CAIRO – 15 July 2018: “Over the last two centuries, about 90 percent of the world’s millionaires have been created by investing in real estate,” argues an article penned by Jonathan Yates published in The College Investor.
The article further poses the argument that property investment is the easiest way to create money; of course, with real estate, you have to have money to create money. Given the increasing population in Egypt and people’s aspiration to make money, there has been a rising interest in real estate investment. Still, many of those who want to invest in real estate are not sure where the safest and the most money-making location is. After sieving through articles, studies and interviews, as well as sitting down with a number of property consultants, Egypt Today looks at the positives of investing in the New Administrative Capital.
Key facts and figures
Developed by the New Administrative Capital for Urban Development after the launch of the idea in 2015, the new capital is the government’s solution to accommodating Egypt’s ever-growing population and expanding urban areas, a much-needed move for both economic and social development. Commenting on this, CEO of the New Administrative Capital for Urban Development Company, Ayman Ismail, stated at the Euromoney Conference held in September, “Cairo is facing a challenge with government institutions and offices being centered in downtown, and the plan here is to relocate these offices to the project in the ‘government district’ while also serving an economic purpose of acquiring revenues worth $10 billion by 2030, and being in proximity to Cairo and the SCZone.”
The new capital is set to see the headquarters of all the banks in Egypt, as well as the buildings of the ministries, parliament and administrative affairs’ buildings, according to remarks by Head of the Armed Forces’ Engineering Authority Kamil El-Wazir during the opening ceremony of the first phase of the New Administrative Capital. Wazir said, “We were assigned to work on the government district, which will spread over 1,133 feddans and will include buildings of ministries and the parliament.”
The government district will be finalized by 2018 and state institutions will be relocating in 2019, according to the CEO of the New Administrative Capital for Urban Development Company. The headquarters of the Egyptian presidency will also be relocated to the New Administrative Capital by June 2019, said Chairperson of the New Administrative Capital for Urban Development Ahmad Zaki Abdeen.
Features a total of 20 residential neighborhoods worth $15 billion, the project’s first phase is estimated at $8 billion and spans over 12,500 feddans, featuring 25,000 residential units (eight of the 20 residential units) and infrastructure projects, according to Minister of Housing and Urban Communities Mostafa Madbouly. The residential areas in the project will include an array of accommodation units including apartments, villas, townhouses, office spaces and commercial areas.
Moreover, the project will be equipped with top facilities including educational, healthcare, accommodation and hotels, entertainment and transportation; and, an international airport. The project will also be home to 20 towers, one of which will be the tallest tower in Africa with a record height of 345 meters, according to Madbouly.
The New Administrative Capital is, therefore, designed to become the new regional investment hub, making it the ideal opportunity for those wanting to invest in real estate.
Buying into the New Administrative Capital
Whilst talking about the benefits of the New Administrative Capital, Ismail pointed out the benefits of building mixed-use developments that are able to serve a large number of the Egyptian population. Building on this, Abdeen argued that housing prices in Cairo will decline significantly in the coming years because of the rise of supply in the market after completing the construction of the planned 350,000 housing units in the capital, however, the New Administrative Capital, so far, remains fairly priced.
Buying into the new capital is a good investment opportunity for a multitude of reasons, most prominently: Its location. Misr Italia Properties Co-CEO Mohamed Hany El-Assal told Invest-Gate, “The best thing about the New Administrative Capital is its location; it’s considered a natural extension to Cairo, while at the same time, it connects Cairo with Ain Sokhna and Ras Sudr. The New Administrative Capital is a smart city, with infrastructure and services that are the latest state-of-the-art that has never been executed in Egypt before.”
Agreeing with this, Property Consultant Hesham Mohamed, who works for multiple real estate companies, tells Egypt Today, “Working with projects in 6 October, the Fifth Settlement, and the New Administrative Capital, I can easily tell you that the New Administrative Capital poses the best real estate opportunity in terms of future location, as well as appreciation.” Followed by real estate in the Fifth Settlement and then 6 October, in this order, those residing in the New Administrative Capital will be better connected to services and administrative facilities, especially given the move of the ministries and parliaments, as well as civil administrative buildings, there, explains Mohamed.
