Invest-Gate Magazine, August 2017 Issue by Invest-Gate

REAL ESTATE NEWS, REPORTING & ANALYSIS

AUGUST 2017 - 48 Pages - Issue 5

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CBE LAUNCHES INITIATIVES TO BOLSTER

REAL ESTATE, TOURISM SECTORS

DORRA DEVELOPMENTS ONCE AGAIN BREAKS THROUGH THE COMMERCIAL PROPERTY MARKET WITH THE COURTYARD MAXIM DEVELOPMENTS SEEN OFFERING HIGH-END, EXCLUSIVE RESIDENTIAL PROJECTS EBRD’S HECKMAN UPBEAT ON EGYPT’S INVESTMENT CLIMATE

CONSTRUCTION COSTS TO FURTHER ESCALATE ON FUEL PRICE HIKES ALCHEMY ASPIRES TO NEW WAYS OF LIVING

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Your Greek home in Marassi Situated on a hilltop, the Greek village brings Santorini to your Marassi summer home, offering unprecedented simplicity in the midst of its exceptional beauty. The Greek village architecture uniquely offers Santoriniâ&#x20AC;&#x2122;s ornamental blue and white domes, with colorful doors and Gardenia flowers, with that comes a laid back, casual lifestyle that is coupled by inevitable charm and grace.

The Greek Village brings Santorini to your Marassi experience. It offers summer time's much needed get-away with it's unprecedent beauty and simplicity. Positioned on a hiltop to view dazzling panoramas and romantic sunsets, you will walk through charming alleyways jotted with white and blue homes, inspiring a mystic aura that will evoke your senses. Wait for it this beauty is coming your way soon from Emaar.

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ADVERTORIAL

EDITOR’S LETTER General Manager Yasmine El Nahas

WELCOME TO INVEST-GATE Ending our summer season, Invest-Gate continues to explore the latest development and investment updates across Egypt. This time around, we make a stop at Dorra Developments’ The Courtyard before we head to the beach. Invest-Gate sits with Dorra Developments’ Director of Sales Yassin Habib to shed light on the group’s latest mixed-use project, The Courtyard, and how it modernizes the world of office and retail developments in the country. We head off to the North Coast as we continue to look into the many projects that stretch from El-Alamein City to the governorate of Marsa Matrouh. We sit with Maxim Developments Vice President Amr Mohsen to uncover the latest on the BO Sidi Abdel Rahman mega project. In this issue, Invest-Gate examines the changing investment climate of Egypt today, given its fuel price increase and how it affects the world of construction and the real estate sector. Furthermore, we voice Egypt’s major key players of the property market as they view Egypt’s reform plan, mainly the updated Investment Law, and how it affects Egypt’s investment climate. We give a special insight on the world of Alchemy, one of Egypt’s leading architectural and interior design firms. We feature Alchemy Founder Karim Mekhtigian as he presents his

style, vision, and Alchemy’s latest line in design. Approaching the peak of Egypt’s summer season, we visit the varied entertaining venues across the North Coast, presenting a guide to the most top-notch hangouts on the Mediterranean Sea to maximize your summer vacation experience. To complete our guide, Invest-Gate presents the latest takes on vacation home rentals in the North Coast, made easy with a click of a button. As the Voice of Real Estate, Invest-Gate aims to cater all needs from homebuyers to big property investors. We bring you stories covering Egypt’s most interesting and vibrant sector, as it changes under the current economic environment. With the sentiment on Egypt gradually improving, we are delighted to explore how that impacts a favored investment outlet. Have a wonderful summer!

Editor-in-Chief Farah Montasser

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SWAN LAKE NORTH COAST:

WHERE SUMMER MEMORIES ARE WAITING TO HAPPEN

Managing Editor Yasmin El-Beih Associate Editor Menna A. Farouk Staff Writer Julian Nabil Nayrouz Talaat Market Researcher Hagar Magdy Database Executive Taghreed Mounir Operations Manager Nada El-Labban Business Development Director Safaa Abdel Bary

EDITOR-IN-CHIEF

Web Master Ayman Rady Art Director Omar Ghazal

Inside this issue p.18

p.22

p.28

Graphic Designer Ahmed Sabar 3D Visualizer Maged Makram

Maxim Developments Seen Offering High-End, Exclusive Residential Projects

Dorra Developments Once Again EBRD’s Heckman upbeat on Breaks Through The Commercial Egypt’s Investment Climate Property Market with The Courtyard. p.32

p.30

Construction Costs to Further Escalate On Fuel Price Hikes

CBE Launches Initiatives to Bolster Real Estate, Tourism Sectors

p.34

Events and Logistics Manager Abdallah El Gohary Distribution Officer Mahsoub Kenzi Mohamed El-Sayed

IN PARTNERSHIP WITH Similarly, Lagoon 2 is scheduled to be completed by early 2018. It is the largest of the three lagoons in the project, encompassing 26,000 square meters, and almost 85% of its construction activities are currently finished. Earthwork and shaping of the other two lagoons are also in progress.

Egypt’s Real Estate Developers Weigh on New Investment Law No 8

Publisher MOHAMED FOUAD

CURRENTLY AVAILABLE AT VENUES

NEAR YOU ACROSS CAIRO AND THE NORTH COAST

All rights to editorial matters in the newspaper are reserved by Invest-Gate and no article may be reproduced or transmitted in whole or in part by any means without prior written permission from the publisher.

/invest-gate /invest gate /invest.gate_magazine 13D Sherif Salama Street - Takseem El Laselky - New Maadi, Cairo, Egypt Tel.: +202 25164776 +202 25172052 +202 27547569 Fax: +202 25172053 Email: info@invest-gate.me TO ADVERTISE WITH US: marketing@invest-gate.me 00201005186813

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he luxurious beach and an idyllic setting for long-term and short-term retreats alike, Swan Lake North Coast, is determined to deliver its first phase by June 2018. The project is located on serene white sandy beaches of the crystal blue Mediterranean Sea, offering sparkling lagoons and undulating greenery.

has created a bespoke range of interiors in a modern contemporary style to match the architecture of the entire project for exclusive holiday homes and chalets, offering homeowners all the comfort and amenities in a breathtaking setting by the sea. All properties are to be delivered with fullyfinished interiors, kitchen cabinets, and fully-fitted bathrooms. As for phases 2 and 3, concrete works for selected units are currently underway. Construction of cabanas “C” and “D” are in progress, too, to be followed by cabanas “E” and “F”, which are to be built as of this summer. Swan Lake is also preparing a temporary access road to the finished villas and the soon-to-be completed cabanas, cutting through the project with the

planting of permanent roundabouts currently being developed. As part of government plans to improve the national transportation network, Hassan Allam Construction, Hassan Allam Properties’ sister company, is currently building the new CairoAlamein Highway. This national road will run in close proximity to the Swan Lake North Coast and promises to shorten travel times further.

The construction and landscape of the main entrance is completed as well, featuring the project’s main gate. Construction had hit the ground back in mid-November 2015 after obtaining the required approvals to start on site. Since then, more than 2.5 mn cubic meters of sand and natural sand stone were cut, moved, and filled through the entire project area to form the stepped platforms, lagoons shaping, roads, and landscape. This is more than 95% of the total earthwork required. Additionally, the stepped platforms are being stabilized by keystone, with almost 90% of the required keystone works for the project now delivered. Over 110 villas are now completed and are ready for finishing touches. Interior Designer Mohamed Noaman THE VOICE OF REAL ESTATE | 9

NEWS

UPDATE

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EGYPTAIR OPERATES FLIGHTS TO ELALAMEIN AL-FUTTAIM SIGNS DEAL WITH FOUR BANKS TO CONCLUDE PHASE II OF CAIRO FESTIVAL CITY

EgyptAir, the national air carrier, currently operates weekly flights from Cairo to ElAlamein Airport as of July 20, Invest-Gate reports. The airline operates two weekly trips on Thursdays and Saturdays to El-Alamein Airport on the North Coast to encourage inbound tourism, according to the airline’s twitter account. El-Alamein Airport is located on the northern coast of Egypt.

PROJECTS REAL ESTATE DEVELOPMENT LAUNCHES THE -EGP 10BN- BLUES TIFFANY Projects Real Estate Development has announced the launch of its latest Blues Tiffany on the Egyptian North Coast, and has contracted Sabbour Consulting for the supervision and consultancy of the project, Invest-Gate reports. Located in Ras El Hekma, 204 kilometers away from Alexandria and near Marsa Matrouh, Blues Tiffany spans an area of 250 feddan, featuring town houses, standalone villas, and chalets. Projects Real Estate Development Chairman Hossam Bahaa says, “All units at Blues Tiffany are to view the sea.” According to Bahaa, 75% of Blues Tiffany

designs are dedicated to landscape, water features, lagoons, swimming pools, five-star hotels, and a number of dining venues. News about Blues Tiffany was inaccurately reported last month; and Invest-Gate sends its sincere apologies to the Sabbour Consulting firm.

INERTIA ANNOUNCES UPDATES ON JEFAIRA Egyptian real estate company, Inertia, reveals details on a residential project in the North Coast, Invest-Gate reports. The company has launched the first phase of its residential project Jefaira, moving onto the following phases. Stretching over 5.5 mn square meters, Jefaira comprises two- and threebedroom condos, family villas, and twin houses along with chalets and cabins. “Throughout launching phases, we are to remain very much focused on supplying the non-residential components. In addition, the company has joined forces with KarmSolar for Jefaira to be 100% solar energy dependent,” Inertia’s Co-founder Ahmed El Adawy tells Invest-Gate.

PALM HILLS UNVEILS HACIENDA WEST

Inertia is currently promoting Jefaira locally and plans to promote it across the MENA region and Europe very soon. The company offers a seven-year payment plan, with a 10% down payment.

ARDIC TO DELIVER ZIZINIA EL MOSTAKBAL BY 2020

Leading Dubai-based real estate developer, AlFuttaim Properties, signs an agreement with four banks to borrow EGP 125 bn (USD 69.9 mn) and finance part of the second phase of a giant project east of Cairo, InvestGate reports. The company has agreed with the Commercial International Bank (CIB), the Arab African Bank, the Abu Dhabi National Bank, and the Arab Bank to borrow EGP 1.25 bn, Reuters reveals.

project comprises apartment complexes with a total of 45 buildings and 1,800 units. The project also encompasses a certified green building mosque, a medical center, a nursery and a bicycle trail.

With green space and roads representing 50% of the total area of the city, the -70-acre10 | INVEST.GATE | August 2017 - ISSUE 05

Egyptian property developer, Memaar Al Morshedy, unveils a new project in Nasr City, Invest-Gate reports. Spanning a total area of 63,000 square meters, Degla Landmark is an integrated residential commercial project. The project comprises 3,800 units with areas varying from 65 to 158 meters, in addition to a mall, a gym, swimming pools, restaurants, cafes, and retail shops.

