Egypt’s real estate developers consider expansion in foreign markets, especially Saudi Arabia, in search of investment and profit opportunities in light of unstable economic conditions that the Egyptian economy suffers from.
Some major real estate companies expressed their interest in investing in the Saudi real estate market, in conjunction with the investment boom taking place in Saudi Arabia and the package of development and construction projects that are being developed in the country, to achieve the Kingdom’s Vision 2030.
Investment opportunities are available in the Saudi real estate sector through a housing programme within the vision of Saudi Arabia, which aims to provide housing solutions and financing options to enable Saudi families to own suitable housing, either through ownership system or through usufruct system.
Tatweer Misr, Mountain View, and Paragon Developments companies took actual steps to invest in the Kingdom of Saudi Arabia, while other companies, headed by Orascom Development Egypt, showed interest in the Saudi market. CEO of Orascom Development Egypt Omar Al-Hamamsy, announced in April 2022 the company’s interest in participating in the current development process and new projects and incentives offered for foreign investment.
Tatweer Misr signed a strategic partnership contract with Naif Alrajhi Investment to establish a joint venture company in the field of construction and real estate investment. The joint venture aims to develop integrated urban projects and tourist resorts with international standards in the Kingdom to achieve added value to the Saudi real estate market through the expertise of both entities to achieve the Kingdom’s Vision 2030.
Co-founder, President and CEO of Tatweer Misr, Ahmed Shalaby, commented on the partnership, saying, “The strategic partnership with Naif Alrajhi Investment is a first step in the company’s march towards expansion in regional markets to replicate its distinguished experience in urban development in Egypt. Tatweer Misr chose to start in Saudi Arabia, in light of the economic and urban boom that the Kingdom is currently witnessing, in addition to the incentives it offers to encourage investment.
Shalaby said in previous statements that the Saudi market ranks second in the region after Egypt in terms of population. In addition, it enjoys great purchasing power and an integrated real estate system, which includes mortgage and banking financing system, procedures and laws that are in line with the Kingdom’s Vision 2030, which aims to increase the percentage of residential ownership for Saudis to 70%, compared to 45% at the present time. Accordingly, the Saudi real estate market encourages investment, especially since 5 million Saudis have approvals to obtain mortgage financing, in addition to the availability of land and facilities for investors.
Previously, Tatweer Misr participated in MIPIM exhibition in France and signed a memorandum of understanding to facilitate its entry into the Saudi market, based on an initiative by the Saudi Ministers of Housing and Investment to provide a real estate product that represents added value and addresses the quality of life in Saudi Arabia.
Moreover, Mountain View Egypt signed a cooperation agreement with Omar Kassem Alesayi Group to establish a joint venture company in the field of construction and real estate development with international standards to develop integrated urban projects and tourist resorts in Saudi Arabia.
Founder and Chairperson of Mountain View Amr Soliman stated that Mountain View’s strategy includes expansion in neighboring markets to transfer its experience in establishing integrated urban projects based on the application of the “science of happiness” for the first time in the Middle East to achieve leadership in the Egyptian real estate development sector.
Soliman said: “Within its quest to achieve this, Mountain View has inked this agreement with Alesayi Group, a leader in the real estate sector in Saudi Arabia and Gulf countries, to study the development of new projects, which is one of the promising markets in the region.”
Paragon Developments has come into a collaboration agreement with Adeer Holding, a subsidiary of Sumou Holding, to establish a new company for the management and development of administrative projects in Saudi Arabia, under the name Paragon Saudi Arabia. This agreement was signed during a meeting between Paragon Developments and Adeer Holding on the sidelines of a seminar in Riyadh, Saudi Arabia, under the theme “Strategies for successful investment in Saudi Arabia, Egypt, and the UK.”
The agreement aims to establish a framework for a collaborative partnership between Paragon Developments and Adeer Holding to produce Paragon Saudi Arabia, a real estate management and development company in the Kingdom. The agreement involves outlining a roadmap for the formation and operation of the new company, which will generate excellent opportunities for developing administrative projects within the Kingdom, starting with the super cities of Riyadh and Jeddah.
The focus will be on establishing sustainable administrative entities that prioritize comfort, well-being, modern technology, and Paragon’s philosophy, which emphasizes the importance of the human element as a fundamental pillar, prior to commencing any project, the human element will be the primary foundation, ensuring sustainability and providing a vibrant and suitable work environment that guarantees the highest levels of comfort and productivity.
“The collaboration with Adeer is the optimal choice due to their market leadership in the real estate sector and their extensive land portfolio. This partnership will enable us at Paragon to explore new horizons in Saudi Arabia, forming a comprehensive understanding of the real estate market in the Kingdom,” said Bedeir Rizk, CEO of Paragon Developments. “We aim to lead the office and administrative building market with total investments reaching SR10bn, equivalent to $2.7bn, by 2025. It has been agreed upon to initiate projects in Riyadh and Jeddah, with the first project set to launch in the last quarter of the current year.”
The trend to the Saudi market was not limited to real estate development companies, but rather the matter extends to contracting, construction and engineering consulting companies. Actually, more than five Egyptian contracting companies have established subsidiaries in the Saudi market namely SIAC Construction, Rowad Modern Engineering and Concrete Plus, along with Qontrac Developments and Redcon Construction.
Chairperson of the Construction Committee of the Egyptian Businessmen Association, Fathallah Fawzy, said that the Saudi market has become enjoying attractive investment opportunities in the field of housing, especially in Riyadh city, which is witnessing reconstruction projects and an unprecedented urban boom.
He elaborated that the urban projects are currently being developed by the Kingdom of Saudi Arabia open the door for real estate investment in all fields of engineering consultancy, contracting and real estate development, with Egypt’s great experience in these fields which in turn increase the ability to bring foreign currency to Egypt through the presence of these companies in the Saudi market. In addition, increasing Egypt property exports to such markets.
It is likely that Saudi Arabia will spend about $1.1trn in infrastructure in the period from 2019 to 2038. The infrastructure in Saudi Arabia is witnessing rapid development through extensive government spending and the participation of the private sector, in addition to opening the way for foreign investment in transport, energy, electricity, water, communications and other sectors.
The housing programme works to raise the percentage of Saudi family ownership to reach 70% ownership by 2030, by serving larger segments of society, and increasing the attractiveness of the sector for investment by the private sector.
This comes in parallel with the increase in supply of housing options that are implemented at affordable prices, less time and with high quality, the provision of specialized housing programmes. Besides, developing a legislative and regulatory environment for the housing sector to increase its economic impact and enhance its attractiveness to the private sector and the development of local content, which contributes to creating job opportunities in the sector and enhancing its participation in the GDP.
The Saudi programme “Sakani” succeeded in serving more than 1.4 million families in 2022, and reaching the goal of housing ownership to more than 60% in 2020 in partnership with the housing system and financing agencies from banks, financing institutions and real estate developers.
Source: Daily News Egypt