of Abu Dhabi’s Yas Island.

NEW CAIRO

Cairo Festival City, Oriana Villa Garden Heights, actual site photo, Separate villas

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A nEW ERA FoR MnHD


CFC’s Festival Living Apartments lie in a gated residential compound that is composed of mid-rise apartment buildings. The apartments range in size from 126 square metres to 330 square metres, offering 2, 3 and 4 bedrooms. Project amenities include a club house with outdoor swimming pool, spa, tennis courts and a restaurant. Handover of the first batch of 250 apartments in Festival Living will begin in Q2 2014.

Four office buildings covering 40,000 square metres have also already been built as a part of Cairo Festival City’s Business District and are currently being handed over to tenants.

Not far from AUC, Emaar Misr is developing its Mivida project on 3.8. million square metres of land, designed to become a world-class integrated community. Mivida will host a spectrum of amenities including international educational and healthcare facilities, a business park, hotel and a town centre with boulevard style shopping. Residents can choose from three different residential types: Apartments, townhouses and villas. Apartments range in size from 125 to 200 to square metres, townhouses from 189 to 320 square metres and villas from 228 to 495 square metres. The biggest amenity in the development will be a 33 acre park.

Stretching along 1.2 kilometres beside the ring road, Citystars Katameyah is a mixed-use property with a total area of 250,000 square metres that includes shopping, commercial and residential towers and two international hotels. The retail component will have a GLA (Gross Leasable Area) of 85,000 square metres as well as 250 stores spread over three floors and will include a 17-screen cinema and a 6,000 square metre theme park.

Citystars Katameyah’s residential component will consist of two buildings that offer a variety of housing, ranging from 160 square metre 2-bedroom apartments with private swimming pool to 500 square metre villas with their own private gardens. In addition, the project will be home to two international hotels providing a total of around 440 rooms and suites.

Another project in the heart of New Cairo was launched by SODIC (Sixth

of October Development and Investment Company): Kattameya Plaza. An upscale apartment complex, the development includes approximately 658 apartments in 41 buildings.

Five minutes from Kattameya Plaza is SODIC’s Eastown, designed to serve as the bustling town centre of New Cairo and Kattameya. Eastown provides premium residential, retail and office space along with shopping, entertainment and sustainable living experiences on 860,000 square metres of land. It will include 1,600 residential units, 1,000 offices, 2,000 boutiques and retail outlets and up to five hotels.

Towards the eastern part of New Cairo, Al Ahly for Real Estate Development is developing ‘The Square.’ The project is built over an area of over 400,000 square metres and includes residential, retail and commercial areas. Residential types include townhouses, twinhouses and apartments while facilities include green parks with outdoor areas, swimming pools, jogging track and biking trail, shopping centre and gym.

With a total land area spanning 92,000 square metres, La Mirada is one of New Cairo’s smaller communities while offering an equally friendly and quality environment. Spread over 24 residential buildings, the project offers two different apartment types in sizes ranging from 91 square metres to 231 square metres. Expected completion date is 2014.

New Cairo is growing. TMG currently extends the satellite city to the west with its ambitious Madinaty project, “a city of international standards in Egypt” (TMG). Madinaty’s detailed master plan is the collaboration between the US design firms HHCP, SWA and Sasaki. The project will include villas and apartment buildings, vast green areas, golf courses, hospitals, business centers, hotels, educational institutions, sports and social clubs, household services and entertainment facilities. Madinaty is a city designed to provide a modern life for 600,000 inhabitants in 120,000 housing units while acting as a modern extension to New Cairo l

NEW CAIRO

Garden Heights, actual site photo, Separate villas Citystars, Katameyah

This gracefully designed urban community places homeownership within reach of all aspirers of a better quality of life in a safe and clean environment while preserving the city feel.

KM45 is a series of residential islands with a water lagoon at the city’s core, making it the first non-coastal residential development in Egypt to contain a major waterfront. The self-sufficient city will offer new, diverse residential products at competitive prices and is scheduled to launch in the first quarter of 2013.

KM45, Madinet Nasr for Housing and Development


WEST CAIRO

In Cairo’s western outskirts, two satellite cities continue to develop: 6th of October City and Sheikh Zayed City. Similar to New Cairo, 6th of October City was established as a reaction to combat increasing congestion of Cairo city. Today home to 700,000 inhabitants, the city is expected to house a population of 3.7 million people.

