Construction & Real Estate

Like many sectors in the country, construction has had more than its fair share of challenges in recent years. Yet in spite of the downside risks, the prospects for the building industry have not been brighter for decades. Continuation of new cities around Cairo, complete with offices and shopping malls, plans for 1m new affordable homes in the social housing segment, the expansion of the Suez Canal, the development of 75,000 sq km of land on either side of the canal for industry and myriad other infrastructure schemes are turning Egypt into a hive of activity. The ambitiousness underpinning the construction plans – as well as the country’s finances – is certainly impressive, but project delivery will be crucial in sustaining the momentum, particularly given the externalities, such as job creation, that the country’s construction sector provides. After a sharp decline in real estate activity in 2011, the market has bounced back and many companies should see full-year figures for 2014 return to pre-revolution levels. The residential market was the strongest-performing sector in Cairo in the third quarter of 2014, with sales recovering ahead of rents in most locations as confidence returns. Going forward, the type and balance of future developments will almost certainly change to better meet the needs of a greater number of Egyptians. The 1m-home housing project could well see its completion date slip in face of the practicalities of producing so many units in an atmosphere where there is huge pressure on resources. Even so, with so many programmes being pushed by the government in all sectors of the economy, in a decade Egypt could look a very different country than that on display today.

This chapter contains interviews with Osama Bishai, CEO, Orascom Construction Industries and Iyad Malas, CEO, Majid Al Futtaim Holding.