Out-Law News | 13 Mar 2014 | 2:24 pm | 2 min. read
The project, which Arabtec says will create more than one million jobs for people in Egypt, will cover 160 million square metres across 13 sites in Egypt, said Reuters news agency. Construction is expected to begin in the third quarter of this year with the first units due to be completed in 2017 and completion of the project expected by 2020.
The project will be funded mostly by Egyptian and foreign banks, creating homes targeted at lower income individuals. These banks have already expressed interest in providing "a range of affordable financing solutions that will appeal to a broad cross-section of the Egyptian population and includes long-term repayment of up to 20 years," Arabtec said.
Arabtec has signed a memorandum of understanding with Egypt's defence ministry, stating that the UAE is "very keen to mobilise all efforts to boost support for our brothers in Egypt," according to the Financial Times. The agreement underlines the United Arab Emirates's support of the government of Egypt, which is led by Field Marshal Abdel Fattah al Sisi following the ousting of Egypt's previous president Mohamed Morsi last year. The UAE has underwritten $7 billion of aid to Egypt, and is working closely with Cairo's interim government to assist with development efforts and make the country's struggling economy more attractive to investors.
In a statement issued by Arabtec, Hasan Abdullah Ismaik, chief executive of Arabtec Holding, said: "We believe the Egyptian economy is poised for a significant rebound, particularly with the current governmental policies geared towards encouraging investment in the property development sector. The Egyptian market holds high potential, particularly in the affordable housing sector, and we are determined to take advantage of these opportunities by launching a number of projects that will help meet the ever-mounting demand for housing units in Egypt."
“This huge project is the maiden major undertaking of Arabtec Real Estate in Egypt and the region," he said. "It represents a historic turning point in our pursuit of growing the company into one of the leading holding groups in the region, which will certainly bring sustainable rewards for our shareholders."
The Financial Times said that UAE aid would not be used to finance the deal. It is understood that the 160,000 square metres of land for the project has been donated for free by Egypt's defence ministry. The 13 locations for housing development are believed to cover Cairo, Alexandria and Luxor.
Dubai-based projects expert Sachin Kerur of Pinsent Masons, the law firm behind Out-Law.com, said: "It is both a signal of intent by Arabtec to take on a more challenging international portfolio and also that Abu Dhabi Inc. is serious in providing economic sustenance for Egypt."
Arabtec went public in 2005 and is listed on the Dubai stock exchange. It currently has operations in Abu Dhabi, Dubai, Jordan, Qatar, Syria, Saudi Arabia, Palestine and Russia. The company says it is developing markets in Libya, Algeria and other countries, as well as Egypt.