Covering an area of around 400 square kilometres, 6th of October City is 17 kilometres from the great pyramids of Giza and 32 km from Cairo downtown. It has various residential communities, businesses, retail and entertainment centres and hosts one of the largest industrial zones in Egypt. Some of the largest businesses in 6th of October City include Vodafone Egypt, General Motors Egypt and the Bavarian Auto Group. The town is also home to Egypt’s Smart Village, a technology park and regional hub for many companies in the IT and financial sectors.

The satellite city also has numerous private universities and hosts students of many nationalities who seek education at its facilities. The medical infrastructure is made up by several public and private hospitals while a range of international hotels caters to tourists and business travellers.

Currently, a number of large scale mixed-use projects are under development and more are in planning stages. 6ht of October City is divided into several districts and its residential components include all housing categories ranging from economic and mid-range to luxury.

Madinet Nasr for Housing and Development, originally established in 1959 to develop Cairo’s Nasr City district, is concentrating on the provision of affordable housing with its Nasr Gardens project. Designed as a fully integrated community, Nasr Gardens is built on over 650,000 square metres and is home to numerous international corporate headquarters, universities, shopping malls and amusement parks.

Nasr Gardens is situated near key communities and major amenities such as Dreamland, the studios of Media Production City, Hilton Pyramids Golf resort, Sheraton Dreamland Hotel & Conference Center and the future Mall of Egypt, set to be the largest mall in Egypt.

“The prime location of this community places residents near the Ring Road and other major highways, granting easy access to the up-and-coming developments of the area and providing easy and direct access to Cairo and its Eastern suburbs,” the developer said.

6TH of oCTobER AND SHEIkH zAYED CITYDesigned to relieve pressure on central Cairo, Cairo’s western expansion is a vibrant mix of different residential type compounds, international businesses, universities and some of Egypt’s largest shopping malls.


WEST CAIRO

Citystars Properties, one of Egypt’s leading real estate developers, is also in the planning stages for its Citystars 6th of October project, targeted primarily to the luxury market. With Citystars 6th of October, the company will develop a residential complex, an office park, an integrated retail and entertainment centre and hotels.

“The shopping and entertainment centre will combine luxury and convenience into one unique destination, with ample parking and a selection of high quality food and beverage outlets. With 123,000 square metres of GLA (Gross Leasable Areas), Citystars 6th of October will redefine the shopping and entertainment experiences for the city’s residents,” the developer said.

The office towers will be designed to cater to the needs of established businesses while offering large and advanced multimedia infrastructures. Citystars 6th of October will also contain an exclusive residential complex with amenities such as a unique health club, hotel services and a swimming pool. In addition to this, the community will include 2 international hotels with a lifestyle health club and spa, multi-purpose sports courts for tennis, basketball and volleyball, a gymnasium as well as sauna and steam rooms.

Palm Hills Development currently has three projects underway: Palm Hills October, Palm Parks and Village Gardens October. Palm Hills October, the company’s flagship project, is built across more than 5 million square meters, offering a full-range of housing options and is surrounded by landscaped lawns and gardens. Amenities in this high-end compound include a 27-hole golf course designed by the internationally acclaimed Nicklaus Design and a 5-star hotel.

The Palm Club is the community’s sports and recreational facility with football club and tennis academy and also encompasses squash courts and other sporting facilities in addition to a clubhouse, restaurants and meeting facilities.

Palm Parks is a commercial and residential compound, mostly comprising of office buildings and office space. Spread on nearly 475,000 square metres, Palm Parks creates an environment “similar to living in the financial and commercial districts of hub cities.” (Palm Hills)

Situated on the main 26th July corridor road in 6th of October City, Village Gardens October is a modern and young mixed-use development spread over 236, 376 square meters offering semi attached villas, twin apartments, and town houses. Surrounded by greenery, residents can enjoy the facilities of the Clubhouse and a mall amongst other services.

6th of October City is also home to the Mall of Arabia and Dandy Mall, some of Egypt’s largest shopping malls.

Bordering 6th of October City to the west is Sheikh Zayed City. Sixth of October Development and Investment Company (SODIC) is a major developer in the area with its SODIC West project. SODIC West is the largest planned mixed-use development in Egypt’s Sheikh Zayed area and is double the size of Zamalek. Today, SODIC West has 6,000 residents with a catchment area of 60,000 people. SODIC West is made up of several developments: Beverly Hills, Allegria, Westown, CASA, Designopolis and The Strip.

