INSIGHT: INVESTMENT
LANDSCAPE Ayman Sami, Head of Egypt for Jones Lang LaSalle
Where is FDI interest coming from or is internal investment the main driver? “Towards the end of 2010, the investment landscape was growing at a tremendous rate. Following the January 2011 revolution and, until today, investors are in a wait-and-see mode - apart from a few UAE and Qatari investors who decided to push ahead with their projects. Local developers or investors have put many of their plans on hold, but some did work to complete projects that were planned for prior to the revolution.”
What effect have the elections had on the real estate market? “I believe that the parliamentary elections did not have such a big impact on the real estate sector, however, confidence did return slightly to various areas and this is mainly due to the partial restoration of security.”
Which asset classes and regions are receiving the most interest? “Te main drivers for growth are marriage and population growth driving the demand for housing - especially in the mid to low income segment - and value retail, mainly fast moving consumer goods and petrochemicals which reflected on the continued expansion of hypermarkets, value fashion and food and beverage outlets even during 2011. We have also seen office occupiers especially in the FMCG and petrochemical industries looking to relocate into larger or more modern office spaces.”
How is the country’s hospitality sector looking, post Arab Spring? “Te hospitality sector was hard hit during 2011 with more than a 30 per cent drop in tourist arrivals over the previous year. Te most affected area was Cairo, where we witnessed occupancy rates as low as 15%. Tourism is definitely an opportunistic segment with many areas in Egypt that are untapped. Not too many projects were under development over the past year as there was major concerns over the future of this sector, however, it seems that there is no alternative or substitute for this sector and the new parliament knows that very well as tourism provides jobs to more than 12 per cent of the countries› labour force.”
What kind of legislation is needed to encourage foreign direct investment? “Egypt has come a long way and is becoming a more open market. Te main barrier at the moment is the political situation. I believe that the final steps of electing a new president will help drive further investments.”
How can the development community come together to send out a positive message to potential investors looking at Egypt? “Cityscape is a good example where the development community came together to help promote Egypt. I believe we are moving towards a more favourable environment, and investors are already wandering about waiting to catch the right opportunity. Te local community should also use third party providers like us to communicate the message as we can combine trusted sources whether locally or globally. Packaging and positioning the whole country as an attractive destination with increased transparency will help create a strong impact, avoiding confusion and attracting investments.”
APRIL 2012 I CITYSCAPE I 23
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