“The real estate market has witnessed worrying developments that threaten appetite to invest in the industry,” the Egyptian Businessmen’s Association (EBA) said in a letter to Prime Minister Moustafa Madbouly seen by EnterpriseAM. Referring to a recent decision by the Madbouly government to impose new levies on land owned by developers on the Cairo-Alexandria Desert Highway and North Coast, the association added that the new levies also “impact the trust built over many years between the state and investors in this vital sector.”

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ICYMI- Developers recently received surprise letters from the New Urban Communities Authority demanding levies, which included an “improvement fee” for developers who own land or projects going back up to 7km on either side of the desert road to pay up to EGP 1.5k per sqm, a 10% transfer fee on North Coast projects in the event that the land owner is not the real estate developer, and a three-month deadline for non-compliant developers to obtain the required construction licenses or lose rights to use the land.

The surprise fees have led to “a state of concussion and anxiety among investors and developers,” the EBA argues. The association said the decision to impose an “improvement fee” on desert road projects as a retroactive decision “contradicts the principles of stable investment policies.” It also described the decision to calculate the North Coast transfer fee based on current assessed land value — and not the price at the time of purchase or contracting — as “doubling unexpected burdens.” The three-month deadline to sort out construction licenses was also critiqued for not “taking into account the complex timeline for issuing decisions and licenses, especially given well-known bureaucratic challenges.”

The EBA called for the changes to only apply to future projects, so as to shield existing and underway projects from the retroactive decisions. The association talked up its support for efforts to regulate the real estate market and called for a meeting between developers, relevant ministers, and other officials to “contain the situation before its effects on the sector worsen.”

IN OTHER REAL ESTATE NEWS-

#1- NUCA is looking to bump the price per sqm at which it offers land in its next sale of ready-to-deliver residential plots in some 20 governorates, Al Arabiya reports, citing what it says are officials at the New Urban Communities Authority.

#2- Our friends at SODIC launched the first overseas branch of Michelin-recognized Portuguese restaurant Cavalariça at its North Coast project June, the real estate developer said in a statement (pdf). The move is part of SODIC’s broader push into lifestyle and hospitality, joining Dubai’s Surf Club and Nobu projects.

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