Developed in collaboration with Solidere International, Westown is designed as a mixed-use city centre and will be the anchor for the cities of Sheikh Zayed and Sixth of October. “This flourishing city centre brings together the fundamentals of residential, social and commercial life in a modern city that values pedestrian circulation, architectural quality and environmental responsibility and sustainability,” SODIC said.

Westown comprises 1.2 million square metres of land and has a built up area of 1.8 million square metres. It will include 2,390 residential units, 4,000 offices, 3,000 boutiques and retail outlets as well as up to seven hotels. Blocks in Westown include Forty West, The Polygon Business Park and Westown Residences.

Allegria is a high-end residential development consisting of over 1,300 villas and townhouses, a large majority of which were sold in record time and according to the company, with no advertising. Allegria includes Egypt’s first signature golf course designed by golf legend Greg Norman and managed by Troon, the world’s leading golf management company.

In 2007 Allegria received an award of merit from the American Society of Landscape Architects (ASLA) for its masterplan, which was developed by international design firm EDAW. Allegria is delivered in four phases; delivery of the first homes began in October 2010 while phases 3 and 4 are scheduled to be delivered by 2015.

One of the first ever large scale residential compounds to be developed in Sheikh Zayed City, Beverly Hills offers over 1,800 villas and apartments. The development covers 1.75 million square metres and will be a mixed-use residential and commercial development. The 10,000 square metre Beverly Hills Club House has a large restaurant and main hall for functions. In addition to recreational facilities, the club house also offers a variety of sports facilities including a swimming pool, a children’s pool, a large multi-purpose field which can host football games, a children’s playground, a tea garden and a games room. The club house will also provide sports activities for children between 5-12 years of age.

Overlooking Allegria’s Greg Norman Signature Course is CASA, “marking a new standard in contemporary apartment living.” (SODIC)

Designed by the renowned Egyptian architect Shehab Mazhar, CASA is planned with the family in mind. Comprehensive facilities include security, 24/7 property management, parking, a clubhouse, 14 swimming pools, barbecue areas, and play areas for children set amidst open green spaces. On offer are four different apartment layouts, ground floor garden units to penthouses with private rooftop terraces. All units are constructed and on track for delivery in 2013 l

Nasr Gardens, 6th of October City


Strong market fundamentals coupled with the development of new quality retail space make Egypt one of the region’s most promising retail opportunities. According to experts, it is only a matter of time before investment will flow back into the sector and Egypt’s retail market will flourish.

The past year seems to have been a good year for retail in global emerging markets in general, including the Middle East.

“While Europe faced another year of economic turmoil in 2011, developing countries forged full speed ahead,” said management consulting firm A.T. Kearney, adding that over the past five years, global retailers such as France-based Carrefour, US-based Wal-Mart, UK-based Tesco and Germany-based Metro Group saw revenues grow 2.5 times faster in developing markets as opposed to the revenue in their respective home markets.

In Egypt, political turmoil and economic instability have posed no hindrance to growth in the retail sector. While the revolution of 2011 temporarily froze all FDI to Egypt, and obviously impacted the turnover of the existing retail brands in the country, the market nevertheless almost normalised shortly, said Mohamed Galal, Chairman of Tasweeq Shopping Malls in Cairo.

According to A.T. Kearney, the market not only stabilised rapidly but is also showing strong signs of growth. “Egypt’s retail market is expected to grow 10 per cent over the next five years, driven by a large, active and

growing population of more than 80.4 million that is gaining purchasing power. Still, Egypt has a low share of modern retailing compared to other North African countries such as Morocco and Tunisia. This, coupled with low levels of market consolidation and growing consumer demand, continues to make Egypt attractive for large global retailers,” the firm said.

According to Galal, “there is a high interest by all regional retailers to expand in Egypt especially Cairo and Alexandria given the high density of the relevant catchment population in the middle segment retail, and the almost saturation [of the market] in the UAE.”

