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Egypt Report
Marcopolis presents the Egypt Report focused on investments, doing business, economy, stability and security and other topics featuring interviews with key executives and business leaders. The sectors under review are industry, construction, tourism, logistics and others.
InterviewsJanuary 03, 2023
Egypt Real Estate: Tatweer Misr, A Leading Provider of Integrated and Mixed-Use Developments
Dr Ahmed Shalaby, President and CEO of Tatweer Misr
- Written by Sandra Francisco
- Published: January 03, 2023
Interview with Dr Ahmed Shalaby, President and CEO of Tatweer Misr
What is your overview of the real estate sector in Egypt and how does Tatweer Misr function within it?
The local real estate sector is a major contributor to the flourishment of the Egyptian economy, the sector is able to connect and operate around 100 different sectors hence supporting the overall economic growth. Both the real estate and construction sectors together have made up around 20% of Egypt’s GDP in the past 2/3 years.
To cater to the growing population, the Egyptian government has been adopting a major urban development strategy to double urban land area from 7% to 14% by 2052. This strategy has accordingly been translated into the development of new cities across the country. Back in 1978, the government initiated a program to develop new cities and the new strategy is considered an enhancement. Egypt is currently home to over 100 million people and we are expanding by more than 2 million annually, an annual growth ranging between 2.1% and 2.2%.
As we speak, Egypt currently has around 61 new cities under development, 24 of which have already been developed and 37 cities currently being developed; and are what we refer to as 4th generation cities. Some of the major ones include the New Administrative Capital, Galala City, New Mansoura City and New Alamein City, among others. 4th generation cities are mainly known to be equipped with a smart infrastructure that is needed for modern technology and solutions to cater to a modern lifestyle.
By 2052, we are expected to reach around 180 million people in Egypt, and to cater to such a population growth, the real estate sector has been taking steady strides in urban developing to accommodate such growth. This is where Tatweer Misr came to be.
Established in 2014, only eight years ago, Tatweer Misr entered the market at a critical time – when the beginning of the New Republic was announced and the urban development strategy was put in place, making it a perfect timing to initiate our real estate investment. From the very start, we had a vision of providing added value and a unique product in the local real estate sector by developing a series of different products and services.
We have also been aiming for excellence and succeeding one step at a time! We now have a collective land bank of around 6 million square meters across our four different projects which are: IL Monte Galala in Ain El Sokhna, Fouka Bay and D-Bay in the North Coast and Bloomfields in Mostakbal City, New Cairo. Our total contractual sales have surpassed EGP 28 bn (USD 1.5 bn) and host around 10,000 families in our developments.
At Tatweer Misr, we work to deliver iconic structures that set the benchmark in the industry abiding by a set of principles that guide our vision and journey towards success: creating sustainable, smart and happy communities. Accordingly, we focused on establishing mixed-use developments, meaning that our projects contain both residential and non-residential components. For example, in Bloomfields, we are developing Egypt’s first college town through a 90-acres educational zone that will be home to New Jersey Institute of Technology (NJIT), two campuses for King’s College and two campuses for Narmer American College. Also, IL Monte Galala and Fouka Bay will have a series of internationally acclaimed hotels, a total of 9 and 4 respectively. We also have plans to introduce different office buildings and retail options and making sure that we develop integrated mixed-use developments that vary from one destination to the other and cater to its different needs.
Have you seen a difference in strategy or vision from what was happening when you first started Tatweer Misr and what the country is moving towards now? How have you had to adapt? How has the industry and sector changed?
The real estate sector in Egypt is constantly changing, evolving and altering its products depending on clients’ constantly changing demands. Let’s walk through the different trends we have been seeing across the years.
- 15-20 years back:
• The demand of gated communities have been rising, whether for first or second homes. This is the main product that different real estate developers have been working on. Competition between developers has been mainly differentiated depending on the quality of finishing, the facilities available and the lifestyle that comes with being in a gated community.
• Over the past few years, clients have been leaning more towards an integrated mixed-used development and have been focusing on the lifestyle and the facilities that come with different projects. The success of projects are determined based on the type of facility management they provide, the different non-residential components that is nearby (F&B outlets, schools, etc.).
- 10 years back:
• Office building concepts have been seen more often, especially in New Cairo and Sheikh Zayed, and have proven their success. This is a really interesting mixed-use concept where we tend to see F&B outlets in the lower floors and office spaces above.
- 4-5 years back:
• Another new concept that is slowly but steadily adding its footprint to the sector is the concept of serviced apartments. We started witnessing such a concept growing in both first and second homes.
• I believe that we will witness more growth because having fully furnished apartments, whether operated by a hospitality brand or company, is increasing in demand.
