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This year’s Cityscape Global in Dubai has made it clear that the real estate market in the Middle East and North Africa (Mena) is in a state of transformation. Several regional projects outside of the core UAE market attracted much interest at the expo. This is particularly true for countries with a more stable environment such as Jordan, Lebanon, Morocco and the other GCC countries, as well as those that have set a strong focus on property and infrastructure development for macroeconomic reasons such as Egypt.
Despite low oil prices affecting the region, the construction industry remains busy with about 960 major real estate projects in the pipeline, according to Ganesh Babu, Middle East Director at IDE Consulting Services, organiser of last month’s Rescom Summit Middle East, a real estate event held in Doha, Qatar.
“Despite low oil prices impacting the region, the construction industry remains optimistic about its prospects,” says Babu. “We see positive market fundamentals in 2017, including infrastructure investment and connectivity, offering potentially good prospects in the real estate market for specialised developments to continue their growth path.”
Notably, these optimistic prospects are increasingly appealing to private investors in the consumer bracket as opposed to high-net-worth individuals or sovereign wealth funds (SWFs) diversifying their regional property portfolio. The former can find a considerable number of upscale residential projects that are still relatively affordable currently under way in the region.
Craig Plumb, Head of Research — Mena at JLL, says there is an ongoing shift as Dubai’s real estate prices have recently decreased by 15 per cent from their 2014 peak, while the volume of residential sales over the first half of the year is down by around 30 per cent compared with the same period last year. “In this shift, private investors are becoming relatively more important compared to the major SWFs,” he says.
Mega project in Egypt
The recent rise in value of the US dollar-pegged UAE dirham is contributing to the trend, as well as a general desire of investors to diversify their portfolios away from their home market.
One of the region’s largest property projects outside the UAE, Egypt’s IL Monte Galala-Sokhna development, considered the second-biggest construction project ever in Egypt after the New Suez Canal, is in the first phase of development with an investment of $250 million (Dh918 million). Located at one of the country’s most important tourist and entertainment destinations in Al Sokhna on the Red Sea, some 120km east of Cairo, the development will deliver more than 1,600 residential and hotel units until 2019.
Within 10 years the development is expected to comprise over 5,000 units and will boast six man-made lagoons constructed by Crystal Lagoons, the company behind the world’s biggest man-made lagoon in Mohammad Bin Rashid Al Mak-toum City in Dubai.
There is also an associated tourism project in Al Sokhna consisting of a seaside hotel, mall, mountain hotel and water park, marina and cable cars. It is expected to be completed in December. The residential part of the project will have a wide variety of units, from 80-sq-m chalets to 400-sq-m villas.
“Il Monte Galala is among the most prestigious projects in Sokhna,” says Ahmed Shalaby, Managing Director of developer TatweerMisr. “For now, the project is a second-home destination, but in the second phase we are targeting to build first homes, as this region is expected to be an urban city only 30 minutes from the new administrative capital.”
Ayman Sami, JLL’s country head for Egypt, points out that the devaluation of the Egyptian pound in March versus the US dollar has raised local demand for property, mainly in Cairo and New Cairo, driven by the perception that residential real estate is a safe haven.
New projects delivered in Cairo’s satellite town, 6th of October City, include Ashgar City and Palm Parks, as well as Village Gardens Katameya, Mivida and Ma-dinaty in the Palm Hills development in New Cairo, Egypt’s new purpose-built capital southeast of Cairo.
Jordan’s golf homes
The mixed-use Golf Residences in Jordan’s southern resort town of Aqaba is also attracting premium property investors. Slated for completion by the end of 2018, the project will comprise modern residential buildings featuring one-, two- and three-bedroom apartments at prices starting from Dh430,000. The project is built around a golf course and will have access to premium facilities at Aqaba’s waterfront, including parks, playgrounds and swimming pools.
“Golf Residences offers a wide range of beautifully designed residential apartments,” says Sahl Dudin, Managing Director of Ayla Oasis Development Company, the project’s developer.
Jordan’s real estate market surged by 6 per cent in terms of sales value in the first half of the year, according to Jordan’s Department of Land and Survey, with foreign buyers, mainly from Iraq, Saudi Arabia, Kuwait and partly from Qatar and UAE, accounting for some 5 per cent, a share that has been increasing recently.
Another overlooked but amazingly vibrant regional property market is Morocco. While 10 years ago not many people would have thought of investing in real estate in Morocco, things have changed as a property boom emerged after Spanish and, later on, Mena developers, including Emaar, tapped into Morocco’s real estate potential and took advantage of the government’s investment spree in infrastructure, energy and construction projects in the past decade.
Morocco has been ranked eighth in the list of top-emerging markets with the lowest risk to invest in real estate, according to the annual report of US-based global real estate firm Cushman & Wakefield. The firm lists Casablanca, the city’s economic capital, as the urban area with the highest potential being “reasonably well developed,” with the city centre and the business and expat district of Sidi Maarouf “the principal sub-markets, with a number of locations throughout the city also emerging”.
In the capital Rabat, the consulting firm notes that supply and demand is currently more balanced as a number of vacant real estate projects have been recently completed. Among the latest developments is a new hotel and residences project called Fairmont Residences La Marina Rabat-Salé, developed jointly by Abu Dhabi-based Eagle Hills and Fairmont Hotels & Resorts. Scheduled to open in 2019, the marina-fronting residences have a choice of one-, two- and three-bedroom units ranging in size from 70-210 sq m.
“It’s a luxury lifestyle opportunity within one of Morocco’s most prestigious developments,” says Mohammed El Merini, General Manager of Eagle Hills Morocco. “This will become a new flagship destination.”
Another regional hotspot in terms of vibrancy, good food and relative stability is Lebanon. In the capital Beirut, the mixed-use, 40-storey T3 Tower is attracting international buyers. Located in the Beirut Digital District, also called Lebanon’s Silicon Valley being the city’s growing hub for technology and creative industries, the project offers amenities that are usually reserved to penthouses such as gardens and pools, with views of downtown Beirut, the Mediterranean Sea and the mountains. The tower, which has won international design awards, is targeting younger entrepreneurs and will be the centre part of a district that comprises piazzas and landscaped areas, offices, apartments, hotels, shopping and entertainment facilities. Construction is scheduled to begin next year.
For those looking for projects closer to home, there is Bahrain’s Diyar Al Muharraq Islands, a master-planned city comprising seven islands, a $2.5-billion waterfront development called Bahrain Bay and Marassi Al Bahrain, which is a luxurious beachfront residential, hospitality, retail and entertainment destination.
“Marassi Al Bahrain will be home to 22,000 residents,” says Maher Al Shaer, CEO of Diyar Al Muharraq. “The islands are among Bah-rain’s largest, most visionary and progressive urban developments, making it a safe investment option, especially in this region.”
With a large number of residential projects, Jeddah in Saudi Arabia is also enticing property buyers from the Middle East. Jeddah has been ranked high in terms of architectural quality and interior design in a recent study by Dubai-based Ellington Properties. The latest luxury property developments include Eden Residence, a prime residential and retail development in the Al An-dalus district. Described as a “luxury vertical residential compound” with just 58 exclusive residential units, the project is slated for completion in mid-2018.
Another interesting project in Jeddah is Jeddah Gate, developed by the Saudi Arabian development arm of Emaar Properties. The 413,000-sq-m master-planned community contains retail and leisure amenities around a central development known as Emaar Square. The development also includes Emaar Residences. While some parts of Jeddah Gate are already completed, Emaar Residences is currently in the initial stages, with handover expected in 2018.
Source: Arno Maierbrugger, Special to Property Weekly