Chris Jolly, CEO of UK real estate fund manager Cadena, agrees on Egypt’s promising market characteristics. “Egypt has strong fundamentals which haven’t changed, such as a large and young population with high aspirations. These are people who want to own nice fashion and technology etc. Secondly, there is a growing middle class with increasing purchasing power. Thirdly, there are few quality malls in the country and this shortage presents good opportunities for investors. Lastly, Cairo’s new towns such as New Cairo and 6th of October City need to have a complete infrastructure around them, with retail being part of this infrastructure,” he said.

RETAIL

RETAIL oN THE RISE

Emaar Square, Uptown Cairo


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Cairo Festival Centre, Light Court


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New malls enter the market In the past, one of the challenges the retail market in Egypt faced was a

relative lack of quality retail space, deterring international retailers from considering Egypt as a feasible option for expansion. However, at present two major developments are underway in greater Cairo, namely Cairo Festival City and the Mall of Egypt. According to Matthew Jay, Associate Director Middle East Region at CBRE, the addition of this quality retail space to the market is a key factor in attracting international retailers and thus further contributes to growth in the sector.

Scheduled to open in Q2 2013, Cairo Festival City (CFC) is a mixed-use urban community development spanning three million square metres, designed to be Egypt’s premier shopping, dining and entertainment destination. In the heart of CFC lies the Festival Centre, an impressive retail resort offering a total of 180,000 square metres of retail space. The multi-level centre contains three primary districts: fashion, lifestyle and entertainment and has over 300 shops, more than 95 restaurants and cafés, a 17-screen Multiplex Cinema, French hypermarket Carrefour, KidZania Cairo and parking for over 7,000 cars.

Set amongst the courtyards of Festival Centre is Festival Village, a 15,000 square metre outdoor entertainment hub bringing together an array of boutique retail shops, cafés and restaurants.

Mall of Egypt in Cairo is currently under construction by Majid Al Futtaim Properties and set for an opening in 2014. Designed to provide 160,000 square metres of retail space, the development will feature Ski Egypt, modelled on the famous Ski Dubai in the United Arab Emirates.

Mall of Egypt is hoped to be the dominant super mall serving the western half of the city, with a strong fashion element, a 17-screen cinema, family entertainment centre and over 50 food and beverage outlets.

Emaar Square at Uptown Cairo, a four million square metre integrated community developed by Emaar Misr, is also expected to enter the market soon. Designed as an open-air retail area, Emaar Square consists of over 150,000 square metres of retail space and will be home to world-class fashion brands, numerous cafés, restaurants and open green spaces with seating areas.

In addition to the retail projects currently under development, there are already several shopping centres in the market performing well, Galal explains:

“There are seven large malls operational and quite successful: Mall of Arabia, Citystars, Alexandria City Centre, Maadi City Centre, Sun City Mall, Dandy Mega Mall and San Stefano Mall Alexandria. Other smaller successful malls are Tiba Outlet Mall (the first outlet centre in Egypt), Geneina Mall, and Senzo Mall Hurghada.”

CityLight and Al Orouba malls in Alexandria are also new additions to the market in 2013 and 2014. CityLight will be Alexandria’s biggest mall and part of a larger mixed-use development, offering over 350 stores on 75,000 square metres, numerous food and beverage outlets as well as entertainment options.

RetailersAccording to A.T. Kearney, policy reforms in Egypt that have taken place

over the last few years, such as tariff and tax reductions, helped pave the way for entry by foreign non-grocery retailers. In 2010, Marks & Spencer opened its first Egyptian store in conjunction with UAE-based franchise partner Al-Futtaim Group, while Debenhams expanded into Africa with its first store in the Alexandria City Centre mall.

In 2011, some international retailers were forced to shut down temporarily in Cairo and Alexandria due to the violent protests early in the year. Eighteen months on, the sentiment among new retailers looking to enter the market in the short term is still dominated by caution.

“Retailers are watching carefully and brands from around the world are cautious and waiting to see the outcome [of the political situation],” Jay of CBRE said.

Currently, the grocery sector is without doubt the fastest growing retail domain in Egypt. According to A.T. Kearney, within grocery, international retailers have a strong foothold in the hypermarket sector, where the focus is on the middle-income population and the sale of local products.