In short, the local sector has so much to offer and to fill in the current market gap to meet the fast-paced population growth. Developers are now developing non-residential components such as schools, hospitals, office buildings, hotels and much more. I believe we still have a huge gap in office spaces, retail spaces and serviced apartments per capita, which translates into more opportunities for growth and introducing new products in the market.
What are your competitive advantages? What makes you stand out and makes Tatweer Misr unique?
As I previously mentioned, ever since our establishment we have had a vision to develop sustainable, smart and happy communities through integrated and mixed-use developments. The aim is to ensure that our clients can find whatever services or facilities they might need close to them. To put things in perspective, we have different layers that we base our foundation on to make sure that we provide our customers with added-value and exceed their expectations. The layers are as follows:
1. Non-Residential Components: ensuring that we have a series of different high quality facilities and services such as F&B outlets, retail, administrative areas, etc. As a result, clients would be experiencing a facilitated lifestyle that caters to all their needs
2. Unmatched Quality: To have a competitive edge, we prioritize the quality provided to our clients. By quality, we are talking about the high quality of units provided, the finishing, the services available, the landscape and the ongoing facility management.
3. Smart and Sustainable Operations and Components: To meet our vision, we make sure that a set of smart and sustainable applications and solutions are available across all our projects. The aim is to save as much energy and natural resources as possible and therefore we have installed water treatment plants, smart irrigation systems, smart electricity systems, smart metering, etc. To complete the vision, we also have the concept of happy communities which focus on indulging the five senses, which are taste, sight, touch, smell and sound, in addition to a sense of technology which we see as a key aspect to consider in today’s ever-evolving world.
At Tatweer Misr, we are confident that when clients witness the living experiences our projects have to offer, they will experience first-hand the exceptional quality we have been promising, and that is what will differentiate us amongst our competitors. I am proud to say that two years ago marked our first unit deliveries in Fouka Bay and since then our positioning as a company has positively changed; more people are experiencing living in our communities and the services we provide and hence increasing our credibility in the market.
This year, we are planning to deliver a total of 2000 units across our projects which in return will build in our credibility and solidify our promise of high quality services and products that are sustainable, smart and happy.
Who is your target clientele? What are the projects that you are trying to bring clients to?
Our target clientele differs from one project to the other. Each destination is unique in itself and therefore caters to different individuals with different demands and behavior.
1. IL Monte Galala – Ain Sokhna
- Our flagship project is completely carved in the mountains, built by the concept of topography with its highest point reaching 210 meters above sea level. The project spans over 2.5 million square meters and includes a total of 10,000 units (residential units, hotels rooms and serviced apartments). IL Monte Galala is also home to the world’s first Crystal Lagoon built in the mountains and has a 1,300-meter beachfront and marina for yachts. The project is home to a series of F&B and retail outlets alongside other non-residential components.
- The project’s prime location is the perfect match for people who are interested in having a second home that might also serve as a first home. IL Monte Galala is only one hour away from Cairo, 45 minutes from the New Administrative Capital and just 10 minutes away from Al Galala City developed by the government as one of the main 4th generation cities. The Galala City will be home to a series of schools, universities, hospitals and facilities that will make the surrounding area fit to become a first home destination.
- We also anticipate such a project to be of interest to foreign retirees, especially from European countries, who are looking to retire in a place overlooking crystal blue waters. Therefore, at Tatweer Misr, we aim to position IL Monte Galala as an international destination that caters to all its clients’ needs.
2. Bloomfields – Mostakbal City, New Cairo:
- Bloomfields, in Mostakbal City, is a first home destination in New Cairo adjacent to the New Administrative Capital.
- Launched in 2018, Bloomfields offers easy access to Road 90’s dynamic atmosphere and is only 45 minutes away from Al Ein El Sokhna.
- Designed by acclaimed Italian architects Gianluca Peluffo and partners, this new integrated concept of mixed-use real estate development is being built over an area of 1.7 million sqm (415 acres), combining residential, commercial, retail and entertainment areas over 325 acres, and presenting 10,700 units.
- As part of our mixed-use real estate developments concept, we launched the first phase of Bloomfields educational zone – the first of its kind in the region featuring 90 acres in the center of the project designated for an educational zone.
- Bloomfields College Town features Egypt’s first International Branch Campus (IBC), which will host a number of internationally acclaimed universities including New Jersey Institute of Technology (NJIT), two schools for king’s college as well as two schools for Narmer American College.
- The inspiration that came with developing Bloomfields is to establish an environment for entrepreneurs and young talents to thrive. 70% of Egypt’s population is under 35 years old, and we firmly believe that those young talents who have bright ideas for the future should be supported with a proper entrepreneurial education. Since entrepreneurship and education is embedded in our DNA as Tatweer Misr because we started as a startup 8 years ago, we made it our mission to enhance the local entrepreneurship ecosystem through different contributions and activities including designing Bloomfields as a college town with the educational zone at its heart .
