Is Egypt the next big thing?

Stuart Matthews, Editor.

Is Egypt the new place to be? Contractors and developers with interests in the country are trying to convince us that the answer is yes. They might be right.

Let’s start with some numbers. According to the World Bank there are some 81,527,172 people living in the country, that’s 40 odd million more than in all of the GCC countries put together, which combine to reach 36.7 million.

With organic population growth of more than a million people each year, there’s a natural rise in demand for completed builds.

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Development is occurring on the outskirts of the crowded capital. Cairo Festival City, being developed by Al Futtaim Real Estate, is due for completion in 2015. A school and some commercial space already exists and the first phase of residential work got under way last year.

Al Futtaim is also behind a Mall of the Emirates clone, to be built in the country. Although not a replica of the mall in Dubai, current plans for the Egyptian version include a ski slope. Contractors are going through pre-qualification now.

Emaar is also after a slice of the action, with Emaar Misr working on three ongoing projects: Uptown Cairo, Marassi and Mivida. The first homes in Marassi and Uptown Cairo are expected to be handed over this year, and in Mivida in 2012.

According to Hazem Ashry, general manager for Emaar Misr the ‘dynamism’ in the property sector has attracted several GCC contractors to tender aggressively. Egypt is clearly seen as less of a ‘closed shop’ than the lucrative Saudi Arabian and Kuwaiti markets, and is a country with some genuinely tough competition in the sector.

The Egyptian government is backing private enterprise with infrastructure development. It is keen to attract foreign investment to these endeavours, with Osama Saleh, chairman of the Government Authority for Investment (GAFI) stating the scale of the issue very simply.

“In total, there are 47 projects in the public utilities and infrastructure sectors in Egypt worth $25 billion, which provide ample scope for foreign investors to come and share their expertise and knowledge,” he said.

With the government behind development and looking for foreign investment, a relatively competitive construction market, and steady demand, the outlook would appear rosy.

However, there are challenges. Egypt’s per capita GDP lags way behind the world average and even further behind that of Gulf countries. That said, it has been going in the right direction. It rose sharply from a miserable $1041 in 2004 to $1990 in 2008 – the latest available figures from the World Bank.

The country is battling to boost this figure, diversifying its commercial interests into areas such as outsourcing, where it is gaining ground on the world’s outsourcing giant, India.

That giant population figure also translates into a massive natural resource. Egypt is a graduate factory, producing enough university-qualified human resources to completely repopulate Bahrain every two years.

Plenty of construction professionals in the Gulf originate from Egypt. If construction opportunities in Egypt continue to improve, they may soon find themselves heading home.