“Competition in this space is increasing with the arrival of new international grocery retailers and the expansion of existing international retailers. The modern grocery retail area is expected to grow by 23 percent

Cairo Festival Centre, North Passage


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annually over the next few years,” the firm said.“Lulu Hypermarket, from Abu Dhabi-based EMKE entered in 2010, with

plans to expand in coming years. Carrefour has doubled its sales area in Cairo and Alexandria over the past five years, with plans for 15 more stores in Egypt. Metro Group entered in 2010 under its Makro Cash & Carry banner and plans to open 20 outlets in the long-term. Metro sources 90 per cent of its products locally. Dubai-based Spinneys also plans to expand its presence in coming years,” A.T. Kearney added.

Rise of the online consumerDespite the fact that internet retailing is yet to take hold in many

emerging markets including the Middle East, experts believe that Egypt has the right market fundamentals to tap the increasing purchasing power of the country’s online community.

Omar Soudodi, General Manager of souq.com Egypt, one of Egypt’s most successful online retail platforms, is highly optimistic about online retail growth in the country.

“The number of Egyptians online is growing considerably. Figures from the Ministry of Communications in Egypt show that while in 2010, only 20% of Egyptians were online, in 2012, there are 32% of Egyptians online. Out of those 32% currently online, 20% will become online shoppers by 2017. In addition to this, online penetration in Egypt is growing and will reach 40% by 2017,” he said.

UAE-based company souq.com, often referred to as the Middle East’s very own ebay, entered the Egyptian market in January 2010. Since then, the site has proven highly popular and now ranks among the top 50 internet sites in Egypt, Soudodi said.

When it comes to popularity of certain types of products, Egyptian online consumers are following give or take the global trend, Soudodi explained. “64% of purchased goods are electronics. However, over the last few years home and decor, books and clothing have become more and more popular,” he said.

Despite significant growth within e-commerce, emerging markets still face several challenges that impact the sector. In Egypt, one of the major issues is credit card accessibility, with currently only about 9% of the population possessing a credit card, Soudodi said.

On the other hand, alternative payment options exist with ‘cash on delivery’ being by far the most popular payment option, used by 70% of Egyptian online shoppers. “This is not so much an issue or a question of security but rather a cultural thing. We are a ‘hands on’ kind of culture and like to see what we get before we pay for it,” Soudodi said.

Prospects for the futureLooking at the future of Egypt’s retail market, experts agree that the

most important factors in determining its prosperity level are political stability as well as the degree to which the government is willing to create a favourable investment climate.

“In a country like Egypt, where the government still regulates the importation of all importations, the role of the government is still very crucial in facilitating trade, and relaxing importation requirements to expedite the clearance process. NGOs like the MECSC [Middle East Council of Shopping Centres] and other trade organisations play an important role in shaping the investment climate,” Galal of Tasweeq Shopping Malls commented.

With regards to Egypt’s future retail investment climate, Jolly further added:“The key challenge is political stability and the ability of the new president

to work with the military. Also, the economy needs to be well managed and stimulated. The sooner investors can get clarity and confidence about the situation, the sooner they will return.”

According to Galal, it won’t be long before this happens. “In a few months, the market will normalise and FDI will flow into the country. The high population of Egypt now censused at more than 80 million, with 50% below the age of 40, make the Egyptian market the most appealing market in the Middle East,” he concluded l

Cairo Festival Centre, Waterfront


ALEXANDRIA

Owing its name to its founder Alexander the Great, Alexandria today has a population of just over 4 million and is Egypt’s second largest

city. Stretching around 30 kilometres along the Mediterranean coast, the city is home to the famous Library of Alexandria and is also Egypt’s largest seaport, serving approximately 80 per cent of the country’s imports and exports. Less crowded than Cairo, blessed with beautiful beaches and green spaces and dotted with belle époche buildings and grand squares, Alexandria has a cosmopolitan charm that attracts countless tourists from all over the world during the summer months.

In early 2014, a major mixed-use development, CityLight, is set to enter the market. Spanning approximately 23,000 square metres, the project includes 9 residential towers as well as a 75,000 square metre mall, Alexandria’s largest mall to be.

Set in the neighbourhood of Sidi Bishr in Alexandria’s leafy Montazah District, CityLight enjoys a favourable position just minutes from Alexandria’s corniche and is surrounded by four main streets: Moustafa Kamel St., Amin Hassouna St., El-Madina El-Monawara St. and El-Nakhil St.