EGYPT’S HAVANA REAL ESTATE MARKETS 60% OF HAVANA HILLS PROJECT Cairo-based, Havana Real Estate Developments Company, says it has marketed around 60% of its Havana Hills project in 6th of October City, Reuters reports.

Al-Futtaim Egypt began the construction works of Cairo Festival City back in 2008. The project is established on an area of three mn square meters and includes a commercial center, an administrative area, two hotels, schools, medical institutions, and residential units.

The mini compound project includes about 300 housing units at spaces, ranging between 85 and 220 square metres, as well as various serviced facilities.

NEW GIZA FOR REAL ESTATE DEVELOPMENT UNVEILS GOLDCLIFF PHASE I New Giza for Real Estate Development Company is launching the first phase of a new residential project in New Giza, Egypt, Invest-Gate reports. The first phase of Goldcliff comprises luxury houses and twin villas. Overlooking the Pyramids, the project’s units floor areas vary from 305,000 to 375,000 square meters.

GOV’T TO OFFER 17,000 UNITS AT NEW ADMINISTRATIVE CAPITAL THIS MONTH The government plans to offer 17,000 units at the New Administrative Capital this month, Invest-Gate reports.

Under the Central Bank of Egypt’s (CBE) mortgage finance initiative, banks will provide loans for applicants to finance the purchase of these units if all conditions are applicable. In February 2014, the CBE announced it had allocated EGP 10 bn to providing long-term mortgage financing for low- and middle-income housing units. The bank amended some of the initiative in February 2016 to provide mortgage financing to a new income bracket under the name “average distinctive income”.

Palm Hills Developments is launching a new project in the North Coast, InvestGate reports. Offering a wide variety of unit types varying between 150 and 600 square meters, Hacienda West is famous for exclusivity of its community, pristine sandy beaches, and clear turquoise water. The company offers its clients a- 10year- payment plan of equal installments, with a 10% down-payment. The project features a wide spectrum of options, from chalets to luxurious villas.

The company offers a payment plan over six years with a 5% down-payment.

The loan is equally distributed between the four banks and will be paid over a -10-year- period. It will contribute to concluding the second phase of Cairo Festival City, which includes several hotel and administrative projects in New Cairo.

The Ministry of Housing is offering 17,000 units at the new capital to the public this month, according to a source at the National Bank of Egypt (NBE).

Egyptian real estate developer, ARDIC for Real Estate Developments and Investments, is to deliver all units of its residential project Zizinia El Mostakbal by 2020, Invest-Gate reports.

MEMAAR AL MORSHEDY UNCOVERS DEGLA LANDMARK

Chairman of Havana Co. Amir Hashaad says, “The company expects to complete marketing Havana Hills within the upcoming period.” “The project will be delivered within next year, Hashaad added.

REMCO RELEASES STELLA DI MARE PHASE II Egyptian construction firm, Remco Tourism Villages Construction Company (RTVC), is launching a new phase of a project located beside the original Stella Di Mare site in Ain Sokhna, Invest-Gate reports. Surrounded by crystal lagoons, the second phase of Stella Di Mare spans an area of 2.15 mn square meter and features a 1,600 meter-wide sandy beach. The new phase comprises different types of units ranging from chalets from shared buildings to standalone villas on private islands connected by bridges.

AL-AHLY REAL ESTATE RELEASES GREEN COMPOUND Egypt’s developer, Al-Ahly for Real Estate Development, reveals details on a green compound in El-Mostakbal City nearby New Cairo, Invest-Gate reports. Inspired by Tuscany of Italy, the80-feddan- Green Square Compound brings the Italian urban elite lifestyle to its residents in Egypt. The project features semi-finished townhouses, a villas duplex, residential buildings (G+5), and services buildings. Green Square will comprise other facilities like dining and entertainment venues, heated swimming pools, a gym, a clubhouse, shopping stores, as well as vast green areas and public spaces for jogging and cycling. The company offers its clients a six-year payment plan.

EVENTS: 26 AUG 2017: CHINA HOMELIFE EGYPT Location: Cairo International Convention & Exhibition centre (CICC) Duration: 3 Days

EMAAR’S MARASSI TO LAUNCH THE GREEK SOON Emaar’s mega-project, Marassi, in Egypt’s North Coast has announced its soon-tobe-launched development, The Greek, Invest-Gate reports. The soon-to-be released project, The Greek, is the eighth community or neighborhood to be offered to the public, within the-6.5-square meter- summer resort, Marassi. The Greek is set to bring Santorini Island of Greece to Egypt’s North Coast, featuring townhouses and apartments of different sizes (starting at 230 square meters) inspired in layout and design by the Greek Island. In its released statement, Emaar is to position its latest installment, The Greek,

“on the highest point in Marassi.”“The Greek Village boasts dazzling panoramas of sea, lagoons, golf views, and roof tops,” the announcement reads. Details about The Greek village will soon be released to the public, Emaar confirms.

WHITE BAY RELEASES NIRVANA VILLAS IN NORTH COAST Egyptian real estate development and management company, PACT Real Estate, reveals updates to White Bay residential projects in the North Coast, Invest-Gate reports. White Bay has recently launched its Nirvana Villas project, blending beauty and functionality with luxury and sustainability. The new villas come in single and twin units, with a 10-year payment plan. Occupying the first two rows of residences along White Bay, the premium villas are designed with glass facades falling on a crystal blue sea front.

Each unit has a spacious balcony and private garden, and is equipped with sophisticated and smart solutions ensuring personal comforts.

EGYPT’S MISR ITALIA LAUNCHES KAI SAHEL SUMMER DESTINATION Egyptian real estate developer, Misr Italia, launches Kai Sahel, a new summer destination on Egypt’s North Coast, Invest-Gate reports. The Kai Sahel project consists of 75% villas and 25% chalets, featuring a sports arena, encompassing a clubhouse, tennis courts, a soccer field, swimming facilities, an outdoor gym, and a track field. The project is located near Fouka, 221 kilometers from Alexandria. Property types include villas, twin houses, chalets, and bungalows with a 10-year payment plan. THE VOICE OF REAL ESTATE | 11

STATS

MARKET

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TOURIST AND HOTEL CAPACITIES IN TOURISM DEVELOPMENT SITES UNTIL MARCH 2017 RED SEA

SINAI

AIN SOKHNA

NORTH COAST

TOTAL

No. of Touristic Centers

No. of Projects

395

319

124

843

Approved Capacity

126,404

162,868

87,893

3,863

381,028

Executive Capacity

93,247

84,170

61,819

3,085

242,321

KEY STATS ON EGYPT TOURISM INDUSTRY SINCE 2014 -5.8

-41.9

( % y-o-y)

9,878

Total Arrivals

-3.2

( % y-o-y)

9,300

( % y-o-y)

5,400

Hotel and Restaurant Industry Value (EGPbn)

67.63

International Tourism Receipts (EGPbn)

56.52

18.8 ( % y-o-y)

-6 ( % y-o-y)

2014

15.1

15.7

92.92

( % y-o-y)

80.34

53.12

5,230

( % y-o-y)

-35.3

59.9

( % y-o-y)

( % y-o-

34.35

2015

2016

106.92

54.91 2017F

THE EBRD AGENDA IN EGYPT DURING THE COMING PERIOD TOTAL EXPECTED INVESTMENT EUR 1bn (USD 1.1bn)

No. of Financed Private Projects

Targeted Production of Solar and Wind Power

No. of Expected Wastewater Treatment Plants

No. of Expected Expansion Units

4 GW

(worth USD 500mn)

Total Expected Installation Pipes

No. of Expected Rehabilitation Plants

No. of Expected Sewage Removal Trucks

3,433

350

kilometers

ONLINE MONTHLY SURVEY

IN NOVEMBER 2016 19 pounds per US dollar

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WHAT IS YOUR FAVORITE SUMMER DESTINATION?

%30

All North Coast

%14

Marsa Alam Cement Prices

Increased by %100

Increased by %20

EGP 10,900 per ton

EGP 780 per ton

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%19

Ain Sokna

Steel Prices

%12

Red Sea Marsa Matmrouh

Down payment starts from 5% and the repayment period is up to 6 years.

%25

Sidi Abdel Rahman IN JUNE 2017

Choose your own unit from a variety of standalone villas, twin houses and Chalets with distinct and elegant designs, We offer various payment plans and prompt delivery.

Head office: Building 290, Second business district, off 90th Road, New Cairo. Mohandsein Branch: 106 Mohy El Din Abou El Ezz St. Dokki, Giza. North Coast: Amwaj – Sidi Abd El Rahman Kilo 136 Alexandria– Matrouh Road.

THE VOICE OF REAL ESTATE | 13

ADVERTORIAL

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PARADISE FOUND

WHITE BAY LAUNCHES ITS EXCLUSIVE NIRVANA VILLAS

ucked away along one of Sahel’s finest shores, White Bay is a yearround resort shaped by pure wellness. From idyllic Mediterranean views and an unmatched serene setting to breathtaking modern design and specially appointed spaces for rejuvenation, White Bay presents a refreshing retreat for living outside of the city. Clear blue waters, pure white beach, and an endless wealth of privacy and calm, White Bay is the ultimate North Coast escape, leaving stress behind and rejuvenating mind, body, and spirit. Marrying beauty and functionality with luxury and sustainability, White Bay just launched its Nirvana Villas. Available in single and twin villas on a relaxing 10 year payment plan, the Nirvana Villas occupy the first two rows of residences along White Bay’s crystal blue sea shore. Offering a haven of relaxation, the premium villas are designed with glass facades at every floor to capture Sahel’s sublime sun, sea and sky. Each Nirvana Villa enjoys a spacious balcony and also features its own private garden. The flow from interior to exterior is effortless, allowing for comfortable entertainment throughout. Combining extraordinary privacy and exceptional surroundings harmoniously, each unit is exclusively equipped with sophisticated and smart solutions to ensure that all of your personal comforts are taken care of. The experience delivered is a soothing, calming, and nurturing individual space…the very best in serenity and seclusion.

