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November 21, 2008


Real estate sector still going strong in Egypt

Daily News Egypt reported that despite soaring steel, cement and land prices, Egypt’s real estate market is still attracting developers and investors looking for safer havens in the shadow of a global slump.

According to HC Securities, construction costs in Egypt have surged by 27% since January 2008 pressured by continued hikes in raw material prices, namely steel rebar and cement. Steel currently sells at record highs of more than EGP 5,300 per tonne up from EGP 3,900 in December 2007. Cement sells at around EGP 500 per tonne up from EGP 380 per tonne in December 2007.

Ongoing upsurges in steel and cement prompted Egyptian property developer Mr Hisham Talaat Moustafa to ring the alarm. Mr Moustafa, who is also chairman of the General Section of Real Estate Investment, said that "GSREI would not overlook escalating prices in steel and cement that will eventually affect not only the building and construction industries, but also domestic economy and society in general."

HC Securities statement said that “Nevertheless, construction sector in Egypt is growing remarkably, fueled with heavy Gulf investments. Dwellings average price per square meter reach levels as high as EGP 8,000. Investments will continue to pour into the economy, fueling growth across the board. Egypt has been attracting investments and with a US slowdown and a possible similar scenario taking place in Europe, Gulf and foreign investors will be more interested in investing in Egypt, especially since growth rates are expected to remain strong in fiscal year 2007-08.”

Several Gulf investors have recently eyed Egypt’s promising real estate market, developing several mega projects in parallel. Dubai’s heavyweight Emaar Properties revealed investments of around USD 5.8 billion in four projects nationwide. Market rival Damac is pouring in USD 22.9 billion in four luxury residential projects in Egypt. Similarly, Dubai Holding Company revealed intentions to invest some USD 4 billion in real estate projects in Egypt. Al Futtaim Group also plans to bring Dubai Festival City to Cairo with investments totaling USD 3.4 billion.

(Sourced from Daily News Egypt)