There is nothing like having a favourable currency situation to get overseas buyer interest streaming in — Egypt’s developers could soon find they could be in for such an upturn.
“All of the leading developers in the country are continuing with their ongoing projects even though in local currency teams the pound has weakened,” said Zeyad Tarek Al Beshry, General Manager — Development at Al-Futtaim Group Real Estate, which is currently overseeing Cairo Festival City, a 20 billion plus Egyptian pound master-development. “If at all there has been any inactivity, it is largely confined to the smaller developers.”
It was last November that Egypt decided to allow a free float of the currency, cutting the value of the pound by half in the process. It then set off a rush of global funds wanting to come in and buy up the currency, so much so that the Egyptian pound was the best performing currency this year.
But outside of institutional funds, are property buyers turning up as well to the party? “I would assume so — when a high-end villa with a price of $500,000 suddenly becomes $250,000, it will have to stoke interest from overseas,” said Al Beshry. “It’s a matter of time.
“But for developers, it will mean re-evaluating the cost of operations and make changes accordingly. But the market is bound to respond positively when overseas buyers start pushing in.”
As in Dubai, Al-Futtaim Real Estate is building a mixed-use destination anchored by a mega mall. Cairo Festival City, which has a 186,000 square metre gross leasable area, has been operational since 2013. On the mall side, it is now proceeding with the “design and paperwork” to expand this by an additional 20,000 square metres of leasable area. The mall currently pulls in 20 million plus visitors a year.
“Our location is prime, being at the beginning of the 5th Settlement, which is part of New Cairo,” said Al Beshry. “The 5th Settlement itself is in full development mode. By expanding all the elements of Cairo Festival City, we have many opportunities to benefit in the coming years.” (City planners have conceptualised the 5th Settlement as one of the posher districts of New Cairo.) “We should be in a position to complete well over 70 per cent of the master-development by 2019, which is as per the understanding we have with the government.”
It will also mean more of commercial and residential options. It currently hosts four office buildings, geared towards meeting the leasing needs of the bigger tenants. It is building another set, which is currently more than 50 per cent done. In the pipeline is the “Podium”, a cluster of six buildings offering 60,000 square metres of leasable area, but more for the needs of small and mid-sized enterprises.
“We also have three automobile showrooms, along the lines of what we have in Dubai,” said Al Beshry. “There are another two pieces of land where similar projects could be pursued, maybe in 2018-19.”