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THE VOICE OF REAL ESTATE | 15

AREA

ANALYSIS

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REAL ESTATE MARKET SNAPSHOT

REAL ESTATE MARKET SNAPSHOT Tourism Sector Analysis

Egyptian Tourism Sector Snapshot Introduction

Market Analysis Travel & Tourism Competitiveness Index

Egypt's tourism industry is still reeling, but hope is on the horizon. The country is one of the major destinations contributing to the Arab Peninsula’s tourism industry as the destination is favored mainly by Europeans who enjoy the nearness of such a country with an endless activities to enjoy; however, the sub-region’s average was weighed down by sharp decline in Egypt (-45% decline) following the security incidents in 2015 and 2016 and the negative travel advisories. Political upheaval, air crashes and fears over security at ancient sites have devastated the country’s tourism industry – but the return of flights from the UK to Luxor is a welcome step towards recovery

Egypt

MENA

Business Envi ronment Cultural Resources & 6 Safety & Securit y Business Travel 5 4

Natural Resources

Health & Hygiene

3 2

Tourist Service Infrast ructure

Human Resources & Labor Market

Sector Main Attractiveness

Drivers

The most important of all factors; a country have to pass the safety tests first in order to enhance and utilize other factors to attract foreign flow, if not, then the remaining factors are nearly useless

The tourism market is a very sensitive market easily affected by a number of factors ranging from political, economic, cultural etc. …

1 Safety

Ground & Port Infrast ructure

Env ironmental Sustai nability

2007

Priori tization of Trav el & Tourism

2009

2010

2011

Occupancy Rate (%)

Other Sector Indicators

Room Rate/Night (EGP)

UAE 28%

1,500

600

500

700

29%

Touri sts to the MENA Regi on 11%

900

60%

Lebanon

19%

13%

Saudi Arabia (Religious Tourism) Egypt

20%

64% 30%

32%

25% 16% 4% Sharm Els heikh

12% Hurghada

27%

26%

56%

1% El-Gouna

Luxor & Aswan

Touri sts to Egypt

6% 4%

Others

Tourists Nights 8%

10%

10.2 9.1

18%

6.2

Egypt Hotels by Ra ti ng 26%

2014 Number of Nights (Millions)

2015

2016 Average N ight per Tourist (EGP)

Touri sts’ Tri p Purposes i n Egypt 95.0%

12.9

2012

2013*

2014

2015

2016

Safety ↓ Political ↓ On 31 October 2015, the flight which was operated by a Russian airline mysteriously dropped out of the sky over the Sinai Peninsula killing all 224 passengers on board. It was discovered later that a bomb was planted

14.7

12.5

11.5

11.1 9.8

Khan el-Khalili Bombing

Safety ↓ n February 2009, the Khan el-Khalili bombing killed a French schoolgirl on a class trip

Chinese English

9.4

9.8

9.4

5.3

Arab Spring

Safety ↓ Political ↓ In January 2011, the Egyptian revolution occurred labeling the country unsafe to travel from Tripadvisor

Others

30 June Revolution

Safety ↓ Political ↓ In June 2013, following the revolution which resulted in the ousting of Mohamed Morsi, "unprecedented clashes" have occurred

EgyptAir Flight 804

Safety ↓ The flight which was a regularly scheduled international passenger from Paris Charles de Gaulle Airport to Cairo International Airport operated by Egypt Air crashed into the Mediterranean Sea killing all 66 passengers on board

4 *Starting 2013 and following the June 30 th revolution, violence in the Sinai surged once again continuing till this day

3 21%

2 1 Unclassified

Leisure & Ent ert ainment Others*

*Other purposes include culture, medical, conference, educational & training, etc.

Recommendations … raising the flag for an immediate response to all those aspects in order to support tourism in the country.

Enhancing Safety & Security

Marketing Campaigns & Promotions

Improving Service Quality

Enhancing Sustainability

Providing Visas on Arrival

The country lost around 50% of its tourist flow driven mainly by the crash of the Russian operated airline gaining the country zero flow of Russian tourists who represented around 20% of total tourists. Security measures are the main driver for the tourism sector given that the remaining factors are mainly convenience aspects that can be shaped as per a tourists interest

For more details, please contact | Ashraf Warida, CEO Email | ashraf.warida@cb-egypt.com

16 | INVEST.GATE | August 2017 - ISSUE 05

Activities

Russian Flight 9268

16%

… that if a slight turbulence in any of them, can have a huge effect on any country especially countries that are nearly tourism based economies similar to the Egyptian market…

Saudis

5.0%

Impact

Ukranians 12%

Affordability

Safety ↓ In May 2013, following an abduction of Egyptian officers, violence in the Sinai surged once again

Safety ↓ In April 2009, Egypt said it had uncovered a Hezbollah plot to attack tourist sites in the Sinai, causing tension with the Shia group from Lebanon

Germans

13%

Sinai insurgency

Price Competitiv ness

1,700

Alexandria

2008

Hezbollah plot

Hotels Breakdown (%)

Cairo

Distan ce Competitivn ess

International O penness

Hotels, Room Rates, and Occupancy

Tourist Arrivals to Major Incidents (In Millions)

ICT Readiness

Ai r Transport Infrast ructure

Politcial Stability

Sector Highlights

14%

Tel | +2010 2555 6673

Website | www.cb-egypt.com THE VOICE OF REAL ESTATE | 17

VOICE OF THE EXPERT

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How do you view the Egyptian economy today?

MAXIM DEVELOPMENTS

SEEN OFFERING HIGH-END, EXCLUSIVE RESIDENTIAL PROJECTS

We have a very high inflation rate and the value of real estate property is rising to compensate yet the people continue to invest in real estate. In merely one year, we have seen an increase in electricity, an implementation of the VAT, heightened water and electricity costs, construction materials cost increase, as well as, floating of the EGP. It has been a very hard year for developers; however, the purchase power remains highly visible. Clients understand where to invest after this inflation. Real estate is critical if you want to understand the Egyptian market. Why do you think clients prefer investing in real estate as opposed to currencies or gold? I think people find it a more stable investment outlet than others. It has ingrained in our culture since Ancient Egypt that we do not sell our land. Today, as soon as a young man graduates, he purchases a home, whereas in other countries young people buy mortgages. How do you view the economic reform program? Are you optimistic about the future? I am optimistic. We are now living in hard times; the economic equation, everywhere, is that after hard times the economy recovers again. Historically, the economy goes through a rough time every five to seven years but it soon recovers. However, the government has to support the consumer by not offering lands at high prices because the cost of land reflects on the cost of property. This is the main factor, leading to the frequent price increase of real estate in Egypt. Tell us about some of your projects. Maxim owns Royal Maxim Palace Kempinski, among some other developments, including BO Sidi Abdel Rahman (BO Islands and BO Sands), Royal Maxim Compound served by Kempinski, Maxim Country Club Compound, and Maxim Residence Compound (Sherouk City). What about other projects in the pipeline? We are opening a mall in New Cairo near the American University (AUC) Campus, as well as, another mall on the North Coast; so we have commercial and residential developments. The prior will open this September while the latter will inaugurate in 2018. This second mall is an open-air mall on the beach, somewhat the same concept of JBR in Dubai, with swimwear stores and accessories stores, mainly targeting clients on the beach. Our designs reflect those of Spain and this I believe this is our edge… We present a lifestyle and not just buildings, featuring a unique design. This impacts our clients. Exclusivity is also important; all our clients will receive a Maxim membership card, allowing them to enjoy all our project facilities. We sell a lifestyle.

BY YASMIN ELBEIH

axim Developments Vice President Amr Mohsen is a visionary, seeking to offer an upscale lifestyle at attractive packages to his clients. His ideas are behind numerous one-of-a kind projects, bringing “El Gouna” concept of the Red Sea to the North Coast with his latest Bo Islands in order to maximize the tourism season, extending it to six months from the couple of months a year trend that bring in local tourists. Invest-Gate sits down with Mohsen to discuss Maxim’s projects with a special focus on BO Sid Abdel Rahman, the outlook for Egypt’s tourist destinations, and Maxim’s historical growth in clientele following the float of the local currency.

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How do you view the outlook for the North Coast? Do you feel it could become an international destination? Our weather here is very good to Europeans. If we build our facilities and amenities well, we will convince people from abroad to purchase properties here. We have very good resources that are not well utilized. We have two projects in Sidi Abdel Rahman on the North Coast: BO Islands and BO Sands as part of the BO Sidi Abdel Rahman project. We are developing a gated community over 1,700 feddans, encompassing compounds, BO Islands and BO Sands, a polyclinic, a hospital, and a university. We have the advantage of being located

“It has been a very hard year for developers; however, the purchase power remains highly visible. Clients understand where to invest after this inflation. Real estate is critical if you want to understand the Egyptian market.” in proximity to the New El-Alamein city, where we are constructing this gated community. The idea is to stretch the timeframe for the North Coast season from the two-to-three- months summer trend. Bo Islands has already acquired Martin’s Beach that is already open to the public this summer. It has an astonishing atmosphere. In BO Islands, we are selling villas, all of which are waterfront. 88% of the projects comprise lagoons and landscapes while merely 12% is built. Our edge is the privacy and low density of the project. Each island has a name, character, and a different type of unit design layout. You can put your kayak in the lagoon right in front of your house. It is another lifestyle, with all the houses seafront. The lagoons are crystal clear, turquoise colored even. Developers usually offer a mediocre product at a reasonable price or a good product at a high price. We managed to overcome this difficult equation and offer a high-end product at an adequate price level, which to me was a challenge. We present a lot of facilities, an exclusive lifestyle, and a high-end community. In the last couple of months, we have exceeded sales volumes of EGP 600 mn, which is remarkable. We overcame the challenge and we did well. What do you think of the government’s plan to attract investments from Egyptians abroad and Arabs into the real estate market? Two months ago I attended exhibitions in Dubai and Kuwait, where we made very good sales due to the difference in the currency value. We need, as a nation, to become visible to them; show them what we have to gain their trust and interest. If we take Maxim’s example… When we attended those exhibitions in Dubai and Kuwait, we received many interests from buyers to an extent that we just established an international sales department, which has been doing very well. As a matter of fact,

it exceeded our expectations. This only happened because we took our products to them. They saw what we are capable of. So how has the portfolio changed? Today it mainly constitutes Egyptians living abroad and Arabs. We are targeting during the next period to expand to more markets. I think we have to start going to other countries and demonstrate our products. What about other vacation destinations in Egypt; where do you feel we are not capitalizing enough? There is very high potential but the problem is now the low tourist inflows, which the government is keen on resolving. Ain Sokhna is a case on its own. It mainly caters for the locals and is doing very well in that respect. However, Hurghada, Makadi Bay, Sahl Hasheesh, and El Gouna are slowing down because of the float and the tourism problem. I believe things will get better soon as tourism picks up.

