For the last four years, Egypt has made significant and multifaceted efforts to grow its economy by both attracting foreign investments to a wide range of economic activities as well as developing its export capabilities. This has made Egypt a prime emerging market location for regional as well as global investors, especially given recent developments in the Suez Canal that has expanded Egypt's ability to become a transit hub for transportation. An area making significant strides, due to the rush of foreign investments, is real estate and hospitality and this article considers the plans for expansion and legal framework in further detail. In recent years, Egypt has made continuous efforts to expand its economy and population beyond the established cities and hubs. This effort has included trying to dilute the effect of overpopulation by building independent urban centers and establishing industrial and economic zones that spur growth and increase productivity.
Not only is the creation of new cities allowing for more investments, it also creates new destinations for tourists. Given the fact that tourism is a major source of revenue for Egypt and, indeed, a great source of pride for Egyptians, the development of the tourism industry beyond the traditional destinations is an extremely effective way to attract tourists with different preferences. In addition, the creation of new cities including the new administrative capital aims to relieve Cairo's congestion and bureaucracy. In our view, the most important real estate projects currently in construction are the new administrative capital, New Alamein City and El Galala City, both of which we consider below.
The New Administrative Capital
In early 2016, the first phase of construction on the ambitious new capital began on over 700 square kilometers of land. The new capital is located between Cairo and Suez, where it will house parliament, ministries, governmental bodies, the presidential offices and embassies. Moreover, it will enjoy a plethora of facilities including schools, universities, parks, hospitals, clinics, an international airport, a theme park larger than Disneyland, an electric railway that connects to Cairo, solar farms and over 40,000 hotel rooms. Once completed, the new capital is expected to attract over five million residents.
The new capital will also house a 0.5 square kilometer central business district, which will be financed and built by the China State Construction Engineering Corporation (CSCEC) creating investments expected to be valued at over US$ 3 billion. The central business district will include a 345-meter high skyscraper, the would-be highest building in Africa, twelve business complexes, five residential buildings and two hotels.
The CSCEC construction of the new business district is run by a private special purpose vehicle with shareholders including the Egyptian New Urban Communities Authority and the Armed Forces.
New Alamein City
Land for constructing the New Alamein City was allocated earlier this year. This new city is located on the coast of the Mediterranean Sea where many tourist resorts and gated communities already exist. It is a popular destination for local tourism but this new project aims at internationalizing its appeal and making it accessible for all sectors of Egyptian society.
The New Alamein City is not only going to be a tourist hub but a complete urban center that stretches over 200 square kilometers and can house over 400,000 inhabitants. From a tourism perspective, once complete there is expected to be 25,000 hotel rooms which include three new hotels being operated by Marriott International.
El Galala City in El Ain El Sokhna
El Galala City is part of the government's plans to expand its tourist attractions as well as its urban living spaces to presently unpopulated areas. El Galala Mountain is located on the Red Sea between El Ain El Sokhna and El Zaafarana and construction has already begun on the project, which is planned to extend to approximately 70 square kilometers. It is expected to be a prime tourist destination with many resorts and tourist villages and a city, which links the New Administrative Capital to the Red Sea governorates.