With their own real estate sectors enjoying a glut of funds, Gulf investors are turning their eyes to lucrative new prospects further west and north. While Egypt, Morocco and Lebanon are already favoured outlets, other countries such as Syria, Tunisia and Libya are also expected to benefit substantially in the coming years.
Rising disposable incomes, low land costs, a burgeoning population, rapid urbanisation, the growth of the mortgage market and a favourable investment climate are creating a huge demand for new residential and commercial properties in Egypt, according to local developers and real estate agents. Dubai's semi-state owned developer, Emaar, is planning two flagship projects in Cairo that will involve residential, retail and leisure properties aimed at the country's rapidly growing middle class.
Uptown Cairo is an entirely new community that will be built along the Muqattam Hills not far from the historical city centre. Costing some $2.1bn, it is due for completion in 2013. Another project in New Cairo City, east of the capital, is expected to cost $1bn and will feature primarily residential properties.
Other Gulf investors in Egypt planning substantial new projects include Dubai's Damac, the Majid Al Futtaim Group, which specialises in the construction of shopping malls, Qatari Diar and Kuwait's Al Kharafi Group. Many are working alongside, but in competition with, local developers such as Sodic, the Talaat Mostafa Group and Palm Hills Development.
Damac's chairman, Hussain Sajwani, thinks New Cairo City along with Sixth of October City are "prime spots" that will attract upper class and upper middle-class buyers. They are due to house some 3m inhabitants each, bringing the total population of Cairo up to 22m.
The buyers, Sajwani says, will be attracted by plans to build communal facilities in these satellite urban areas, including green spaces, swimming pools, clubs, gyms and children's amenities. The rising demand for retail space is another attraction for his company, he told the Oxford Business Group (OBG) earlier this year.
However, Sajwani also cautions that investors could face a situation of oversupply in the medium-term as well as changes in global growth cycles. "Though oversupply is not an immediate threat, we are very aware that it could become one during the next few years," he said. "We must be prepared to tackle any market changes."
"Developments such as our Nile Corniche project marry commercial and business...