“the cost of land reflects on the cost of property. This is the main factor, leading to the frequent price increase of real estate in Egypt.” THE VOICE OF REAL ESTATE | 19

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䄀唀吀伀䴀䔀䌀䠀䌀䔀䰀䔀䈀刀䄀吀䔀匀吀䠀䤀匀匀唀䴀䴀䔀刀䄀吀䈀伀匀䤀䐀䤀䄀䈀䐀䔀䰀刀䄀䠀䴀䄀一Ⰰ 䘀伀刀吀䠀䔀䘀䤀刀匀吀吀䤀䴀䔀䄀吀吀䠀䔀一伀刀吀䠀䌀伀䄀匀吀⸀ 䌀伀䴀䔀䄀一䐀匀䔀䔀䘀伀刀吀䠀䔀䘀䤀刀匀吀吀䤀䴀䔀嘀䔀刀夀匀倀䔀䌀䤀䄀䰀匀唀刀倀刀䤀匀䔀匀℀

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䘀伀刀匀伀䴀䔀䔀堀䌀䤀吀䤀一䜀䄀一䐀䔀一䔀刀䜀䔀吀䤀䌀匀倀伀刀吀匀Ⰰ 䌀伀䴀䔀䄀一䐀吀刀夀 ᰠ吀䠀䔀刀䄀䴀倀ᴠ 䘀伀刀吀䠀䔀䘀䤀刀匀吀吀䤀䴀䔀䄀吀䈀伀匀䤀䐀䤀䄀䈀䐀䔀䰀刀䄀䠀䴀䄀一⸀ 䤀一吀刀伀䐀唀䌀䤀一䜀吀䠀䔀䰀䄀刀䜀䔀匀吀䈀䤀䬀䔀刀匀倀伀刀吀匀䄀䌀吀䤀嘀䄀吀䤀伀一䤀一吀䠀䔀一伀刀吀䠀䌀伀䄀匀吀⸀

吀䠀䔀伀一䰀夀䐀䔀匀吀䤀一䄀吀䤀伀一䘀伀刀䔀堀吀刀䔀䴀䔀匀倀伀刀吀匀Ⰰ 圀䤀䐀伀伀匀伀䴀䔀圀䠀䔀刀䔀䈀䔀吀圀䔀䔀一吀䠀䔀匀䔀䄀䄀一䐀匀䬀夀 ⸀

匀唀䴀䴀䔀刀䤀匀䄀䈀伀唀吀吀伀䜀䔀吀䘀刀䔀匀䠀䔀刀℀ 䴀䄀刀吀䤀一ᤠ匀䤀匀䌀䄀吀䔀刀䤀一䜀夀伀唀刀一䔀䔀䐀匀䐀䄀夀䄀一䐀一䤀䜀䠀吀䄀䰀䰀匀唀䴀䴀䔀刀䰀伀一䜀䄀吀䈀伀匀䤀䐀䤀䄀䈀䐀䔀䰀刀䄀䠀䴀䄀一℀ ⸀

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Living On an Island Made Attainable With Maxim Imagine the privacy of your own waterfront home on the crystal clear waters of the Mediterranean, located a mere two-hour drive from the capital. Sandy beaches, an exclusive community, and the pristine waters of a paradise undiscovered are made attainable with Maxim’s exciting new project, Bo Sidi Abdel Rahman. It is the first project on the Alexandria-Marsa Matrouh coastline situated right after the new El-Alamein City. The project encompasses Bo Islands, which will be delivered by the end of 2017, to be followed by Bo Sands’ first units by summer 2019. The beach length of both runs for over one kilometer, in addition to over 30 kilometers of lagoon space. Featuring hotel apartments, a spa, and water activities, both projects bring you premium luxury that was previously unimagined in Egypt.

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Carnival Games by

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DORRA DEVELOPMENTS ONCE AGAIN BREAKS THROUGH THE COMMERCIAL PROPERTY MARKET WITH THE COURTYARD

orra Developments breaks through the Commercial Property Market with prime office space at its latest office complex ‘The Courtyard’, modernizing the Sheikh Zayed retail market with the dominating tenant mix at ‘Capital Business Park’. Known for their wide portfolio of residential projects, especially across Cairo’s western suburbs, it is safe to say that Dorra Group was what brought life to the currently sought-after location of Sheikh Zayed city by being the first developer to introduce gated communities to the area. The early vision was to raise living standards and pave the way for Greater Cairo’s developments. This year, Dorra Group will launch phase 2 of The Courtyard, catering to retail and office spaces with a special dedication to small and mediumsized enterprises, along with the launch of Capital Business Park’s much anticipated branded retail venues at it’s promenade, throughout phase 1 and 2. The Courtyard is the second business complex in the heart of Sheikh Zayed, western Cairo by Dorra Developments, designated mostly for young entrepreneurs and small- to medium-sized business ventures. Invest-Gate joined Egypt’s construction and development giant Dorra Group on a special tour across its latest offering, The Courtyard, as well as

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80 to 240 square meters, which effectively tackle the SMEs that need prime office location immediately. Again this size in office space is not available elsewhere and tackles a much-needed requirement by our market today. In terms of matching the name to the design, The Courtyard is quite frankly a modern development with a subtle pop of color that’s true to its name-it’s a courtyard so everyone has central views in their clusters! We have constructed the office buildings surrounding a façade all overlooking a wide space of greenery and water features like fountains and water jets, for example. Its simplicity in landscape highlights and complements such water features. The Courtyard has undoubtedly provided a relaxing and cohesive atmosphere for its clients to work and grow their business. How about the retail aspect? We hear that there are some interesting venues opening up. We signed on a really risqué and fun outlet catering to a wide age group called the ‘Escape Room’-it’s actually more so catering to the community of Sheikh Zayed city. Details on this will need you to come and experience it so we don’t ruin the surprise! Along with that, we have begun signing on a few select brands that are very promising in growth and we want to support their success as they have become very popular with the Egyptian market. Let’s recap, Immediate Delivery and Flexible payment plan; can you tell us details on this? Well as mentioned… The Courtyard is ready for sale and we provide flexible installment plans over three to five years post delivery. Down-payments are competitive at 20%, given that the market norm for a ready-built property is at 35% with other developers. This option we’ve provided is not available today in the market and, as a general market rule, all projects are to be handed over only when all due payments are completed. Here at The Courtyard, clients are to buy their desired units, move in, and enjoy an installment plan of three years

or five years with post delivery. Most companies sell first and then spend three years or more to handover their projects, depending on the contract terms of course. On the contrary, as our client, you move in and spend the following three to five years completing your payment plansuch an option is not to be found elsewhere. It is our benchmark for today’s market with it’s current challenges. Is The Courtyard entirely sold out today? Not entirely, the first phase is sold out. In fact, we have very well-known businesses and brands that are to fully operate at The Courtyard very soon as we plan to launch the inauguration of the project by early 2018. Now we are completing its second phase and we just pre-launched its sale’s. We are receiving great feedback and have already guaranteed a 75% sale of the second phase, with the remaining 25% now on a special offer for one month. I say this because we as Dorra Developments will be increasing the value of these units by 15% at the

end of August due to the current economic state in Egypt, which is out of our control. You mentioned medical practices; could you elaborate on this? Of course. By medical, we mean clinics and small medical centers and consultancies. We have designated an entire block within The Courtyard premises for medical services, featuring clinics of all specialties to serve to the neighboring residences like The Address which we developed a few years back. It is worthy to say that The Courtyard was initially born out of The Address residential project. Finally, what is your current turnaround with regard to tenants at The Courtyard? We have over 150 companies occupying The Courtyard today, 40 of which are currently in the final phases of furnishing and fitting out their units as we speak.

BY FARAH MONTASSER

Capital Business Park’s retail promenade, led by Sales Director Yassin Habib and Marketing Director Karim Sultan. Both highlighted the group’s modern take on the office space and the retail market, as well as how The Courtyard will cater to the needs of small and medium-sized enterprises, as well as the larger community. What is special about The Courtyard? The Courtyard is a mixed-use complex, serving about 30,000-40,000 of Sheikh Zayed’s residents. It is designed to provide high-end and value-centric office spaces for administrative SME’s as well as medical practices. We started this project about two years ago. Recently, the project’s first phase was delivered and we did exceptionally well. Our goal was to have the first cost-effective business complex in the Sheikh Zayed area for retailers, commercial, and administrative organizations that additionally were immediate for delivery, relieving the burden of having to wait a couple of years for your property to be realized. We are delighted to say that this project, today, is ready for delivery. With The Courtyard, we are very selective with our clientele and the services provided in our premises to make sure that we live up to the standards we claim and the commercial distinction Dorra Developments has become known for in the Sheikh Zayed city.

It is safe to say that The Courtyard is centralized in the dynamic location of Sheikh Zayed; its unit prices on offer are very competitive and attractive to clients given its location, the world-class design by our UKbased designers, and the services provided. In terms of design, Dorra Group sourced one of the best international architectural firm’s to design The Courtyard and was always keen on turning the exact same sketches and layouts to reality along the way. Successfully, we did as seen in the original concept and technical rendering. Given its design, what makes The Courtyard stand out among the rest today? The Courtyard’s design and layout are entirely different than those available in Egypt today. Its buildings are somewhat similar to those boutique office parks in the cul de sacs of Europe. It’s very cosy. Like residential units, The Courtyard is divided into clusters, meaning that we offer buildings as standalone units to serve just one business or client if required. Such a feature is not to be found elsewhere in Egypt and is a breakthrough in office and retail market dynamics along with its excellent payment plan and immediate delivery, so basically you can begin today and not stress on your financial obligations. We offer different sizes of office space ranging from THE VOICE OF REAL ESTATE | 23

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EGYPT`S FIRST REAL ESTATE STRATEGIC ROUNDTABLE DISCUSSION

EGYPT REAL ESTATE This year, Dorra Developments have been quietly ‘cooking up’ something fresh at Capital Business Park, working diligently on a brand new look and have been signing on undeniably the most popular and sought after dining, specialized cafés, bistros and fashion venues in Egypt today, including the highly anticipated UFC Gym--the leading fitness and MMA brand in the states today--which will finally enter the Egyptian market with it’s flagship venue and deliver a ‘knock out’ to the ever-growing fitness and healthconscious market. Capital Business Park is undoubtedly positioned as the leader of office and administrative space in Sheikh Zayed city—the numbers say it all--with its organic footfall of ever-growing business tenants and with newly handpicked retail venues at it’s promenade. It is safe to say that Capital Business Park in the past 2 years has dominated the administrative commercial market and are en route to sealing the deal with its newly-positioned retail tenant mix and delivering that tangible multi-use development that was promised in early 2008. Invest-Gate had the pleasure to have a sneak peak into plans for Capital Promenade and discussed candidly with Dorra Developments Marketing Director what is in store for the Sheikh Zayed community as well as the retail tenants at Capital Business Park. Capital Business Park has paved its way as the signature project to date of Dorra Group as well as a landmark project in Sheikh Zayed city, but now there is a lot of talk of the new launch of the rebranded retail promenade, this looks like a very strategic shift, can you tell us more on this? We’ve worked very closely on ensuring Capital Business Park is the success we have realized today. We committed a few years back to focusing primarily on positioning ourselves as premium office space 26 | INVEST.GATE | August 2017 - ISSUE 05

providers and penetrated the business market place, which we have known since 2007 to be growing and in need of the proper facilities to maintain it. Whilst many others remained focused on the retail aspect of their mixed-use projects, we chose to continually focus on the somewhat resistant business community. Unlike residential developments, commercial property and especially offices are a challenge for the market to switch over-- it takes more time to gain traction, unlike the fluid demand from residential migration; thus we stayed true to our internal vision, remained patient, and worked on creating that market demand and evolved standards. Many other developers have joined on in supplying that demand, which is a great milestone. Now, we have shifted our focus and gone headstrong into the retail arena. We are very excited to sign on many of today’s local market leaders in their respected field, adding that final accolade on our much-appreciated development. Wasn’t that risky, seeing as the retail market today is highly selective in choosing where to go next? You are absolutely correct. Today’s retailers are much more sophisticated than they were many years back; they are also much more aware of brand value and are equipped with easier access to various financial channels far more so than previously. Yet, we were confident of the platform we were providing at our retail promenade as it continually amazed those who came visit it. We have not seen any other development offer the design, quality of masonry and finishing, or the cutting-edge facilities that we have, but you are correct to say it was risky in trying to select and reach out to the proper brands as they had already established themselves in various other venues and are highly aware of each others movement.

