For investors, the Egyptian property market currently has two faces. First, there are a growing range of options on the outskirts of Cairo for middle-income earners; second, a number of high-end residential or resort-style properties are aiming at the overseas investment market.
What's interesting, however, is that Gulf investors are no longer confining their activities to the high end of the market. Emaar Misr for Development SAE, a subsidiary of Emaar Properties, has previously released relatively high-end projects. Its Uptown Cairo residential development and Marassi beach resort project are both on schedule, according to the developer.
However, in February Emaar Misr launched its third residential project, the Dh3.75 billion Mivida community in New Cairo City, which will comprise compact residences ideal for small families.
Aimed at the mid-range market, the 3.8 million m² project will include a business park, retail space, landscaped parks, healthcare facilities, schools and hospitality components, all in close proximity to the residential area.
"The launch of Mivida underscores our long-term commitment and confidence in the real estate market in Egypt," says Sameh Muhtadi, CEO of Emaar Misr. "We strongly believe that the fundamentals of the market are robust and continue to present an attractive investment opportunity for the local and international markets." Mid-range focus
Mivida will comprise 5,000 apartments, townhomes and villas, with sizes starting from 230m². These will include three- to five-bedroom villas and two- to three-bedroom townhomes. Units will come with air-conditioning, furnished bathrooms and kitchen cabinets. According to Emaar, sales will start shortly.
The development will be a 20-minute drive from the Cairo International Airport, 1.5km from the American University and will include a 30-acre central park and 222 acres of smaller parks.
"By offering world-class, well-designed units that suit smaller families, we are offering customers who value quality homes in an integrated community," says Muhtadi. "The construction of the business park and other infrastructure work is already under way and master-planning has been completed."
Units will come in four styles: Santa Barbara, Tuscan, Mediterranean and Andalusia, all conceived by Californian designers. "The highlight of Mivida is its Santa Barbara California style ambience designed by international architects and featuring a mix of elegant villas and apartments designed in various architectural styles," says Mohammad Anwar El Moshneb, senior director of development, Emaar International.
"The homes are designed to optimise on every square metre of land, and thus give more comfort and space for residents. The villas feature high ceilings, tiled roofs, arcades and inside courtyards."
A study this year by the Global Property Guide found that prime inner-city properties in Cairo average $574 (about Dh2,100)/m², the cheapest of the 91 international cities it polled. The report found that a property in Cairo is likely to offer a rental yield of 12% the highest of the locations surveyed. Egyptian-based Palm Hill Developers (PHD) recently described the country's real estate industry as "highly fragmented", in that only a few developers command a modest market share. Announcing its 2008 profits, PHD said its strategic corporate focus was "diversifying the customer base and penetrating the middle income market segment," an indication of where the market is growing.
The developer will soon launch three new housing projects in and around Cairo where 80% of the units would be valued at less than Dh1 million.
"While the uncertainty in the global economy has clearly impacted investor sentiment in the Egyptian marketplace, the underlying, long-term fundamentals of the real estate market remain intact," the firm said.
Global investment banking firm Goldman Sachs predicts year-on-year GDP growth of more than 5% in the medium- to long-term. Yet The Economist Intelligence Unit found that real GDP growth slowed to 4.1% year on year in the second quarter of 2008-09, down from 5.8% in the first quarter. It noted that growth remains buoyant in the construction sector.
Egypt's beachside areas continue to attract foreign visitors and investors, despite the global financial downturn and sporadic attacks on tourists in the country. The Egyptian Travel Agencies Association predicts a 6% increase of foreign tourists in the next four years, although this is down from 16.6% over the past four years.
Emaar's Dh3.4 billion Marassi resort development will occupy a beachfront strip on the Mediterranean Coast. The 6.25 million m² gated community will include a beach resort, marina, golf course and hotels, surrounded by waterways and landscaped gardens. The project will include the second edition of the Armani Residences (the first joint venture between Emaar and Armani in Burj Dubai). These will comprise three- and four-bedroom villas, all with views of the Mediterranean Sea.
Meanwhile, Dubai-based Hamptons International has announced that it is to partner with Egyptian developer Kimidar Group to act as the agent for the Golden Park Resort & Spa in Hurghada, on the Red Sea Riviera.
With prices starting at $60,000 (Dh220,000), the resort features apartments, villas, and duplex villas set in landscaped gardens. Partly complete, 40% of the resort is yet to be finished. Hurghada is a popular tourist area noted for its beaches, scuba diving sites and nightlife.
Managing director of Hamptons International, Middle East Nasser Abdul Rahman Rafi says the project is a safe investment. "With the resort already 60% complete, it represents a secure investment in an off-plan environment." Located in Golden 5 City, where there are seven existing hotels, Golden Park residents will have access to an established resort community.
"The unique location in Hurghada, the world-class diving and the lifestyle amenities will suit the requirements of residential tourism clients, which continues to grow led by the potential for tourism offered by Egypt," says Abdul Rahman Rafi. "A key emerging market in North Africa, Egypt promotes residential property sector through investor-friendly legislations including safe title deeds. "With current estimates of 20% per annum capital appreciation, properties by the Red Sea also assure excellent rental yields and long-term value. Each owner is offered a fully furnished home with a guaranteed rental of 7% for at least five years." Hamptons can help homebuyers finance the purchase of a property, with loans of up to 70% available, according to its website.
In addition to projects like Marassi and Golden Park, other developers are trying to entice foreign investors.
Swiss-based Orascom Development, the developer of the El Gouna resort on the Red Sea Riviera, has announced it will pay buyers a return of 3.25% if they are prepared to pay for their property upfront rather than in stages. Close to Hurghada, El Gouna is an established 9,000-acre resort with 14 hotels, more than 2,000 villas and apartments, an 18-hole golf course, a marina and many shops and restaurants.
The next phase of development is Ancient Sands Golf Resort, a 650-acre site centred on a golf course. Orascom and IFB Resort Developers are planning 700 villas and apartments at the upcoming resort. These will be low-rise, no higher than three storeys, Nubian-style residences with domed roofs, towers and terraced galleries. The first phase of 259 units is due to be completed in 2011. In its pre-launch offer, prices for studios started at Dh585,000, one-bedroom apartments started at Dh770,000, two-bedrooms at Dh1 million and two-bedroom townhouses at Dh1.7 million.
Buyers are required to put down 20% of the purchase price upfront, 20% after six months and the remainder on completion. Homebuyers become members of the golf course, get a one-year membership of a concierge service and can take part in a rental scheme.
However, potential buy-to-let investors should take note that many Red Sea Resorts have occupancies of 40%. Although this may pick up in the long-term, it's essential to do your research before investing.
