Another hit to the real estate sector: New fees extended to developments along the Dabaa Axis

Real estate players can’t seem to catch a break: Real estate developments and land designated for urban use along the Dabaa Axis — from its intersection with the Cairo-Alexandria Desert Road to the Middle Ring Road — are now subject to fresh fees, according to a document seen by EnterpriseAM.

The details: Land alongside the Dabaa Axis is now subject to the same levies imposed on projects along the Cairo-Alex Desert Road:

• EGP 500 per sqm for land between 3-7 km back from the highway;;
• EGP 750 per sqm for land between 1-3 km back;
• EGP 1.5k per sqm for land within 1 km of the axis.

Agricultural land gets hit too: Land designated for agricultural activity along both the Desert Road and the Wadi El Natrun-Alamein Road will now be subject to EGP 15k per feddan improvement fee.

We have an idea what developers think of these new developments: “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 earlier this week following the introduction of similar fees on land on the Cairo-Alexandria Desert Highway and North Coast.

Flexible payment terms, but no exemptions: Developers will need to pay 50% of the fees upfront, with the remainder to be paid over three years, interest-free. Sources told EnterpriseAM that local authorities have notified all developers — including foreign players — in the impacted areas that no exemptions will be granted.

REMEMBER- New fees on land on the Cairo-Alex Desert Road and North Coast caught developers off guard last week. The New Urban Communities Authority imposed similar tiered fees and a 10% transfer fee on North Coast developments, sparking pushback from real estate players who said the measures added pressure amid current economic difficulties facing the sector.