In order to move on with our plans, we collaborated with various leaders in the Egyptian F&B industry on an open discussion platform to provide that proper retail mix, namely the gentlemen at Mori Co, who are pioneers in their industry and have been a powerful catalyst in leading the way of our retail strategy. Thus, we began embarking on our rebranding initiatives of the Capital Promenade. Today we have signed on Mori Sushi, Mo Bistro, Eatery, Ted’s, Mince, Tamara, Cake, 30 North as well as the highly sought after high end fashion retailer Villa Babooshka and the much anticipated Hair and Beauty Salon ‘Mounir’ from Lebanon that will cater to both women and men. But it hasn’t stopped there--we are very excited that the UFC (ultimate fighting champion) has picked Capital Business Park as their flagship location and entry point to the Egyptian market, and will be boasting over 3,000 square meters spread over 3 floors at phase 2 encompassing a fully functional gym, a grappling and sparring arena, boxercise and cross training open areas as well as his and hers sauna and steam room facilities overlooking Sheikh Zayed City through its heat-resistant floor-to-ceiling windows. These are just a handful of brands, and more are coming that we are bringing on board. These will share the promenade with the already-existing Porsche and Harley Davidson showrooms, as well as the successful oriental restaurants of Mawlaweyah and Bab Tooma. When can we expect to see all these impressive venues opening up? We are on track with our opening at the end of the year, with most of the venues being fully operational earlier than that, but we want to have a grand launch with all vendors together in what will be Sheikh Zayed’s biggest ever all-day invitation--we’ll pick up the tab--and that’s all I can reveal now so I will be sure to let you know in advance.

CHALLENGES AND OPPORTUNITIES STRATEGIC ROUNDTABLE

5 DECEMBER 2017

DISCUSSION TOPICS INCLUDE: Residential Economic Issues & Trends Commercial Economic Issues & Trends Federal Legislative & Regulatory Issues Real Property Valuation Infrastructure Challenges & Opportunities Attracting Foreign/International Real Estate Investments Hospitality/Real Estate Investment in Modern Egypt

For more information contact marketing@invest-gate.me

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EBRD’S HECKMAN POSITIVE ON

EGYPT’S INVESTMENT CLIMATE

s one of the largest sources of investment and financing to the Egyptian infrastructure sector, the European Bank for Reconstruction and Development (EBRD) has taken it upon itself to become one of the country’s biggest international partners in its underway economic reform plan. Invest-Gate meets up with Janet Heckman, the EBRD’s Managing Director in the Southern and Eastern Mediterranean (SEMED) to dig deep on the bank’s strategy, areas of interest, and the major challenges facing foreign investors in Egypt today. Based in Cairo, Heckman is responsible for the formulation and delivery of the EBRD’s strategy and business plan in the region, covering Egypt, Jordan, Morocco, and Tunisia. She holds an MSc in Foreign Service from Georgetown University in Washington, D.C. and a BA in History from Kenyon College. She also studied at the American University of Beirut, Lebanon. What tops the EBRD agenda in Egypt during the forthcoming period? We are paying due attention to renewable projects in Egypt, especially those being carried out in the governorates of Upper Egypt. During the coming period, the EBRD will finance 15 renewable private projects worth USD 500mn. The contract will be signed this October, with the 15 private renewable projects in various areas. The financing, approved by the EBRD’s Board of Directors on June 7, 2017, supports the development of private renewable energy projects under the Egyptian government’s feed-in-tariff program. That program aims to stimulate private investment in over 4 GW of wind and solar power. Over 50% of Aswan’s population falls below the poverty line. The EBRD’s solar projects located in Benban will bring a significant short-term boost to the economy and will provide benefits through the transfer of skills and the creation of longterm jobs in operation and maintenance.

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How do you see Egypt’s investment climate? There is a lot of growing optimism since the recent visit by President Abdel Fattah El Sisi to Germany, where most of German investors demonstrated their confidence in Egypt’s investment climate. The European Bank for Reconstruction and Development expects to invest about EUR 1bn (USD 1.1bn) in Egypt this year following a revival in investor confidence after Egypt floated its pound currency in November.

By Nayrouz Talaat

EBRD said that the investment would increase the company’s wastewater treatment capacity by almost 300,000 cubic meters per day and provide sanitation services to almost 90% of the rural population in the Fayyoum governorate. We are proud to sign a project combining the strategic priorities of the EBRD with those of Egypt.

It is a vital investment for the country and will not only develop wastewater infrastructure, but also improve the environment and contribute to employment in a remote rural area substantially. How do you see Egypt’s progress in upgrading infrastructure, especially in rural areas? We have signed many agreements with the Egyptian government in the field of infrastructure. The most recent agreement is related to the wastewater treatment project in Fayyoum along with yet another in transportation. The EBRD has agreed to provide a loan of up to EUR 186mn to the Fayyoum Water and Wastewater Company for the development and expansion of its services across the country. The European Investment Bank is to finance the EBRD loan with EUR 172mn while the EU Neighborhood Investment Facility (NIF) is extending an investment grant of EUR 30mn and more than EUR 7mn for technical assistance. The financing will be used for the construction of eight new wastewater treatment plants, the expansion of nine units, and the rehabilitation of 10 plants, as well as, the installation of 3,433 kilometers of pipes and 139 pumping stations. Furthermore, 350 sewage removal trucks will be procured to serve remote rural communities.

Meanwhile, a- EUR 290mn- loan- agreement to support Egyptian National Railways’ planned acquisition of up to 100 diesel locomotives through a supply and maintenance contract signed by the European Bank for Reconstruction & Development back in June 19.

The acquisition of new locomotives maintained by a private-sector partner would enable the state railway to provide a more reliable and higher quality service, thus generating additional revenue. The replacement of life-

The EBRD has invested EUR 2.3bn in 42 projects in Egypt since it began operations back in 2012, making Egypt the bank’s third-biggest investment destination worldwide.

expired and inefficient locomotives would also reduce operating costs, fuel consumption, and carbon emissions.

The EBRD has agreed to provide a loan of up to EUR 186mn to the Fayyoum Water and Wastewater Company for the development and expansion of its services across the country.

Procurement of the locomotives is to be undertaken under the terms of EBRD’s rules for public-sector projects. It is not connected to the USD 575mn letter of intent for GE Transportation to supply 100 Evolution Series locomotives, which was recently signed between the Ministry of Transport and ENR.

What are the current main challenges from your viewpoint? In my opinion, I think the government cannot do everything on its own; there must be more engagement from the private sector side to help balance the gap in fund resources. This can be done through the concept of public-private partnership. Meanwhile, the banking sector has to find more tools that help utilize better financial plans. What is the total investment of the EBRD in Egypt so far? The EBRD has invested EUR 2.3bn in 42 projects in Egypt since it began operations back in 2012, making Egypt the bank’s third-biggest investment destination worldwide. The bank, which works with companies to support market economies and develop the private sector, hoped to work on more projects last year but the foreign currency shortage in Egypt caused many investors to put their plans on hold. There has been much investor interest in Egypt since the implementation of the currency reforms and economic reform program.

EBRD is also providing technical assistance support to the ENR with the development and implementation of a comprehensive freight reform and commercialization plan. This includes the separation of freight and passenger operations, as well as, the introduction of track access charging. EBRD will additionally support the ENR in implementing a campaign making rail transport safer for women. THE VOICE OF REAL ESTATE | 29

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CONSTRUCTION COSTS TO FURTHER ESCALATE

ON FUEL PRICE HIKES

MENNA A. FAROUK

for owning residential units in Egypt following the devaluation of the Egyptian pound.” Meanwhile, Sabbour calls upon the government to increase promotional campaigns for Egyptian properties abroad, especially in the Gulf countries, in order to attract new clients and keep the sales of real estate companies intact, as well as, secure expansion capabilities. Mamdouh Badr El-Deen, Chairman of the Real Estate Investment Division at FEDCOC, sees further hikes in residential units within the Egyptian real estate market in the upcoming few months due to such recent decisions; “interest rates are to further increase by 4% in a few months’ time,” he claims. In June, the CBE raised key interest rates by 200 basis points for the second policy meeting in a row. During its Monetary Policy Committee meeting, the bank Fuel prices Fuel prices to cement factories Gas prices to the industrial sector

Increased by %50 Will increase by %40 Will remain stable

raised the overnight deposit rate to 18.75% from 16.75% and its overnight lending rate to 19.75% from 17.75%, last May 2017. “All these measures will contribute to a further rise in construction costs and accordingly, a remarkable rise in prices of residential units,” Badr El-Deen says.

GYPT’S construction costs are to see a further increase after the government hiked fuel prices by up to 50% in order to help meet the terms of a USD 12 bn IMF loan deal, real estate developers and contractors anticipate. Invest-Gate explores the effects of the government’s recent decision to increase fuel prices on Egypt’s real estate market. “Any increase in fuel prices has a direct and dramatic effect on construction costs, prices of residential units, and the country’s real estate market as a whole,” Ahmed el-Zeini, Chairman of the Building Materials Division at the Federation of Egyptian Chambers of Commerce (FEDCOC), tells Invest-Gate. According to Invest-Gate’s meeting with El-Zaini, some cement companies have pushed up cement prices by EGP 50 to stand at EGP 800 per ton compared to EGP 750 a month earlier. “The increase came shortly after the fuel price increase,” the official says, expecting that prices of other construction materials will remarkably increase in the coming period with the rise of transport costs, especially for factories making long-distance commutes. Prices of construction materials have been soaring since the flotation of the Egyptian pound last year. In November 2016, the Central Bank of Egypt allowed the local currency to float freely, with greenbacks changing hands at near EGP 19 per USD 1. Ditching its currency peg has helped the Egyptian government to secure a- USD 12bn30 | INVEST.GATE | August 2017 - ISSUE 05

three-year loan from the International Monetary Fund (IMF) to support a reform program, under which the government introduced a Value Added Tax, cut electricity subsidies, and sharply raised import duties all in the pace of a few months. According to data released by the Building Materials Division at FEDCOC, steel prices jumped by about 100%, hitting EGP 10,900 per ton in IN NOVEMBER 2016 19 pounds per US dollar

Cement Prices

Steel Prices

Increased by %100 EGP 10,900 per ton

IN JUNE 2017

Hussein Sabbour, Chairman of Al-Ahly for Real Estate Development, says “The economic reform measures, including the fuel price hikes, are crucial at the moment and should have been taken several years ago,” adding that the negative effects of those decisions, manifested in the rise of goods and services prices, will vanish on the long term. According to Sabbour, the country’s real estate sector will be the least affected by those measures as “there is an increasing demand on properties from Egyptian expats, whose appetite has grown

Increased by %20 EGP 780 per ton

June 2017, compared to EGP 4,500 during the same month last year. Meanwhile, cement prices increased by approximately 20%, hitting EGP 780 per ton in June 2017, compared to EGP 600 a year earlier, the FEDCOC data shows. According to the recent government decision, fuel prices to cement factories will rise by 40% to EGP 3,500 per ton from EGP 2, 500 a ton; “however, gas prices will remain stable to the industrial sector,” Minister of Petroleum Tarek el-Mulla earlier announced. The fuel price hikes come as part of the government’s ambitious reform program to revive the economy, which has gone through its toughest times since the January 25 Uprising.

