Developers look to North Africa

Middle East based developers are increasingly looking to North Africa where demand for real estate is expected to grow both from nationals and foreign investors…

Morocco, Egypt and Tunisia are regarded as some of the best markets for investment.

‘I definitely see expansion continuing in this area.

But it will be rationalised and focused as opposed to let's go out there as fast as we can,' said Jalil Mekouar, head of Middle East and Africa at Jones Lang LaSalle Hotels.

Developers such as Qatar's Barwa Real Estate, which recently announced a $9 billion Cairo project, are targeting the region to help offset troubles closer to home and to tap a region that lacks an appropriate infrastructure to serve a large, rapidly growing population.
 
Whereas the Gulf region, with Dubai in particular, suffering from a property crash with prices down up to 50%, places like Egypt have seen less of a downturn.

Residential property prices in Cairo have fallen 15% in the last year and are expected to stabilise according to analysts at EFG Hermes.

‘North Africa is a great opportunity for investors.

In Egypt you have three of four big developers and a population of 80 million. In the UAE, more than a dozen large companies are addressing a population that is barely five million,' said Saud Masud, UBS real estate head of research.

Egypt has also introduced a raft of economic reforms over the last few years, such as slashing taxes and seeking to streamline its customs to boost investment, while Morocco, another key target for Gulf firms, is also taking steps to help investors.

‘In Morocco, there is still a lack of transparency in many areas such as legal, financing and administrative.

But local authorities are aware of these problems and there are actions being put in place to address them,' said Karim Beqqali, managing director at CB Richard Ellis for Morocco.

RAK Properties, the developer that built Ras Al Khaimah's first man-made islands is looking at potential projects in Algeria, Morocco and Sudan as they are countries where population growth is driving demand.

‘There are countries in the Arab world which desperately need affordable housing and we are now conducting feasibility studies,' said Mohammed Al Qathi.

Source: www.propertywire.com

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