Newly formed Egypt Real Estate Development Chamber has announced it will designate the task of reviewing building licenses to consulting firms hired by the government. The list of firms that will be awarded the work will be curated by the Egyptian Engineering Syndicate from its membership. The announcement, made during the Chamber’s first meeting, is a positive one aimed at reducing bureaucracy to help create a more appealing real estate market for investors.
JLL research for Q3 2016 shows prime rents at a price peak for residential, office, and retail properties. It is widely expected that the Egyptian real estate market will continue to see growth for the coming few years with gentle peaks and troughs, but there has been commentary in the media that suggests Egypt is in bubble territory and by 2018 could see a burst. Egypt’s decision to move the Pound away from the dollar peg, the implementation of VAT, and the expected increase in daily living costs for the population, are all factors causing speculation.
The creation of a Public Private Partnership to review building licences is one example of efforts to quell potentially damaging speculation. Egypt’s economy is facing uncertain times and the formation of the Real Estate Development Chamber comes at the right time.
According to the chairman of Egypt’s Real Estate Development Division, Mamdouh Badr El-Din, work on the first draft of the law which will oversee regulatory changes to the Egyptian market is about to start. The Egyptian property market offers huge potential for both domestic and foreign investors but has long been plagued with a reputation for bureaucracy.
One of the primary features of the document will be the request that real estate developers must submit financial and project data which will enable the body to classify them accordingly. We see this is a boost to the market as investors will be able to judge a developer according to stable business practice, and because developers at the higher end of the scale will be able to charge a premium for their properties.
To coin a well used phrase, regulation in Egypt will force a flight to quality. For more information about Egypt Real Estate Market contact our colleagues in JLL Egypt office.
Author: Ayman Sami
As Head of JLL’s Egypt office Ayman oversees the delivery of all services including development consulting, property management, real estate research, retail and office leasing, capital markets and valuation services, to ensure that the highest level of local and international expertise is being used.
Prior to joining JLL, Ayman has worked on projects in Egypt in the areas of real estate development, land and asset valuations, as well as market research and analysis for major establishments. He holds a Bachelor of Science Degree in Marketing Management from The American College of Greece – Athens, Greece.