Liverpool, Merseyside United Kingdom (PressExposure) June 07, 2011 -- Egyptian property developer Nasr City Housing (MNHD.CA) has announced that it will be restarting construction on its mega-project, the 3.5 million square meter, $3.4 billion-plus mixed use Tigan development in Cairo. It is expected to be finished in seven years.
Formerly a state run company, investment bank Beltone Financial's private equity arm bought now owns 30%. The firm delayed finalising the detailed planning of the project because of the political uprising.
"The firm is getting ready to certify a detailed plan for the project from the governorate of Cairo and then will start executing it," the paper quoted Ibrahim el-Sheeneky, a company executive, as saying.
The project is expected to cost over 20 billion Egyptian pounds ($3.4 billion), he added.
This is a massive testament to renewed faith in the new Egyptian political system and property market.
Obviously the Egypt property market took a bit of a battering at the hands of the political uprising, and adding insult to injury, Mubarrak's removal from power has been followed by a string of legal challenges over the ownership of property firms' land holdings. But companies like Nasr City Housing are thought to be in a strong position to ride out the crisis, because they have stronger balance sheets and because their older land banks are thought to be safe(r) from legal disputes.
"We like the company's limited exposure to current political risks, readiness for retail land sales, diversified management team, connection to the current government, and unleveraged balance sheet," EFG-Hermes wrote in a note on May 25.
Nasr City Housing acquired most of its land bank through presidential decrees, mostly before the 1980s, and analysts say it is also positioned to benefit from pent-up demand for middle income and low-income housing.
With the revolution now behind it Egypt is arguably ready to move forward as a credible investment choice for investors and holiday makers alike.
Resorts such as Sharm-el-Sheikh offer excellent potiential given it is the most established tourist spot on the Red Sea Riviera. Surrounded by two national parks at either side and the sea in front and of course not forgetting the backdrop of the desert Sharm-el-Sheikh property is an excellent investment choice. Strict building regulations mean no ugly high rise buildings are seen in this resort.
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