What does the National Smart Cities Strategy mean for urban development? The Madbouly government last month unveiled the country’s National Smart Cities Strategy, sparking a new wave of real estate development, with a focus on sustainability, urban modernization, and improved quality of life for residents. But what does it all mean for urban development and the real estate sector?

First things first, what makes a city smart? A smart city is one that operates using intelligent methods and strategies to improve residents’ quality of life, strengthen the economy, solve social challenges, and preserve the environment and its resources. This is achieved by leveraging the latest technologies. Smart cities rely on data analysis to optimize resources, improve road quality, regulate traffic, and enhance utilities and other services.

Smart cities need to follow international standards in communication, housing, solid waste management, safety, urban planning, governance, energy, environment, and much more.

National Smart Cities Strategy? Launched in November during the World Urban Forum, the strategy is a “comprehensive roadmap designed to transform Egypt’s urban landscape and propel the country towards a more sustainable, equitable, and technologically advanced future.” The strategy aims to position Egypt as a “global leader in smart city development.”

The strategy puts a lot of weight on private projects as it comes during a time when the state is working to step away from national projects — for the coming fiscal year state-funded investments will focus on ongoing national projects that are at least 70% complete and expected to enter the operational phase within a year or two at most. New national projects will also only get funding if they get the go-ahead from the cabinet.

We’re no strangers to smart cities: Egypt already houses 22 smart cities, including fourth-generation cities such as the new capital, New Alamein, Galala, and New Mansoura, one government source in the housing sector told EnterpriseAM. He explained that the state aims to push the number of smart cities to 37 nationwide.

The global drive for smart cities: Smart cities are gaining momentum worldwide, as they present a more environmentally friendly alternative to urban areas which make up 60-80% of global energy consumption and over 70% of annual carbon emissions. Tech spending on smart cities more than doubled between 2018 and 2023, jumping from USD 81 bn to USD 189.5 bn, according to data from Statista.

A growing market: The global smart cities market was valued at USD 998.7 bn in 2022 and is expected to reach USD 5.2 tn by 2030, according to a 2024 global strategic business reporton smart cities.

Smart cities are an intricate web that utilize ICT and smart applications to improve the quality of life of its citizens, our source said, explaining that it is about a lot more than infrastructure and green spaces.

5G and advanced technologies enable infrastructure development: The entrance of 5G services into the Egyptian market has opened the door for real estate developers to utilize tech in their developments, head of the Federation of Egyptian Industries’ (FEI) real estate division, Osama Saad El Din, told EnterpriseAM. Other developers have started using AI in their projects.

What does an AI-reliant project look like? “We have a compound that relies on AI in the new capital. We use AI to control energy consumption, water consumption, security systems, and maintenance, among other things that help raise the efficiency of the area,” Chairman of Sigma for Smart Cities Ahmed El Zayat told us.

In line with sustainability goals: The strategy also aims to cut down on the consumption of energy and water and improve the use of resources, which will have a direct impact on enhancing air quality and public health. The strategy aims to raise the efficiency of public services all with the aim of improving the quality of life.

It’s about more than just technology: The development of smart cities largely relies on specific construction standards that help reduce emissions and energy use in homes, head of the Federation of Egyptian Industries’ Refractories and Bricks division Ali Singer told EnterpriseAM. He pointed to the use of clay bricks in construction and how they can provide thermal resistance.

Looking ahead: The government is currently holding meetings with inventors who have patents for energy-efficient, low-investment construction designs including those that reflect sunlight, reducing the need for air conditioning. These designs also ensure regular airflow into units and focus on building materials suitable for the Egyptian environment, Saad El Din added. “We have started working on consultancy offices on new smart designs,” he said, adding that “we will soon start developing workshops for real estate developers to push them to adopt smart construction.”

Don’t worry — smarter cities won’t come with a higher price tag, Saad El Din told us, explaining that the main goal is to utilize sustainable materials and minimize costs.

Just scratching the surface: Over the next few years, Egypt will enter the era of the Internet of Things in smart cities and we’ll see cities using platforms to tie all their facilities together, El Zayat said, adding that this will increase the efficiency of infrastructure networks and cut down on maintenance costs.

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