There is an increasing demand on properties from Egyptian expats, whose appetite has grown for owning residential units in Egypt following the devaluation of the Egyptian pound.

However, some real estate experts and developers are urging investors and real estate companies not to increase the prices of residential units in order to avoid any decline in the market demand.

However, gas prices will remain stable to the industrial sector,

Chief Executive Officer of Wadi Degla Developments Maged Helmy says, “The recent fuel price increase will directly affect the costs of carrying out real estate projects as the costs of raw materials and transport will increase, accordingly pushing up the price of residential units.”

Minister of Petroleum

It seems that although the recent fuel price increases would largely push up construction costs, some real estate developers would keep prices of residential units almost intact in order to maintain growth of their clients’ appetite for properties.

Tarek el-Mulla

Nonetheless, he adds, “It would be wise if real estate developers do not increase the prices of residential units in accordance with the recent fuel price hikes because that would largely affect public demand on properties.”

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Egypt is expected to see an annual expansion rate of 18.9% in mortgaged households in 2017, with expectations that about 300,000 households are to be sold through mortgage plans this year

she was not available to comment on the initiative. “The initiative is very effective and most applicants get the loans they want if all conditions are applicable,” NBE’s source adds. The Ministry of Housing is actively and continuously launching units; for example, it will launch three-bedroom social housing units that are fully-furnished worth EGP 200,000 soon, with a 20-year payment plan and an EGP 25,000 down-payment, they also note.

CBE LAUNCHES INITIATIVES TO BOLSTER REAL ESTATE, TOURISM SECTORS

The ministry already offered affordable units for low-income citizens in various governorates such as New Qena, New Assiut, Ismailia, Obour, AlShorouk, and New Cairo, the source says.

BY JULIAN NABIL

Prior to the initiative, people faced a lot of problems like registration and higher compound interest rates, which stood at 18-19%, according to the source.

Long-term Mortgage Financing for Low-, Mediumincome Housing Units

Under the initiative, mortgages, targeting lowincome citizens, are set at an annual interest rate of 7% while middle-income financing options carry an 8% annual interest rate.

he Central Bank of Egypt (CBE) has recently launched initiatives to support the country’s real estate and tourism sectors, providing low-interest loans with long maturity periods. Invest-Gate demonstrates such incentives that are to attract further investments to the country.

The CBE allocated EGP 10 bn to provide long-term mortgage financing for low- and middle-income housing units, offering a maturity period of 20 years at a low lending interest rate, according to an official statement released in February 2014.“ The initiative aims to stimulate mortgage financing provided by banks as well as revitalize the real estate sector,” a source (who wishes to stay unnamed) at the National Bank of Egypt (NBE) tells Invest-Gate. 32 | INVEST.GATE | August 2017 - ISSUE 05

Low-income citizens will be eligible to the 7% interest but the CBE does not specify a particular monthly income, leaving that to be determined by the mortgage fund. Mortgages with an 8% interest will be available to middle-income individuals, earning more than EGP 8,000 per month and families earning EGP 10,000 per month, allowing them to purchase homes worth up to EGP 500,000. However, the CBE amended some of the terms of its initiative back in February 2016 to increase the

number of beneficiaries, adding a new segment of low-income individuals earning less than EGP 1,400 at an annual interest rate of 5% instead of 7%. Down payments have been cut to EGP 12,000 instead of EGP 15,000, with governments providing an incentive to banks to finance income brackets that may have difficulty obtaining proof of income through insurance policies. The amendments also included providing mortgage financing to a new income bracket under the name “average distinctive income” at an annual decreasing yield of 10.5% per year available to finance housing units worth up to EGP 950,000. The maximum monthly income of the beneficiary should be no higher than EGP 15,000 per individual and EGP 20,000 per household, with the maximum loan provided for this bracket standing at EGP 950,000. Invest-Gate attempted to contact Head of the Mortgage Finance Fund Mai Abdel Hameed but

The CBE mortgage financing initiative is very effective and most applicants get the loans they want if all conditions are applicable.

As for the middle-income segment, the government launched the Dar Misr housing project in Obour, Damietta, and 6 of October City, with prices ranging from EGP 400,000 to EGP 600,000 for areas ranging between 100 and 150 meters. The first and second phases are sold out, with the third phase to be launched in August, according to the source. The ministry will reportedly offer 17,000 units in the New Administrative Capital to the public in August, it says in a statement, adding that banks will provide loans, under the initiative, for applicants to finance the purchase of these units if they meet all conditions. Egypt is expected to see an annual expansion rate of 18.9% in mortgaged households in 2017, with expectations that about 300,000 households are to be sold through mortgage plans this year, according to a report published by global market intelligence publisher Euromonitor International.

CBE Fund to Renovate Hotels, Floating Hotels, and Tourism Fleets In February 2017, the CBE launched another initiative to support the hospitality sector in particular and tourism sector in general through funding the renovation of hotels, floating hotels, and tourism fleets that have become worn out as their owners were unable to refurbish them in light of the tourism downturn. The CBE launched this initiative to help troubled hotels, thus boosting the hospitality sector, which has been suffering in the past period, the NBE source explains. However, the industry started to regain momentum in the last three months. Under the initiative, banks secure EGP 5bn with an interest rate of 10%, extending over a maximum period of 10 years. Banks finance 75% of the total cost of renovation and renewal, while clients bear the remaining 25%. The main purpose of financing is for renovation and renewal of hotels, floating hotels, and tourism fleets, and clients seeking funding must also be proven to be committed in repaying their loans, according to the initiative. The initiative stipulates that local components be used in 75% of the renewal process, thus encouraging the local industry, CBE says in a statement. With launching such initiatives, the government is stepping up its efforts to support the real estate and tourism sectors, thus strengthening Egypt’s economy on the short and long terms and making its resilient against any current or future challenges. THE VOICE OF REAL ESTATE | 33

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EGYPT’S REAL ESTATE DEVELOPERS WEIGH ON NEW INVESTMENT LAW NO. 8 OF 2016 Following Egypt’s major reform plan to attract more investors to the country, Invest-Gate shares some insights from the market’s major key players on the incentives provided, following the recently issued New Investment Law No. 8 of 2016 such as tax breaks, subsidised utilities, the easing of bureaucratic procedures and permits, land allocation and ownership. BY JULIAN NABIL

Minister of Investment and International Cooperation Sahar Nasr “The long talks that took place prior to passing the law resulted in adding key articles in terms of governance, transparency, and investment incentives.The law will thoroughly end bureaucracy by enabling investors to finalize any required procedures in one day through different accreditation offices, affiliated to the Ministry of Investment and International Cooperation.” Through the new investment law, a ministerial committee has been established to settle disputes among disputed parties. Administrative bodies must abide by rulings issued by such a committee and enforce it within 15 days.

Former Minister of Investment and current CEO of AUR Capital Ashraf Salman

Sabbour Consulting and Sabbour Real Estate Chairman Hussein Sabbour

For me, the new Investment Law is part of the strategic and major reform measures the government is currently adopting. The soon-to-be enforced law will pave the way for future investments. We are on the right track, I believe.

The Egyptian government is on the right track with a true development plan that involves drastic economic decisions. I am very optimistic about the future and do not fear of what is to come.

The current circumstances in Egypt are of no exception… We just came back from a period of political, economic, and social unrest. We have seen harsh reform programs everywhere else in the world taking place; we just need to be on top of the game at both public and private sector levels.

Previous governments used to ignore problems to keep on going but no reform was ever put strategically until the problem escalated to what we face today. I am confident in the Egyptian government’s management of the current crisis and its reform strategy that is currently being put into effect.

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Tatweer Misr Managing Director Ahmed Shalaby It is difficult to judge because I need to see first the executive decrees along with a number of structural and administrative policies to be able to gauge the law. In general, the law is a positive move in the right direction and has a number of benefits that might work well for the real estate industry. Theoretically speaking, the law aims to specifically encourage industrial investment, especially in high-priority industries and areas in need for development. The- 10-year tax exemption amid recent tax hikes along with transfer of profits abroad without restrictions will help open up the Egyptian real estate sector. The new law will also allow the promotion of properties abroad by facilitating the selling of properties to foreign investors, thus helping attract new investments. As a real estate developer, I see that the one-stop shop, established following the New Investment Law, is extremely interesting as well. However, attracting additional investments can be realized by issuing laws or executive decrees as a proof that the pudding is in the eating. In other words, we need to create an overall investorattractive environment that goes in tandem with business surveys, which have more criteria than those covered by the law. The law by itself is not the magic wand for attracting investors but it is a good first step. The main issue for foreign investors is not only land allocation, but also the issuance of required permits and the logistics around how this would be done through a single authority. Whether this will happen or come under the purview of that one stop-shop system is yet to be seen.

Chief Financial Officer at Amer Group Riad Refaat The investment law in its new form mainly seeks to ease the flow of investments by streamlining and speeding up business procedures. The law’s impact will appear when it comes into effect. Yet, it is expected to positively affect the real estate market on the long term by luring local and foreign investors.

Chairman of Mena for Development Consultancy Fathallah Fawzy The new law is very good if it goes into effect. The law aims to attract local and foreign investments by solving most of the problems faced by investors today. The “one-stop shop” system for obtaining the entire required business establishment and operating licenses is one of the most important advantages of the new law; and it should be activated as soon as possible. The new law is important, as it will limit the authority of allocating land plots to the General Authority for Investment (GAI). The law also encourages labor-intensive projects and investments in remote areas along with projects exporting their products outside Egypt by offering them specific incentives.

