Egypt’s New Urban Communities Authority (NUCA) is recently growing 61 new cities on an area of about 3.25 feddan, as per Waleed Abbas, Assistant Housing Minister for Community Affairs at the authority.
The new developments show 1.5% of Egypt’s whole area, Abbas also provided.
The Assistant Housing Minister’s remarks came during a seminar entitled “Egypt’s Real Estate Market: Modelling Resilience amid Crisis”, held by the American Chamber of Commerce (AmCham) in Egypt on Wednesday.
“We have started construction works in 17 cities, and have completed 90% of the first phase development of fourth-generation cities,” he added, “The first phase’s total area is estimated at 580,000 feddans, and accommodates 30m citizens, whilst providing thousands of job opportunities.”
He explained that in 2019 the government began the development of 14 new cities, adding, “We have completed 20% of eight new cities with the aim of attracting new investment in Egypt’s property sector, and indeed we have succeeded in that, especially in the New Administrative Capital (NAC).”
Abbas said that the NAC is going through significant and unparalleled achievements, with 85% to 90% of its initial phase utilities and framework completed.
He showed that NUCA has made the initial offering of an in-kind and money share system with a real estate developer at the New Alamein City.
Abbas continued that the offering contains eight plots of land with lands ranging between 24 and 56 feddans, with a total of about 270 feddans. He provided that the offering, which provides 200,000 direct and indirect job opportunities, goals to build integrated urban projects with a total investment worth EGP 30bn.
He said that investor applications will be received from 8-15 February at the NUCA’s headquarters.
“After the request is approved, the investor has to pay 10% of NUCA’s total share within 60 days from the date of issuing the financial claim,” he added.
The Ministry of Housing, Utilities and Urban Communities provides and builds facilities and advantages for builders to launch businesses and invest in new urban communities. This leads to new job opportunities, which motivates people to accommodate and live in these new cities, he provided.
For his part, Ayman Sami, JLL’s Country Head for Egypt, provided that property owners in central and west Cairo have been more generous with lease rates and terms and that prime rents in New Cairo have stayed relatively static.
Sami added that tenants now pick smaller fitted-out stores of about 100sqm-300sqm, with online businesses also replacing office space as e-commerce expands.
He said that Egypt’s rental market demand lasted resilient, mainly towards the second half (H2) of 2020, and that he awaits the demand for housing to slow down in the short term mainly in the mid-to-high end segment.
Furthermore, Sami pointed out, “We [JLL] remain optimistic in our outlook for Cairo’s residential market in the medium to long term, as the government strongly supports the sector.”
Ahmed Issa, CEO of Retail Banking at CIB, said that Egyptian banks have done a nice job of providing funds to support the local real estate industry.
Issa added that “CIB is one of the most important banks in financing property in Egypt, through its allocation of a huge amount of money in supporting the sector”.
He noted, “In 2020, our lending to the household sector in Egypt grew by about EGP 8bn, out of which EGP 2bn of the funds were allocated to individuals to buy their own units.”
Tarek Fahmy, CEO and Managing Director of the AI Tawfik Leasing Company, said that the non-banking financial sector could give many solutions to financing real estate and developers, and also the buyers.
Fahmy said that activating the role of loans finance companies will eradicate financing pressures from the responsibility of developers. This is mainly because of their taking over the financing provided to customers to purchase unit by instalments over long payment terms.