CAIRO: An Egyptian-Saudi holding company for real estate has been established under the name of Al Oula Egypt, with a paid-in capital of LE 500 million. Al Oula Development, one of Saudi Arabia’s largest real estate companies, together with other Gulf partners, will retain 50 percent ownership of this new company, while a consortium made up of the National Bank of Egypt, CIB and Naeem Holding Company, will own the remaining 50 percent.
“There is a big boom in real estate in Saudi Arabia. There isn’t a real estate company in the Middle East that has real estate investments and real estate developments, Ahmed Naim Badr, managing director of Naeem Holding in Egypt, a Saudi investment banking institution established in Egypt in 2005 and acting as the holding company for all the non-Saudi business of the Saudi company, said to The Daily Star Egypt.
According to Badr, Saudi Arabia is the cash cow of the Gulf, with a great deal of liquidity due to the recent oil boom. While the Arab world has been looking at Dubai as the most strategic capital of the Arab world, in terms of assets, the country has become over-saturated, unlike Egypt, where there are still plenty of assets to be bought, states Badr.
Assets to be bought in Egypt have extended to the real estate sector, which has a lot to offer investors due to the country’s geographic location, weather, growing number of tourists and government reforms in the industry. This has not gone unnoticed by Naeem Holdings, who have had their eyes on the Egyptian real estate sector since they were established in Egypt, and currently own 60 percent of Coldwell Banker.
“Real estate and energy, those are the main bread and butter of (our) company, said Badr.
The Egyptian real estate market is in fact potentially on its way to becoming the bread and butter of the Egyptian economy. After the government slashed property related taxes to make owning real estate in the country affordable, a growing middle class sector (thanks to greater investments and economic confidence in the country) have become property owners, which has given the local resale market a boost.
As the process of buying property in Egypt has become easier and more affordable for foreigners, combined with the fact that inward foreign direct investments in the country are on the rise and recently elevated oil prices have generated hefty capital in the Gulf, the numbers of Arab investors with cash waiting to be invested are beginning to pour their liquidity into the Egyptian real estate market, which they see as a risk-free investment, thus setting the ball rolling in this sector.
Over the past three years, Arab investment has poured into the gigantic CityStars complex in Nasr City. The total initial investment cost for the CityStars project amounted to over LE 5 billion.
Other Gulf investments in real estate include the mega Dubai-based developer, Emaar Misr for Development S.A.E., a subsidiary of the UAE-based Emaar Properties and Artoc Group for Investment and Development, which has signed a memorandum of understanding (MoU) with the Alexandrina Bibliotheca (Alexandria Library) for a waterfront redevelopment project, which will provide a spectrum of facilities on Kouta Land, west of the library.
The MoU marks the fifth major foray into Egypt for Emaar. Last year, the company announced that they are in the process of developing and launching the 4 million square meter Cairo Heights residential, commercial and recreation development project as well as a 280 acre integrated community based in Egypt’s Smart Village, featuring a convention and exhibition center, hotel, serviced apartments, office space and shopping village. The company has also announced that there are more projects in Egypt on the drawing board.