Knight Frank: 94% of wealthy GCC investors targeting Egypt for real estate investments

Exclusive Findings from Knight Frank’s 2023 Destination Egypt report.

Dubai, 27th September 2023 l 94% of wealthy GCC investors with over US$ 1 million in investable assets are keen to purchase property in Egypt, with 56% planning to do so within the year, according to global property consultant, Knight Frank’s inaugural Destination Egypt.

The average budget for GCC nationals purchasing residential property in Egypt is US$ 1.1 million, with variations based on the investor’s geographic location and asset level.

Specifically, 40% of buyers with investable assets over US$ 1 million plan to spend more than US$ 1 million on their next property in Egypt. This group has the highest average budget of US$ 1.86 million.

In recent years, Egypt has become a key focus for Gulf Cooperation Council (GCC) investments. Between 2021 and 2023, GCC institutions invested more than US$115 billion in Egypt, with UAE (US$ 75 million) leading the charge, followed by Saudi at US$ 30 million.

In 2022, GCC countries made substantial investments, including the United Arab Emirates (UAE) pledging US$10 billion for a port project, Oman and Egypt establishing a US$100 million investment fund, and the Saudi Public Investment Fund (PIF) committing US$15 billion. Saudi Ajlan & Bros Holding also invested US$5.5 billion across various sectors.

Looking ahead to 2023, the UAE outlined plans to invest US$35 billion in Egypt by 2025, emphasizing continued economic development and cross-border collaborations.

In 2022, the UAE led GCC investment into Egypt with a total of US$ 5.7 billion committed, which is approximately 29% of Egypt’s total FDI, followed by Saudi Arabia with investments totaling US$ 2.1 billion.

Faisal Durrani, Partner – Head of Research, MENA, explained: “The Egyptian economy appears poised to enter a period of relative stability and the real estate and construction sector is being positioned as a key lynchpin for future growth, particularly with projects such as the US$ 59 billion New Administrative Capital. In fact, at 16%, the sector is already one of the country’s three main economic pillars alongside tourism (12%) and the hydrocarbon sector (24%).

“The UAE’s rising tide of institutional commitments to Egypt is clearly having a positive knock-on impact on individual investor sentiment, with 80% of Emirati’s keen on a real estate acquisition in Egypt, with an average budget of US$ 1.6 million – the highest level in the GCC.”

Knight Frank’s inaugural Destination Egypt report surveyed the attitudes and investment interests in the Egyptian real estate market. Knight Frank partnered with YouGov to survey 258 GCC nationals. These respondents have varying net worth levels ranging from US$ 100,000 to above US$ 1 million, excluding their primary residence.

Egyptian Market Dynamics: Spotlight on Residential Sector

In 2022, the residential sector in Egypt attracted US$ 16 billion out of the total US$ 20 billion real estate investments in Cairo. The market shows a trend of growth, with current market value estimated at US$ 18 billion and projected to reach US$ 30 billion by 2028. Significant residential projects delivered in Q1 2023 alone are worth US$ 1.3 billion.

Knight Frank’s research also reveals that the residential sector is the most preferred asset class, with 68% of GCC investors focussed on the sector. Furthermore, 94% of those with investable wealth of over US$ 1 million are keen on any sector in the real estate market.

Zeinab Adel, Partner – Head of Knight Frank Egypt, added: “Recent legislative changes permitting foreign ownership of property in Egypt have further fueled demand, particularly among international investors and Egyptian expatriates. In fact, Emiratis, alongside Qataris already hold the highest number of homes among GCC investors, with 37% of investors from both countries owning at least two-three homes each. This demand has contributed to rising home values, but developers are responding, with 300,000 new homes in Greater Cairo expected by 2028.

“In New Cairo, the cost of apartments rose by 24% year-on-year to an average of US$ 450 per square meter (psm), while villa costs climbed 8.5% to US$ 690 psm. In Sheikh Zayed City, apartment costs climbed 27.8% year-on-year to nearly US$ 430 psm, and villa prices nudged up 2.1% to US$ 625 psm”.

Interestingly, when it comes to top locations of choice, most Emirati investors rank New Cairo (37%) and the New Administrative Capital (42%) as their top targets. Saudis on the other hand rank Sharm El Sheikh (42%) and The North Coast (41%) as their most preferred locations, while for Bahrainis and Omanis, New Cairo tops wish lists, at 45% and 37%, respectively.

Check Also

JICA extends ODA loan of INR 1,336 crores for promoting start-up ecosystem and innovation in Telangana

~ Ushering in socio-economic development by innovation of women and rural entrepreneurs ~ Hyderabad, February …