- A college town is defined as a destination that features residential buildings with different unit sizes, office spaces, retail and F&B outlets, high quality educational institutions and different non-residential components.
- In such a youth-driven development, our target clientele are mainly young executives and individuals who are attracted to the entrepreneurial community. We are not only targeting Egyptians here, we are also attracting individuals from the Gulf, Africa and even further, who have an interest to study in New Jersey Institute of Technology and the other prestigious entities in our educational zone.
3. Fouka Bay and D-Bay – North Coast
- North Coast has been known to be a destination for the relaxing summer months and therefore we have solidified our footprint through two major developments namely Fouka Bay and D-Bay.
- Our developments therefore are focused on recreation and relaxation through huge landscape and water spaces, high quality buildings and facilities, and much more.
- Setting a new standard of expectation in architectural design and lifestyle options, Fouka Bay was launched in 2015, located in Ras El Hikma, North Coast.
- Home to an array of non-residential facilities such as restaurants, water activities, and other distinct services and facilities, the project consists of more than 2,500 units with a waterfront view either through its 800m long shoreline or its crystal lagoon.
- Capitalizing on its success in Fouka Bay, Tatweer Misr launched D-Bay in early 2021, in Dabaa in the North Coast, spanning over an area of 200 acres (845,000 sqm).
- The project is to consist of over 1800 units ranging from chalets, villas and serviced apartments all overlooking a waterfront either through its 800m shoreline or its lagoon; and would also feature a wide-array of amenities and facilities such as clubhouses and beach hubs.
What is your medium-term vision for the company, three to five years?
At Tatweer Misr, we have set a vision before our eyes, one that we are working towards achieving by 2025. These are mainly three important milestones as follow:
1. Expanding our land bank:
- We are working hard to acquire new plots in Sheikh Zayed and 6th of October and have a balanced geographical distribution across the country. Egypt currently has four main hotspots namely; North Coast, Ain Sokhna, East Cairo and West Cairo, and by acquiring the new plots we would ensure that we have our footprint in all major areas.
- During the upcoming three years we aim to highly increase our land bank. We are currently developing a total of 6 million square meters across our four projects and we aim to double our land bank by 2025 to reach at least 10 million square meters in land.
2. Operate our non-residential components:
- By 2025, we hope that our educational zone in Bloomfields would be almost fully operational including Egypt’s first American branch campus; New Jersey Institute of Technology as well as the international schools including King’s college of London.
- We also aim to witness the operations of some of the hotels in our projects and a series of the F&B outlets.
3. Expand outside Egypt
- Having Tatweer Misr’s footprint beyond Egyptian lands is a very crucial step in our vision for the company. We believe in the importance of the international exposure and the great added value for our company.
- This will also directly support Egypt’s economic growth by bringing foreign currencies in the Egyptian market.
- Our first targeted destination is Saudi Arabia, we are currently studying the Saudi market and their hotspots. The main four hotspots we identified are Riyadh, Jeddah, Makkah Al-Mukarramah and Dammam.
- Hopefully by 2025, we would be operating in Riyadh.
We also have a medium-term vision for the local real estate sector and the Egyptian economy. During the past six years, the industry has proven its resilience against a series of setbacks and major changes, namely the economic reforms, currency devaluation in 2016, removal of fuel subsidy. Some of the newer challenges also included the outbreak of COVID-19, the global supply chain problems and the Russian-Ukrainian war. Overall, real estate investments have always proven to be a preferred type of investment especially during difficult times and we are positive that the sector will keep on prevailing through any local or global challenges.
To put things into perspective, in 2021 the real estate industry achieved sales in the main hotspots worth EGP 250 Bn (USD 15Bn). This is approximately a 50% increase from the previous year where the industry achieved sales worth EGP 160Bn. By the last quarter in 2021 another major milestone took place, namely real estate exports and attracting foreign direct investments. In the last three months, we saw more Emirati funds and companies acquiring shares in local developments worth USD 500 Mn.
What is your inspiration? What drives you to do what you do?
Real estate development is in itself a source of inspiration! Apart from my love for my family, I am passionate about teaching and developing real estate; in addition to being President and CEO of Tatweer Misr, I am also a Professor of Architecture and Urban Development at Cairo University, and a former visiting professor at Cornell University in USA. One thing that teaching and developing real estate have in common is the positive energy that comes with it! Interacting with the younger generations and future developers opens up a space for great debates and conversations. On the other side of the spectrum, the process of urban development also brings a source of inspiration and positive energy by witnessing a vision becoming a reality and observing the different steps and the processes of an empty land becoming a great multi-purpose and integrated development that caters to clients’ needs. I personally enjoy experiencing the progress every time I go for a site visit, and then when these developments are complete and livable, you get to experience how your clients are enjoying their time and the high quality you offered.
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