The residential towers are arranged in a U-shape and offer over 1,100 apartments and duplexes, featuring flexible designs in sizes ranging from 90 square metres to 205 square metres. Residents can enjoy five swimming pools, several landscaped areas as well as health and beauty centres. Additional amenities and services include a hypermarket, banks and exchange offices, intercom and internet, 24-hour security service, an international hospital as well as hotel services.

CityLight mall is the retail and leisure component of the CityLight complex and provides a range of shopping and entertainment experiences. The 350-store shopping centre will feature a mix of renowned international and local brands, a 10,000 square metre Carrefour hypermarket on the ground floor, in addition to a broad range of clothing, sports, furniture,

children and jewellery stores.

Food and beverage outlets at the mall include high-end international and famous local restaurants, as well as a 2,000 seat food court.

With regards to entertainment, the mall has a cinema and Fun City for children and adults alike. Covering an area of roughly 2,500 metres, the cinema complex has four display screens and will be equipped with the latest audiovisual techniques.

CityLight’s 2,500 metre entertainment park Fun City includes the city’s newest family entertainment games and is designed to meet the needs of all ages.

In order to ease the influx of visitors to CityLight’s commercial centre, the complex has five entrances and exits on three different main streets and offers parking for 3,000 cars. Other CityLight Centre services include prayer rooms, security, and baby changing rooms.

To date, around 70 per cent of the total units have been sold l

CITYLIGHT ALExANDRIAHome to Alexandria’s largest shopping mall and offering over 1,100 residential units, CityLight is considered to be the first integrated urban development project of its kind in Egypt’s Mediterranean coastal city.

Project Name: CityLight

City: Alexandria, Egypt

Property type: Mixed-use

Number of Units: 1,100

Completion Date: Q1, 2014

Developer: CityLight, www.citylight1.com

CityLight, Actual site photo


Egypt’s online community is growing, and with it the percentage of the country’s online browsers and shoppers is increasing. According to

the Egyptian Ministry of Communications, in 2010 only about 20 per cent of Egyptians were online, while in 2012, this figure sits at 32 per cent. Egypt has a large population of over 80 million, with 50 per cent of citizens below the age 40 years. Strong demographics coupled with a growing middle class and increasing consumer demand have also instigated the need for online shopping and browsing platforms.

Within the furniture and home design industry, e-commerce is still in its emerging stages in Egypt. Part of the reason for this lies in the fact that due to the bulky nature of many furniture items, potential customers prefer to visit physical shops themselves to view the products; a process which has

been made significantly easier by The Design Street (TDS).Launched by Webcom Media Portals in 2010, TDS introduced an entirely

new concept to its online furniture shopping/browsing scene. The first kind of its platform in Egypt, TDS “offers top local and international furniture designers the chance to showcase their wares to the world while simultaneously giving the art lover and the buyer the opportunity to exchange ideas about the art and design from the comfort of their couch.” (TDS)

The idea of bringing TheDesignStreet.com to life was a response to an increase in home ownership in Egypt over the past five years, followed by the need to furnish these homes while putting aside the endless driving hours, the company said. “Our aim was to showcase what international

INTERIOR DESIGN

REVoLUTIoN IN EGYPT’S HomE DESIGN SCENCEThe country’s first online furniture portal adds a new dimension to the local interior design market and beyond while putting the fun back into furnishing


INTERIOR DESIGN

and local furniture and accessories brands have to offer. With a click of a button the world of home and design is at your fingertips,” said Dima Abdel Meguid, Portal Manager at TDS.

TDS is a user-friendly platform that is both informative and engaging, featuring the top design trends, products and brands as well as insightful tips and opinions by design experts, the company says. “Each product and brand comes with a wealth of details to ensure the shopping experience is as tangible as possible. You’ll find everything you need to know, from product description, price, colours and dimensions, to related products and special offers.”

TDS also has a sales department for any enquires customers may have as well as a dedicated news and events section , providing designers with an online community in which to exchange ideas, reach out to potential clients as well as to better understand and serve their market. “Essentially, it works as a quality and ideas catalyst, injecting the Egyptian market with the added values it needs and deserves,” TDS said.

Furthermore, the online portal is also fully integrated with all popular social media sites, allowing customers to keep track of all the design happenings on their facebook and twitter pages as well as to communicate

directly with the team at TDS and the featured designers.In an effort to empower the Egyptian furniture and design industry, TDS

has teamed up with Emaar Misr, the wholly owned subsidiary of global property developer Emaar Properties. As part of their collaboration, the team has created a special ‘Made in Egypt’ initiative.

