Cairo – Decypha: As one of the only industries in Egypt witnessing a significant upwards trajectory, the Ministry of housing is planning a further wave of land tenders for investment purposes following the issuance of the new investment law.
With the law currently in its final phases, Decypha sat with Egypt’s Minister of Housing, Utilities, and Urban Communities, Mostafa Madbouly, to understand how the state is working on utilizing the well performing industry to attract foreign investments into the country.
In your opinion, how do we attract foreign investors?
For the real estate industry, mainly through facilitating the procedures of obtaining land for projects. Our goal here is to ensure the attractiveness of the Egyptian real estate market to foreign investors; further easing the process allows us to send a message of confidence about the feasibility of investment in the sector.
The laws are the obstacle that investors most fear, including the law governing the New Urban Communities Authority (NUCA), when will it be amended?
The real estate regulation has been announced. The purpose here is not to imprison the investor. Additionally, no land will be withdrawn. The regulation also addresses fortification of contracts. Nevertheless, the law will activate a fine-based system for non-committed investors.
Will the ministry offer land tenders after the issuance of the new investment law?
We have an investment plan for the projects of the Ministry of Housing, which we will release after the issuance of the investment law.
We will introduce land for real estate projects, as well as the implementation of new expansions in Sheikh Zayed City and the city of 6 October.
Furthermore, we will launch a clear plan to facilitate procedures for developers to aid them in completing their projects, including the facilitation of the procedures for the extraction of licenses; priority here will be given to investors buying land in US dollars.
Have you met GCC investors to understand their investment needs?
Indeed, during my recent visit to the UAE, I met with some Emirati investors and listened to their needs. We presented our real estate projects and were very receptive to the investors there, which many of them are waiting for their official offering. Some of the key projects that UAE investors found of interest were the new Administrative Capital, the expansions of Sheikh Zayed City, the new Alamein city, and the new Mansoura city. The same positive stance was witnessed with Saudi investors.
What about the policy of dividing land into smaller plots and offering it in public tenders?
The easiest way for the Ministry is to divide land into plots and offer it to local investors for the implementation of ordinary projects. Yet, we seek to create an investment identity for each city, and participate in projects that provide sustainable resources, therefore, we decided to modify NUCA’s strategy, to rely on partnership with investors.
During the past period, some land prices in new cities saw an unjustified rise due to the participation of professional speculators in land auctions, how is the ministry handling this issue?
We have increased the value of the insurance paid to participate in land auctions, in an effort to prevent those who participate in the auction only to raise prices. Additionally, we will only be limiting entry to operational companies, excluding those considered “under establishment.”
Why is the government pumping billions to build new cities at the current critical time where the state is considering following austerity measures?
In principle the state budget does not bear any costs for the new Administrative Capital project, the Alamein project, as well as other projects in new cities. All costs incurred from our side are provided through NUCA, which has its own budget.
Secondly, a project such as the new Administrative Capital is considered one of the vital projects that will solve the congestion crisis in Cairo, and thanks to this project, the government buildings will be moved out of the center of Cairo.
Furthermore, it is well known that the construction and real estate sectors are some the most labor-intensive industries, and the expansion of these types of projects provides jobs for thousands of workers.
For the new Administrative Capital, for example, there are more than 30,000 workers and engineers on the site. The demand for property in other areas such as Badr, Shorouq, and Ain Sokhna has soared due to proximity to the new Administrative Capital.
Additionally, most of the workers who fled back from Libya were enrolled into housing projects, such as the social housing projects and the new Alamein project.
How many investors have shown interest in the new administrative capital?
Currently, we have more than 100 offers from both local and foreign investment companies, who are ready to pay billions for participation in the construction of recreational, residential, medical and other projects.
It was previously announced that NUCA will be the largest real estate developer in Egypt. Have you succeeded in this?
For NUCA, the current years are considered the best in its history. The authority’s income has jumped four folds, and the investment plan for its projects have witnessed continuous increases over the past years, with investments worth EGP 4.8 billion during fiscal year 2012/2013, which rose to EGP 7.7 billion during 2013/2014. By the end of the current fiscal year, investments are expected to reach EGP 37 billion.
By Decypha Editorial Team