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ALCHEMY ASPIRES TO NEW WAYS OF LIVING

ith core services in architecture, interior and product design, and branding place, Alchemy is an innovative design firm with unique designs, some of which were featured in this Ramadan’s series La Totfea’ Al Shams (Don’t Let The Sun Go Down), narrating different stories of life. Aiming to know where Egypt’s design industry currently stands, Invest-Gate sits with Alchemy Design Studio Founder Karim Mekhtigian to introduce a new style of contemporary design, following his multi-cultural 15 years of Parisian experience. Mekhtigian shares with Invest-Gate his views on the industry’s current and future status. Given your Armenian origin, being brought up in Cairo, and have studied Interior Design and Scenography in Paris, how did this blend of different cultures affect your designs? Any designer is affected and inspired by all life changes since birth. The surrounding nature you get exposed to and experiences you gain throughout your life affect your work in a way or another. There is no clear-cut definition that totally describes an Egyptian’s identity. We are a multi-layered society… a blend of different nationalities from ancient time. Merging and integrating cultural backgrounds, whether Italian, French, Islamic, or Coptic, into one single person is an underlying characteristic of all that is Egyptian. The problem

BY JULIAN NABIL

arises only when trying to be “just” an Arab, “just” an Egyptian, or “just” an Armenian – we are used to be everything without distinction. You established a design studio “Dessilk” in Paris after finishing your studies, so what made you decide to return to Cairo? I stayed in France to learn and gain experience but my intention was always to move back to my home country to implement what I gained throughout the years. I, actually, stayed in Paris for five years and returned to Egypt for a while. Then, I went back to Paris but this time around it took me another ten years to come back. Since I left to study, I was determined to come back and work here. There is a huge difference between the work environment in Egypt and Paris in terms of work ethics and norms. Hence, I was left in a bit of a struggle. In France, as is the case across Europe, you have to abide by the structure and system. In Paris, it is not about competition more than possibilities; either you can make it or not. If you function inside the system, you will be able to make it through. Rules, laws, and formalities lock your profession leaving no room for creativity. I feel… Egypt, on the other hand, is the complete opposite. Everything here is haphazard as there is no system or infrastructure. The choice at the beginning to stay in

When I design, I look back into history, foresee the future to my product, but remain in the “Now” when working.

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France or come back to Egypt was very challenging. What are the challenges you faced most when you started your business in Egypt? The main challenge was how to work and perform to a certain quality. I had a lot of problems to find good craftsmen. In addition, I had to bring people from abroad to train designers and technicians here to form a team of craftsmen, who can deliver a certain level of an Alchemy output. What make the Alchemy designs stand out among the rest here in Egypt? What is your mark on the architecture and interior design industry? One thing for sure, is that I try to capture the real essence of any product or space I work in, putting into consideration the different identities of clients and the individuality of the place. In other words, I study my client well. I think about layers, stories, and the memories they want in place and add to it our mix of cultures that identifies any Egyptian… I do not know what exactly differentiates me from the rest of my colleagues but this is my methodology when designing. What do you enjoy most about your job? I have an experience in transforming anything to anything and this is the nicest thing in our job. The 38 | INVEST.GATE | August 2017 - ISSUE 05

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poetic part in the profession is how to transpose and transform a tree to a bird and then to something else, and this is what I enjoy the most. The most difficult part about the transformation of garage to a livable space was how to open it and bring light inside. You blend the classic with modern trends in your designs; how do you do this? I am a contemporary designer and I do not belong to a certain style or trend. If you stick to a specific trend, you will run out of ideas one day. Fashion has nothing to do with our profession because we should do things that are timeless to last. In my work, I provide the elements of evolution in the spaces I design, making way for my clients to develop their own lifestyle. When I design, I look back into history, foresee the future to my product, but remain in the “Now” when working. It is important to have the collective memory of people in the future project.This exercise helps me create because understanding how you work today helps one to envision what could probably happen. This is the “Alchemy” of how I assemble things together to explore something new.

You acted as an art director for different initiatives to promote the local design industry with the Egyptian Furniture Export Council (EFEC), tell us more about it? From 2006 to 2010, former Foreign Trade and Industry Minister Rachid Mohamed Rachid had established such initiative, allowing Egyptian designers to showcase their work and place Egypt on the map of architecture and design. We held workshops and exhibitions in Paris and Milan with the aim of rebranding the image of Egypt’s design industry. The general mood during this period was very encouraging, and the country was doing very well at that time. What are the common things clients ask for when designing their homes? Do they care more about quality or budget? Every client has his own vision and image for a certain sought-after lifestyle. Everyone comes here asking for the highest quality; however, they remain extremely cautious about the budget. The Alchemy brand does not cater those who only want to get the job done. Clients do not usually need another home to live in but they need another way of living and this is what we always try to introduce in our projects. It is not about decoration, colors, and THE VOICE OF REAL ESTATE | 39

VOICE OF THE PEOPLE styling for us. Alchemy is more about offering a special way of life. How do summer homes designs differ from those of primary ones? The needs for both are different. A summer home is more social, free, and independent. It is a place, where you want to spend your leisure time and feel the vacation spirit with all its tranquility, calmness, and comfort. On the other hand, your primary home is about your everyday life, reflecting your personality and your story... where you are coming from and where you are heading. Your primary home is a micro system of your entity but a summer home is part of this whole system and it reflects small part of it. For summer home, you need a shade and a nice open view in front of the sea; so we try to maximize and naturalize the outdoor. But a home in the city is usually a part of a building so you have many angles and aspects to be taken into consideration. A primary home is a container of many things to consider, including work, dedication, family, and friends. How did the EGP floatation affect the industry in terms of costs and final prices? Did it have an impact on demand?

ADVERTORIAL Prices have gone over the top. I have projects that were signed one or two years ago, so how I can bear the product’s cost if prices are now 60-70% higher. Someone should explain what is happening and where we are going [economically], and if it is a transitional, permanent, or temporary phase. Such economic measures and reforms are probably longoverdue but they should have been taken in steps. Some people say that cost of living in Egypt is cheaper than abroad but we are not earning in a foreign currency. Prices hiked but no income jumped by 60%; so how can I raise 50 people’s wages in my company by this percentage?! However, the EGP floatation did not surprisingly affect the demand and my clients are continuing with the same pace. But you cannot take me as an example as I represent only 1-2% of the whole population. Do you think that the EGP devaluation will encourage local manufacturing? Do you always use imported materials or locally manufactured ones? I hope that this EGP float will encourage local manufacturing but encouragement should come from a government that has a clear vision. We are talking about ten years of implementation if they start now. I am not a freak about imported materials.

I always resort to local options first. My aim was to produce in Egypt but I, apparently, need 200 years. How do you see the future of design and architecture post float? I am a little bit worried but I have always to be optimistic. Independence and creativity need an open space and mentality. We have a lot of talented designers that the industry cannot make use of and are not given the chance to create so their talents are being killed. They should be put on the right platform and given enough space to excel. What advice do you give young designers and architects, today? Young designers and architects should work very hard, and be independent and committed. A lot of creative designers come to this world but how they grow and stimulate their talents is up to them… and this makes all the difference. What are your latest projects? Analogue, which is an Egyptian brand of everyday products that are sometimes high-end and very basic. It is a brand that reflects the simplistic nature of Egyptian craftsmanship, giving form to products influencing people’s daily lives.

COAST 82: A Majestic Oasis, Where Nature’s Beauty Unfolds Far from the hustle and bustle of Egypt’s populated cities, there’s an unspoilt, majestic oasis valley, where nature’s beauty unfolds. Located off the beaten track of the North Coast, just 82km from Marsa Matrouh, this extravagant estate is home to Hyde Park Development’s latest flagship project and holiday respite: Coast 82. Along the most pristine shoreline of the Mediterranean Sea, Coast 82 spans an area of 1.1mn square meters and embraces an “Oasis Valley” concept, featuring luxurious villas, modern chalets, and practical apartments, all encompassed within the development’s luscious parks, green valleys, breathtaking lagoons, and a 550-meter private beach. Unlike other beach destinations along Egypt’s North Coast, Coast 82 takes living to a whole new level with its inspiring and avant-garde masterplan, theme, and designs. Planned and designed by renowned firm E.D.S.A, the bold and modern architecture is carved within the native landscape, seamlessly blending with the stillness of the land and naturally arching with the flow of the currents, valleys and dunes. The asymmetrical design adds to the variety and uniqueness of both: the views and experiences. This treasure trove of beauty and tranquillity is bound by nature in every direction and dimension. The blue water and green landscape make a bold and natural statement of beauty, blending in with the modern

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architecture, its earthy tones, and refined indulgence. Every man-made structure is embellished with natural elements extracted from the development’s site, adding to its charm and seamlessly blending it with the natural surroundings. Coast 82 aspires to create authentic, family-centred communities with a meaningful “sense of place”. Enriched by social and environmental elements, Coast 82 establishes new heights and trends of contemporary coastal lifestyles. The contemporary holiday destination features a myriad of unit types and sizes, all of which aim to promote healthy lifestyles and create inspiring connections with nature. A wide variety of services and facilities are available to ensure ultimate comfort and peace of mind, including a five-star hotel, private clubhouses, and designated areas for storage and staff housing. Despite its recent launch, Coast 82 is already taking the North Coast scene by storm. Through its sponsorship of the RMC Theatre, Sea Hub, Coast 82 is now part of the biggest entertainment venue in Egypt’s favourite summer destination, bringing together the best singers and performers in the region. Visit the Coast 82 sales center at The Platform on North Coast Freeway for queries and bookings.

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INVEST-GATE PICKS TOP SUMMER HANGOUTS

TAMARA

A vacation on Egypt’s North Coast wouldn’t be the same without a proper place to relax and unwind. Invest-Gate goes out-and-about to check out the season’s best spots for spending lazy summer days.

SACHI BY THE SEA

Your vacation is not complete without a Sachi experience. Sachi is so popular that reservations are requested weeks ahead. Inspired by the Japanese word Sachi “Child of Joy”, the five-star restaurant brings a special fine dining experience, along with a bar and lounge to the North Coast. Whether choosing something light and savory or something more sophisticated, Sachi caters to all cravings while introducing a new style of contemporary Mediterranean fusion cuisine that is praised by all. Sachi is located at Hacienda.

Gaby’s Gaby’s is one of the best places for family gatherings and friends whether for lunch, dinner, or quick drinks. Gaby’s presents a diverse menu of Mexican, French, Oriental, and Middle Eastern cuisines with a “home cooking” feel and a sweet Bistro. Gaby’s is a quality at its best, catering to all. Described as a comfort food restaurant, Gaby’s is located at The Lakeyard at Hacienda Bay and Telalians at Telal on the Alexandria- Marsa Matouh Road.