“’Made in Egypt’ is an ongoing project, a section targeting local and international markets to explore Egyptian made designs and products while highlighting the unique qualities the Egyptian furniture industry has to offer,” TDS said.

The ‘Made in Egypt’ online initiative offers top local designers the chance to showcase their wares to the world in a special section on TDS platform. In turn, art lovers and buyers are given the opportunity to exchange ideas about Egyptian art and design from the comfort of their couch and facilitating business opportunities for Egyptian manufacturers in foreign markets. Essentially, ‘Made in Egypt’ puts local designs into focus and displays the exquisite work of local talent via The Design Street’s online platform, the team said.

In October last year, the collaboration between TDS and the developer Emaar led to a successful interior design project. “The concept was about


INTERIOR DESIGN

furnishing one of Emaar’s townhouses with products on TheDesignStreet that are strictly Made in Egypt, hence showcasing the final look of a fully furnished home in Emaar and also promoting the Egyptian designers and products in town,” Abdel Meguid said.

With regards to the nature of local design, Egypt has experienced a shift over recent years. Moving away from purely traditional craftsmanship that focused on elaborate decorations, intricate carvings and richly patterned fabric, today’s designers infuse their products with more modern elements. In home furniture this is evident in items such as sofas, dining tables, and beds and bathrooms for example, where designs are more modern with round curvy edges, Abdel Meguid said.

“There are also very famous designers and shops in Egypt who only design Arabian styles. However when it comes to home and fashion accessories there is a very new and big market of traditional designs with Arabic calligraphy that has taken a big role in Egyptian designs over the past 3 years,” she added.

Apart from providing a boost to the Egyptian home design industry, TDS is about easing the overall furniture shopping experience. Its core concept is about putting the fun back into furnishing through showcasing the best the home design world has to offer in one place, from the comfort of the couch.

“TheDesignStreet.com is a pull strategy meaning showrooms do not sell online however it drives customers to visit the store themselves and get a better idea and have a wider scope of exploring their options. Online shopping is definitely growing in the market but at a very slow rate at the moment,” TDS concluded l


EVENT

Cityscape Egypt 2012A review of Egypt’s largest real estate investment and development eventThe inaugural Cityscape Egypt in association with Next Move, officially the largest real estate investment and development event in Egypt, opened its doors for the first time from 20 - 23 February 2012 giving participants’ access to one of the region’s largest real estate markets.

With a clear mix of B2B and B2C visitors, Cityscape Egypt showcased the country’s appeal to investors and real estate professionals from around the world, and was overwhelmingly acknowledged as huge success with over 10,000 participants.

The major aim of the event was to support Egypt’s promising real estate market and inject confidence back into this vital economic sector. During the course of the four-day event, local and international visitors took the opportunity to obtain a true understanding of the current dynamics of the Egyptian real estate market.

Egypt Real Estate Summit 2012As part of the event, the first ever Egypt Real Estate Summit gathered 300 delegates over the course of 3 days, featuring numerous presentations, panel discussions and workshop opportunities. Highlights included a special address from Prof. Dr. Eng. Mohamed El-Baradei, Minister of Housing, Utilities and Urban Planning who inaugurated proceedings at the first day of conferences, followed by a keynote address from Mrs Neveen El Shafei, Vice Chairman of the General Authority for Investment.

Cityscape Egypt in association with Next Move offered an unparalleled opportunity to meet and establish relationships with key players in the industry.In addition to the unique discussion and learning experiences offered at the Middle East Real Estate Summit, Cityscape Egypt 2012 was accompanied by the Retail City Conference and the prestigious Cityscape Awards for Real Estate.

“The launch of Cityscape Egypt in 2012 came at a time of dramatic change for the real estate industry and the country. It was a fantastic opportunity that brought all the players in the market together to find a way forward and show how they can adapt. I wish we could have more than one event a year.”

Ibrahim El missiri, Director of Development, madinat Nasr Housing and Development, Egypt

“To put together such an extensive Real Estate Summit and showcase so many excellent projects is difficult at the best of times. To do it a year after a revolution and in the middle of a financial crisis

is just extraordinary. With Cityscape Egypt 2012, Informa once again showed why they are the pre-eminent event producers in this field.”

