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In recent times, Egypt has emerged as a significant focus for investments from the Gulf Cooperation Council (GCC). According to Knight Frank's first Destination Egypt report, 94% of affluent GCC investors, holding over US$ 1 million in investable assets, express a strong interest in acquiring property in Egypt. Among them, 56% intend to make a purchase within the coming year.
The average budget for GCC nationals buying residential property in Egypt stands at US$ 1.1 million, varying depending on the investor's location and asset level. Notably, 40% of buyers with investable assets exceeding US$ 1 million plan to allocate more than US$ 1 million for their next property in Egypt, constituting the highest average budget of US$ 1.86 million within this group.
In 2022, significant financial commitments were made by GCC countries, such as the United Arab Emirates (UAE) allocating US$10 billion for a port project, Oman and Egypt establishing a US$100 million investment fund, and the Saudi Public Investment Fund (PIF) pledging US$15 billion. Additionally, Saudi Ajlan & Bros Holding invested US$5.5 billion across various sectors.
Looking forward to 2023, the UAE has laid out plans to invest US$35 billion in Egypt by 2025, emphasizing sustained economic development and cross-border collaborations. In the previous year, the UAE took the lead in GCC investments in Egypt, contributing a total of US$5.7 billion, accounting for roughly 29% of Egypt's overall Foreign Direct Investment (FDI). Saudi Arabia followed with investments totalling US$2.1 billion.
The increasing institutional commitments from the UAE to Egypt are positively influencing individual investor sentiment. Notably, 80% of Emiratis express interest in acquiring real estate in Egypt, with an average budget of US$1.6 million—the highest in the GCC.
Knight Frank's research highlights the residential sector as the most preferred asset class, capturing the attention of 68% of GCC investors. Furthermore, a noteworthy 94% of those with investable wealth exceeding US$1 million express interest in various sectors within the real estate market.
In 2022, the residential sector in Cairo attracted a substantial portion of the total real estate investments, amounting to US$16 billion out of the US$20 billion invested. The market exhibits a growth trend, presently valued at US$18 billion and anticipated to reach US$30 billion by 2028. Notably, Q1 2023 alone saw the delivery of significant residential projects totalling US$1.3 billion.
In New Cairo, apartment prices experienced a 24% year-on-year increase, reaching an average of US$450 per square meter (psm), while villa costs rose by 8.5% to US$690 psm. In Sheikh Zayed City, apartment prices surged by 27.8% year-on-year to nearly US$430 psm, and villa prices edged up by 2.1% to US$625 psm.
Surprisingly, in terms of preferred locations, the majority of Emirati investors prioritize New Cairo (37%) and the New Administrative Capital (42%) as their top choices. Conversely, Saudis favor Sharm El Sheikh (42%) and The North Coast (41%) as their most preferred locations. Meanwhile, for Bahrainis and Omanis, New Cairo takes the lead in their wish lists, with percentages of 45% and 37%, respectively.
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