Businessman Naguib Sawiris, Chairperson of Ora Developers Egypt, recently made headlines by announcing that his company delivered the first phase of the ZED Sheikh Zayed project without making any profits. This bold move was attributed to the challenging economic conditions in Egypt, including rising inflation rates and the depreciation of the local currency.
At a press conference, Sawiris emphasized that the increase in bank interest rates to 30% has posed a major obstacle to achieving profits in the real estate sector. He pointed out that these high rates have led to a surge in property prices, making it difficult for developers to deliver projects on time as promised to customers. The prices of construction materials, particularly steel and cement, have also significantly increased over recent years, further adding pressure on developers who are committed to meeting deadlines despite incurring heavy losses.
Sawiris called on the Central Bank of Egypt to reconsider the interest rate on loans, highlighting that the 30% rate not only affects the real estate sector but also impacts other economic sectors. He expressed optimism about the growth of the real estate sector but stressed the importance of handling it with caution to avoid a potential real estate bubble. Sawiris emphasized the need for both the government and developers to work carefully to prevent any future crisis.
The businessman also praised Egypt’s advanced infrastructure and road networks, which have greatly improved connectivity between East and West Cairo. He noted that Egypt has become a global destination, particularly the Mediterranean region and the North Coast, attracting wealthy Gulf Arabs and providing foreign currency to the country.
Sawiris revealed plans for the Ras El Hekma project, set to commence in collaboration with the Emirati side on 4 October. The project will feature a world-class marina and an international airport, aiming to attract European tourists and benefit all real estate developers in the region. Despite economic challenges and high interest rates in Egypt, developers have been forced to delay project deliveries, causing losses due to the rising prices of construction materials.
In conclusion, Naguib Sawiris’s insights shed light on the complexities of the real estate sector in Egypt and the challenges faced by developers in delivering projects amidst economic uncertainties. His call for caution and strategic planning underscores the importance of sustainable growth in the industry, ensuring long-term success for all stakeholders involved.