Mohamed Khaled, a commercial real estate consultant, tells Egypt Today, “For businesses looking to invest their money in a good location and ensure big returns, the New Administrative Capital is perfect; this is if one if buying and if the business if large-scale.” When it comes to small-scale businesses, Khaled explains that renting in the New Administrative Capital would ensure solid profits, even if the rent is higher than other areas in Cairo.
“Anything is expected to make money in the New Administrative Capital. Even if you make a kiosk for Koshri, it will make good money. The new capital is a great business opportunity for everyone and for Egypt.” Therefore, purchasing there for business purposes would be very rewarding. Turning to residential investments, Khaled explains that purchasing in the new capital is a good idea due to the fact that one would be in the middle of it all, as well as the solid appreciation rate that is expected due to the location of the capital.
Another benefit of investing in the New Administrative Capital is the green lifestyle that comes with it. In an interview with CBC TV channel, the Chairperson of the New Administrative Capital for Urban Development explained that the New Administrative Capital is set to be a sustainable and smart city, with a green lifestyle. Furthermore, the capital is set to have top-notch infrastructure and facilities, ensuring that those who purchase there would not be at risk of having their areas deteriorate, according to Hesham.
“Some of the areas that are being privately-built around Cairo may be using cheaper material or things that are not as good as the ones that the government ensures that developers use in the New Administrative Capital, therefore, investing there would not only mean your mind being at peace because you know that the quality is great, it also means that you would be getting more for your money because you are getting a higher quality for a lower price or, at the very least, a similar price,” explained Hesham.
In a similar vein, Dr Mahmoud al-Adl, Chairman of Master Builder Group tells Egypt Today that investing in the New Administrative Capital is the best investment for the Egyptian and foreign investors, adding that President Abdel Fatah al-Sisi care for the project adds value to it and increases its worth. Adl further explained that any smart real estate investor would invest in multiple opportunities in the new capital, as the New Administrative Capital is the project of the future.
“The capital will also be home to the world’s largest theme park, three times as big as the New York Park. I believe that the park model has been completed and that they are now under construction, meaning that it has facilities that, if kept in good conditions, as I expected they will be, will ensure higher appreciation and a vibrant living scene,” argues Noura Samy, a property consultant, who explains that she always likes to inform her customers that investing in the New Administrative Capital is better than elsewhere in Cairo right now.
“The market is expected to continue to operate normally being a safe investment haven to many buyers … there is a growing demand on the Administrative Capital city that will continue to rise in 2018,” Mohamed Banany, senior vice president at Coldwell Banker, told Egypt Today. Building on this, Mohamed Nawar, a property consultant operating in Cairo, told Egypt Today, “The growing demand for the New Administrative Capital makes it a safe haven for investors, and ensures that their money will not be in danger. It is not simply a way of ensuring that their money is well invested and that they get their money’s worth, investing in the new capital is also a way of ensuring high appreciation rated.”
Generally speaking, the CEO of leading real estate developing company Tatweer Misr, Ahmed Shalaby, previously told Egypt Today, “It is not really a matter of what to invest in, the question is rather whether there is another safe investment that will ensure that the value of your money will not depreciate other than real estate.”
New Administrative Capital to be the first smart city in Egypt
Implementation of housing units in the New Administrative Capital was successfully completed, but delivery will be within a year, until the completion of installing facilities and services, Khalid Abbas, deputy minister of housing for follow-up of national projects, said on Friday.
He added in a phone interview on DMC that the ministry will offer 2,048 housing units in the capital’s first phase, with different spaces and payment methods. Abbas noted that for the first time the reservation of units will be electronic, allowing clients to choose their units, pointing out that the New Administrative Capital will be the first smart residential city in Egypt.
The new capital is planned to be a sustainable city, housing the ministries, parliament, Egyptian Media Production City, presidential palaces, and embassies.
Twenty-five public and private construction companies have been mandated to carry out the infrastructure projects and build the residential neighborhoods of the new capital, while the army is only responsible for managing the project.
The company provided about 170,000 jobs in the construction operations and the coming phases of the project will require more workers, stressing that the state treasury does not bear the burden of financing any phase of the project.
Housing prices in Cairo will decline significantly in the coming years because of the rise of supply in the market after completing the construction of the planned 350,000 housing units in the capital.
The New Administrative Capital Company is 51 percent owned by the armed forces and 49 percent by the New Urban Communities Authority (NUCA). The paid-up capital of the company amounts to LE 20 billion, including contributions from the armed forces and NUCA, and the authorized capital is LE 204 billion.