Egypt is working hard to push real estate exports: The government has been preparing an initiative to accelerate real estate exports amid efforts to draw more USD inflows. Industry insiders who spoke to Enterprise weighed in on how Egypt can boost real estate exports. However, several real estate developers voiced reservations regarding the government’s approach at a recent cabinet discussion, participants told Enterprise.

Developers want their share in FX too: The proposed real estate export initiative would allow non-residents to own homes by paying 100% of the property price in FX upfront to the Finance Ministry in exchange for an equivalent bank deposit that would be refunded after ten years. Under the scheme, developers would get paid by the government in local currency, to which a lot of them voiced their objection, saying that they need hard currency to cover the cost of input imports.

Here’s the lowdown on how Egypt can attract more non-resident buyers to its real estate market:

#1- Government support is a must for successful real estate export, Association of Developers of New Cairo Chairman Mohamed Albostany told us, adding that the sector requires more financial and procedural support from the state to flourish. Real estate developers are currently facing significant financing pressures and need soft financing to deliver their projects and have them ready for real estate export initiatives, Albostany said.

#2- Could PPP be the key to increasing real estate exports? Egypt registers less than USD1 bn on average in annual real estate exports, the Federation of Egyptian Industries Real Estate Development Chamber head Tarek Shoukry told Enterprise. Egypt could increase this figure to USD 3-4 bn per year if it doubled down on public-private partnerships, Shoukry said.

#3- Looking at Egypt's large number of migrants: Reaching Egypt’s real estate export goals should not be difficult, Shoukry thinks. The government should look into easing citizenship laws to lure in investments from the 9 mn foreigners Egypt hosts.

The gov’t has already eased citizenship requirements for investors, whereby the latter can now obtain citizenship in exchange for buying a USD 300k home, down from USD 500k, per recent amendments to the citizenship by investment program. Meanwhile, investors can also obtain citizenship in exchange for making a USD 350k investment in a project, down from USD 400k. Investors are also no longer required to own 40% of the project.

#4- Int’l students are a key target market that could be drawn in quickly, Real Estate Development Division member and Ammar Real Estate Group Chairwoman Abeer Essam told us, noting that Egypt has some 26k foreign students.

#5- The growth of outsourcing services is a boon: Egypt could capitalize on the significant growth it sees in the outsourcing sector — which is driven by a high percentage of education youth and a weaker EGP — as more companies from Europe, the Gulf, and the US open new back offices and "kitchens" in Egypt, Redcon Properties Chairman Tarek El Gamal said on the sidelines of a sessionheld recently by the cabinet's Information and Decision Support Center's intellectual forum. This growth will help facilitate real estate exports, he thinks.

#6- The greener, the better: The expansion of green administrative buildings would lure more companies to open new back offices in Egypt, as they cut operating costs by 30-40%, El Gamal said.

#7- Retirement tourism: The government is gearing up to launch a marketing campaign for retirement tourism in the near future, Deputy Housing Minister for Technical Affairs Abdul Khaleq Ibrahim told Enterprise, adding that security and stability in Egypt would make it conducive for this kind of tourism, which, in turn, would bolster real estate exports.

#8- Attracting real estate funds: Egypt is studying the introduction of incentives to help attract real estate funds to the country, Mortgage Finance Fund Head Mai Abdel Hamid told us.

#9- Could the real estate exchange facilitate real estate exports? Egypt is working on a real estate exchange, which could launch as early as 1H 2024, Ayman Taha, the media advisor to the EGX’s chairman, told us in October.

Efforts to push for new initiatives are already underway: Real Estate Development Chamber at the Federation of Egyptian Industries will submit a list of proposals to the cabinet aimed at boosting real estate exports, the division’s executive director Osama Saad El Din told Al Borsa in a story published yesterday.

The proposals include allowing foreigners and Egyptian expats to enter into USD rent-to-own contracts, the establishment of a company to oversee the sale of real estate to customers abroad, and a new online platform listing units for foreign buyers.

Your top infrastructure stories for the week:

  • African AI center to be based in Egypt: Egypt has inked an agreement with Italy to set up an artificial intelligence research center in Egypt this year to serve African countries.
  • USD 297 mn steel plant to be built in Sokhna: Chinese steel maker Wu’an Xin Feng will set up a USD 297 mn plant in the Sokhna Industrial Zone after the Suez Canal Economic Zone (SCZone) allocated the steel maker a 750k sqm land plot under an usufruct agreement.
  • Tahya Misr 1 container terminal to come online in 2025: The Tahya Misr 1 container terminal will kick off operations in April 2025, Prime Minister Moustafa Madbouly said during his visit to the port this week. The terminal will add 3.5 mn container capacity to the port.
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