Wed, 07 Feb 2024 - 05:00 GMT
Wed, 07 Feb 2024 - 05:00 GMT
Cairo – February 7, 2024: Egypt’s leading real estate developers earned a collective sales figure exceeding LE 700 billion in 2023, surpassing 2022’s total of LE 332 billion, according to a new report by the Board Consulting.
Topping the list of the most popular real estate locations was East Cairo, with the report pointing towards expansions in Al-Mostakbal City and the government's headquarters in new urban areas.
West Cairo experienced growth with over 70 residential projects sold in 2023, witnessing a surge in land acquisitions due to expansions in Sphinx City and New Zayed City.
The North Coast was reported as the “trendiest” and a sought-after second home destination, experiencing a surge of land acquisitions driven by high return on investment (ROI) and becoming a favored location for investors, according to the report.
The Red Sea region, including destinations like Makadi Bay, Soma Bay, and El-Gouna, witnessed significant development and “evolving into attractive ‘first home’ options”.
The report attributes the surge in real estate sales to multiple external and internal factors; global inflation, driven by geopolitical conflicts and rising US interest rates, as well as rising prices in Egypt which led to individuals investing in real estate to preserve the value of their money.
As for the top developers in 2023, Talaat Mostafa Group (TMG) topped the list with sales of LE 140 billion, driven exclusively by their projects in East Cairo without broker involvement.
TMG expanded its presence by launching the mega project BENAN in Saudi Arabia, spanning over 10 million sqm, and acquiring a 39 percent stake in Legacy, establishing their foothold in the hospitality sector.
Mountain View secured second place with sales of LE 61.1 billion, marking a significant increase of 98 percent over 2022.
Ora and Palm Hills claimed the third spot, each achieving sales figures of LE 59.5 billion. Ora witnessed a substantial 207 percent increase over 2022, while Palm Hills reported a 129 percent increase.
City Edge secured fourth place with sales reaching LE 38 billion, reflecting a 100 percent increase over 2022.
Madinet Masr followed closely in fifth place, achieving sales of LE 35 billion, marking a 212 percent increase.
Emaar Misr recorded sales of LE 30.2 billion, experiencing a slight decrease of -9 percent compared to 2022.
SODIC achieved sales of LE 29.4 billion, representing a 38 percent increase.
Founders recorded sales of LE 27.6 billion, marking a 35 percent increase.
New Giza achieved sales of LE 26 billion, reflecting a 63 percent increase, while Tatweer Misr secured LE 25 billion in sales, experiencing a significant 213 percent increase over 2022.
Ahmed Zaki, Managing Director of the Board Consulting, explained that global unrest and disruptions in commercial routes significantly affected raw materials, especially construction steel prices, which surged in the black market to LE 55,000 per ton. Construction costs experienced an average increase of 80 percent (excluding the fully finishing materials), contributing to a corresponding 60 percent increase in overall construction costs.
These costs typically represent about 35 percent of project investments, leading to an average 80 percent increase in selling prices, according to a statement by the consultancy.
The report emphasized the significance of supporting the secondary market for the new generation and underscored the importance of implementing a well-designed mortgage system to manage resale risks effectively.
Finally, the report advised developers to prioritize timely construction to mitigate potential consequences and emphasized the need for innovative solutions in the rental market to address affordability challenges experienced by younger generations. Developers should actively monitor consumer behavior and adapt to market changes for ongoing success in this dynamic industry.