Kiki’s Beach Bar

Located at the coast of the beautiful Hacienda White, Kiki’s Beach is an all-day experience. Kiki’s welcomes its guests to enjoy a day by the Mediterranean Sea, offering a hippy beach bar and a fine dining restaurant by night. KiKi’s is the latest of the Hacienda White project by Palm Hills this summer. Reservation is must but guarantees an ultimate experience.

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Tamara Lebanese Bistro is another inviting experience, catering to social gatherings of family and friends. It is a tale of two worlds, mixing traditional food with modern flair. Tamara brings the taste of contemporary Beirut by the sea shores of Marassi Beach Club House next to Mori Sushi, where you get to enjoy lunch, dinner, or go for just drinks by the sea shores. Tamara is all about the best flavors of Lebanon.

Mori Sushi

This summer season, Mori Sushi hits the North Coast of Egypt at two of the most sought-after locations, Marassi and Diplomatic Village in Sidi Abdel Rahman. Mori Sushi is the first true fusion cuisine that continues to be adored by Egyptians. The creative Mori Sushi menu includes fusion sushi as well as alternative options for those, who are looking for something different. Specialty locations also feature a Grill Menu, offering an even larger variety to choose from, such as Australian, Wagyu and local beef, as well as, grilled chicken and pan-seared salmon, all with a Japanese fusion flare. Mori Sushi is synonymous with fast, fun, and fresh sushi and grill items that are perfect to eat alone or share with your friends and family.

Sea Hub

The Lemon Tree

Especially this summer, Maxim’s BO Islands debuts with Sea Hub, “the first summer complex with a unique festive mood,” as the developer describes. The Sea Hub caters to all, comprising a service center, restaurants and cafes, kids area, RWC Theatre, and a number of shopping outlets. Its featured brands include, Le Pacha, Rony’s, La Asiatique, Lucca, The Kiosk, and Rigoletto, to name a few.

Last but not least, The Lemon Tree on the beach of Telal is another muststop venue this summer season. Following its massive success last year, The Lemon Tree is back with a unique fine-dining experience on the North Coast. Inspired by nature and sunlight, a boho-chic haven filled with greenery, art, and organic materials, The Lemon Tree restaurant, lounge, and beach bar features a contemporary cuisine offered for late lunch to enjoy the sunset on the beach and of course dinner. As popular as it is, The Lemon Tree also requires a week-ahead reservation. THE VOICE OF REAL ESTATE | 43

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EASE VACATION RENTALS PROCESS WITH CLICK OF A BUTTON

BY YASMIN ELBEIH

ntrepreneurs with a dream to modernize the booking process for vacation rentals are working to maximize the potential of real estate wealth at premier holiday destinations, including in the foremost the North Coast. InvestGate speaks to the founders of Agaztak and Elsa7el.com, highlighting how such tools are altering the opportunities for vacation homeowners and rental consumers alike. One of the first apps launched with this vision is Agaztak; Founder and CEO Hisham Refaat says that the idea dawned upon him during his vacation with friends in the government-owned Marina El-Alamein resort in the summer of 2012, as they mused about how so much “beauty and real estate wealth…could be so underutilized.” Hence, he tells Invest-Gate that he came up with the idea of creating a real estate portal with the aim of easing the booking process for local consumers and turning the North Coast into an international tourist destination. “I think, in terms of potential, this is a great destination, with its white sandy beaches given the limestone geology of the area and the turquoise seawaters as opposed to the darker shores of Europe’s Riviera,” Refaat notes. Another reason for the appeal of the North Coast, he mentions, is that the water is at internationally-acceptable swimmable temperatures (20°C) for eight months in the year, as opposed to five months on the other side of the coastline. The opportunities for launching a rentals portal are further magnified by the fact that the number of privately-owned rooms in the North Coast exceeds the number of hotel rooms available nationwide. Founder of short-term vacation rentals platform Elsa7el.com, Karim Megahed, came up with the idea of the portal after a booking experience with his family in a North Coast resort went awry. He identified a gap in the market, as the likes of Airbnb. com and booking.com do not offer private listings, and made use of the massive supply and demand for rentals on the Mediterranean coastline. “We capitalized on the North Coast because it has the most market participants,” he says, noting that in several locations across Egypt with a wealth of privately-owned properties are home to limited hotel rooms. Megahed plans to expand Elsa7el.com nationwide, regionally, and eventually, globally, under a different brand name. The expansion to Al-Sokhna will take place by October, followed by an expansion outside Egypt by next year. Like Refaat, Megahed’s vision is to heighten international tourist inflows to the North Coast; “I have been to the other side of the coastline, I have visited Spain and Italy, but honestly, our side of the beach is so much more beautiful,” the Elsa7el.com founder believes. Megahed adds that the three consumer airports on the coastline running from Marsa Matrouh to Borg El Arab allow for further partnerships with low-cost airlines, particularly when ride-hailing apps such as Uber and Careem are making transportation

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on the coastline easier than before. As the purchasing power of foreigners heightens in Egypt with the declining value of the local currency, all that remains to achieve the vision of expanding the clientele pool beyond the local one is to adequately market the coastline abroad. “I have never seen the Tourism Development Authority marketing the North Coast aboard. Instead, we focus more on marketing the Red Sea, Aswan, and Luxor. Tourists are not highly interested in resorts; they prefer the feel of a town…The North Coast, today, is not the way it used to be, there are restaurants and nightlife…it is ready to attract international tourist inflows,” Megahed argues. Elsa7el.com is unique in offering selective, high-end listings and customer support, according to Megahed. The Elsa7el.com founder says that his team focuses on accuracy and often offers a payment-ondelivery service, in addition to their usual online payment service, due to the low credit card penetration rates in Egypt. “Our biggest challenge is the local culture and the fear of online payment. We are in 2017; we need to overcome this fear in order for our economy to boom and for us to use the modern mean of technology such as the Internet to our benefit,” he tells Invest-Gate. The Egyptian tourism industry has been suffering from low inflows since the uprising back in 2011 and particularly after the Russian passenger jet crashed in the Sinai in October 2015. Several small-scale terrorist attacks have also taken place since then, including an attack that killed two German tourists in the Red Sea resort town of Hurghada last month. Refaat notes that the security concerns over Egypt are one of the primary challenges his business faces. “We also need help from the government, developers, and homeowners. We need the North Coast to be included in the Tourism Development Authority’s marketing campaigns… We need access to government-owned resorts such as the Marina. Also, we urge homeowners and developers to help us with modernizing units that fit international standards,” he suggests.

OFF-PLAN PROPERTY VS. EXISTING PROPERTY: WHICH TO BUY?

BY JULIAN NABIL

With the continuous rise of real estate prices due to persistently high demand, developers have begun to expand their off-plan investment offerings amid different facilitations to ease the purchase cost for buyers and help them secure better financing terms from their lenders.

market prices. Early buyers can capitalize on growing prices and cash out by selling the contract before the project is completely delivered.

Off-plan properties are usually sold before they are constructed or completed, with a small deposit initially required in advance while the remaining value is paid on installments, according to a schedule agreed upon with the developer. Developers sometimes also offer incentives for early adopters.

Neighborhood

With the growing supply, it has become common for homebuyers to be caught in a dilemma... between buying off-plan homes with comfortable installment plans or existing properties with all payments due up front. While each option presents its own series of advantages and disadvantages, the right choice is largely based on the needs of each buyer, weighing financial factors against time. Purchase Price A main aspect to consider in any investment is the purchase price. For resale properties, there is often room for negotiation. While for off-plan investment, the price is already set. It is also believed that the price of upcoming off-plan homes will rise due to the application of the new value-added tax (VAT), which will affect the price of construction and finishing materials.

The resale value of existing homes is generally lower than new ones. However, this still depends on the neighborhood’s growing market value. Other aspects go into the investment value of a property, one influential example is location. The preference could differ from one person to the other but it is generally one of the main advantages that could trump everything else and help homebuyers on the fence make the right decision. Community when it comes to resale value is crucial, as an investor or a homebuyer is not buying the actual brick and mortar but presence in a neighborhood; in addition to the boosting effect of the reputation of the real estate market for the location chosen. In a poll conducted by Invest-Gate on the most important factor a buyer takes into account when purchasing a home, other than price, 54% of the respondents chose location and 43% picked the surrounding community. There is a main advantage to older neighborhoods. Usually located in or close to the city center, older well-established neighborhoods are surrounded by sound infrastructure, serving the area, public transportation, a variety of schools, supermarkets, clubs, and shopping centers.

As occupancy rates fall in the Sinai and Red Sea governorates and primary international tourist attractions such as Sharm El Sheikh and Hurghada, promoting the North Coast in international markets takes a backseat.

New homes are more expensive but are usually priced lower than their actual market value for a number of reasons, particularly that builders generally want to secure a limited number of sales at the beginning to get the next phases of the project going. Another benefit to purchasing off-plan properties is that the buyer will pay the property’s value at today’s prices, rather than future estimates, whereby the property’s value is likely to appreciate over time.

Agaztak’s service includes a ground team offering check-in and checkout services, as well as housekeeping, catering to the same high-end clientele that elsa7el.com targets.

There are also custom-tailored payment facilitations, like mortgage loans provided by banks under certain terms, with interest rates, monthly installments, and down payments that are relatively lower than normal loans and with a longer repayment period.

The outlook for maximizing international tourist inflows to the resorts lining the North Coast may seem slim under the current security situation in Egypt. However, initiatives easing the process of booking private property develop the opportunities for vacation homeowners, local tourists, and eventually foreign tourists.

Move-in Timeline

As for newly constructed properties, they usually require minimal aside from plumbing, electricity, and core finishing.

Timing is another major factor to consider. Resold homes are more convenient for buyers, who do not have time on their side. A house, ready for an immediate move in, is a crucial bonus. However, for buyers mainly concerned with investment and resale value, a five-year wait is only part of the investment plan.

Another bonus to off-plan houses is that builders sometimes allow for some flexibility for buyers to customize their homes’ designs during the construction phase. This may require an extra budget but a buyer may deem that adding one’s personal touches is worth it.

Delayed delivery of yet-to-be-built houses is a risk to be considered, as many uncontrollable factors could affect the time of delivery.

Whether the decision is to purchase an existing property or an off-plan property, investing in real estate in the current market is believed to be one of the best investments anyone can make. However, the main equation in the decision boils down to time versus money, an aspect that is largely shaped by the purpose of the purchase.

Resale value Off-plan homes will often have a better resale values, as their prices are likely to rise significantly by the completion date and be worth more than their initial

However, buying in a newly-constructed area gives one the advantage of being the first owner and guarantees that the building and facilities are new and unused; in addition to better utilities and infrastructure. Maintenance and Renovation Homebuyers should know that resold homes may need some upgrades to integral components, such as fixing drainage issues and updating the electrical system. Although with desired changes, come higher costs. All renovations will add to the home’s future value.

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