Gulf Developers Investing In North Africa
News Posted On: 08 October 2009
A report released yesterday in Dubai shows how Gulf Arab developers are focusing on North Africa instead of depressed home markets.
In Egypt exists the opportunity to tap into an under-developed market and large, rapidly growing population.
To this end Qatar's Barwa Real Estate announced a $9 billion Cairo project in August. Jalil Mekouar of Jones Lang LaSalle Hotels said this week "I definitely see expansion continuing ... but it will be rationalised and focused as opposed to 'let's go out there as fast as we can."
During the credit crunch house prices in Egypt declined only modestly, by up to 15 percent, and are set to stabilise at current levels for the rest of the year, according to EFG-Hermes in Cairo.
"In Egypt you have three or four big developers and a 80-million population. In the UAE, more than a dozen large companies are addressing a population that is barely 5 million," said Saud Masud, UBS real estate head of research.
Egypt has cut taxes and has been seeking to streamline its customs in order to boost investment as part of a package of economic reforms introduced over the last few years.
Meanwhile Morocco is also being proactive in attempting to attract Gulf investors.
Karim Beqqali, managing director at CB Richard Ellis for Morocco said: "..there is still a lack of transparency in many areas such as legal, financing and administrative... Local authorities are aware of these problems ... and there have been concrete actions put in place."
So it seems North Africa is an area of opportunity for Gulf firms. However the crisis at home has resulted in major North African real estate projects being delayed or abandoned. Therefore with resilient demand and the competitive pricing of North African holiday homes on the international market, construction bottlenecks could easily drive prices higher in 2010.
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