Daniel broby, Deputy CEO, Silk Invest, UK


Cityscape Egypt 2013

28 – 31 March, Cairo International Convention and Exhibition Centre

Capitalising on the outstanding real estate investment and development opportunities in Egypt, Cityscape Egypt 2013 will for the second time bring together the entire spectrum of real estate professionals and high net worth individuals to:

• Conduct business in a professional and structured environment• View projects from those developers making headlines• Discuss strategies to develop and regulate the real estate industry• Meet private and institutional investors actively seeking to invest in the Egyptian real estate market• Create profitable and transparent joint venture partnerships

Serving both business and private interests, Cityscape Egypt truly offers a first class opportunity to access one of the most dynamic markets in the world.

Egypt Real Estate Summit 2013As part of Cityscape Egypt 2013, the second Egypt Real Estate Summit will once again bring together influential leaders from government, real estate developers, investors, financiers and professional consultants to discuss the sector’s development, identify opportunities and carve strategies for capitalising on the country’s real estate growth.

As the biggest and most influential meeting point for the Egyptian and international real estate community, the Egypt Real Estate Summit provides participants with vital information and contacts to build the business case for investing in the Egyptian real estate market, to develop a robust strategy through in-depth analysis of the country’s major asset classes and to engage with a powerful network of regional and international contacts to access the latest lucrative opportunities.

EVENT

“In the current market, the key to success is proactive dialogue between financiers, developers, lenders, contractors and end users. Cityscape provides an excellent forum for this dialogue.”

George Traub, Managing Director, Head of Real Estate Group - Middle East, macquarie Capital Advisers

“We are very keen to participate in the Cityscape Egypt Exhibition scheduled next year. We at Citystars Properties

would like to assert our role of building state-of-the-art mixed use developments, and we look forward to Egypt’s prosperous

future.”

mahmoud khorshed, Senior Media & Exhibitions Executive, Citystars Properties


Tourism in oman

Blessed with fascinating natural beauty and supported by increasing infrastructure improvement in the region, Oman is realising its immense potential to evolve into a major tourist destination. Now, time is ripe to invest in the Sultanate’s hospitality sector.

Spotlight on Albania

Over the next few years, the Balkan state is expected to increasingly attract foreign direct investment, especially in the tourism sector, as its economy outperforms the economy of any of its neighbouring countries, making Albania South East Europe’s best performing growth market.

Brazil

Predicted to become the world’s 4th major economy by 2025 and home to a growing middle class, Brazil is ripe for investment, particularly in the real estate sector. In times of global economic turmoil, the South American nation retains a highly desired imbalance between supply and demand, combined with affordable land prices and currently has an annual house price growth rate of 23%.

Special Focus: Australia

With a growth forecast double the global rate by 2025 and strengthening cultural ties between the Middle East and Australia, the land down under presents attractive investment opportunities to GCC investors.

Architecture

In line with a recently emerging impulse to represent global cities through unique architectural designs, Barcelona- based architecture and design studio DNA Architects delivers unique design concepts through merging organic forms of nature with specific urban concepts and different social and cultural realities.

Turkey – Special Supplement

Fuelled by a sustainable economic expansion over the past decade, Turkey has seen its real estate markets boom as hundreds of new housing projects have mushroomed across the country. A recently passed bill allowing land ownership by foreigners has placed Turkish housing markets on the radar of foreign investors, who would like to benefit from a high demand and increasing property value.

IN THE NEXT EDITION

Discover the new Cityscape magazine From October onwards, discover the new format of Cityscape magazine, now published bi-monthly across the MENA region. The new Cityscape magazine will look at thriving real estate markets from across the globe and highlight investment opportunities in some of the world’s most appealing markets. Each edition will contain regular features on architecture, retail and sustainability while a Middle East real estate industry section provides insight into current trends and hot topics in the region.

october Editorial HighlightsIn addition to covering a range of highly attractive real estate markets worldwide, the October edition features an exciting Turkey supplement produced in line with Cityscape Global’s ‘Country of Honour’ program. Each year, Cityscape Global puts the spotlight on one real estate market that stands out as a result of strong real estate fundamentals, vision and best practices. For 2012, Turkey has been appointed as ‘Country of Honour.’