Dubai: 94% of wealthy GCC investors with over US$ 1 million in investable assets are keen to purchase property in Egypt, with 56% planning to do so within the year, according to global property consultant, Knight Frank’s inaugural Destination Egypt.
The average budget for GCC nationals purchasing residential property in Egypt is US$ 1.1 million, with variations based on the investor's geographic location and asset level. Specifically, 40% of buyers with investable assets over US$ 1 million plan to spend more than US$ 1 million on their next property in Egypt. This group has the highest average budget of US$ 1.86 million.
In recent years, Egypt has become a key focus for Gulf Cooperation Council (GCC) investments. Between 2021 and 2023, GCC institutions invested more than US$115 billion in Egypt, with UAE (US$ 75 million) leading the charge, followed by Saudi at US$ 30 million.
In 2022, GCC countries made substantial investments, including the United Arab Emirates (UAE) pledging US$10 billion for a port project, Oman and Egypt establishing a US$100 million investment fund, and the Saudi Public Investment Fund (PIF) committing US$15 billion. Saudi Ajlan & Bros Holding also invested US$5.5 billion across various sectors.
Looking ahead to 2023, the UAE outlined plans to invest US$35 billion in Egypt by 2025, emphasizing continued economic development and cross-border collaborations.
In 2022, the UAE led GCC investment into Egypt with a total of US$ 5.7 billion committed, which is approximately 29% of Egypt's total FDI, followed by Saudi Arabia with investments totaling US$ 2.1 billion.
Faisal Durrani, Partner – Head of Research, MENA, explained: “The Egyptian economy appears poised to enter a period of relative stability and the real estate and construction sector is being positioned as a key lynchpin for future growth, particularly with projects such as the US$ 59 billion New Administrative Capital. In fact, at 16%, the sector is already one of the country’s three main economic pillars alongside tourism (12%) and the hydrocarbon sector (24%).
“The UAE’s rising tide of institutional commitments to Egypt is clearly having a positive knock-on impact on individual investor sentiment, with 80% of Emirati’s keen on a real estate acquisition in Egypt, with an average budget of US$ 1.6 million – the highest level in the GCC.”
Knight Frank’s inaugural Destination Egypt report surveyed the attitudes and investment interests in the Egyptian real estate market. Knight Frank partnered with YouGov to survey 258 GCC nationals. These respondents have varying net worth levels ranging from US$ 100,000 to above US$ 1 million, excluding their primary residence.
Egyptian Market Dynamics: Spotlight on Residential Sector
In 2022, the residential sector in Egypt attracted US$ 16 billion out of the total US$ 20 billion real estate investments in Cairo. The market shows a trend of growth, with current market value estimated at US$ 18 billion and projected to reach US$ 30 billion by 2028. Significant residential projects delivered in Q1 2023 alone are worth US$ 1.3 billion.
Knight Frank’s research also reveals that the residential sector is the most preferred asset class, with 68% of GCC investors focussed on the sector. Furthermore, 94% of those with investable wealth of over US$ 1 million are keen on any sector in the real estate market.
Zeinab Adel, Partner – Head of Knight Frank Egypt, added: “Recent legislative changes permitting foreign ownership of property in Egypt have further fueled demand, particularly among international investors and Egyptian expatriates. In fact, Emiratis, alongside Qataris already hold the highest number of homes among GCC investors, with 37% of investors from both countries owning at least two-three homes each. This
demand has contributed to rising home values, but developers are responding, with 300,000 new homes in Greater Cairo expected by 2028.
“In New Cairo, the cost of apartments rose by 24% year-on-year to an average of US$ 450 per square meter (psm), while villa costs climbed 8.5% to US$ 690 psm. In Sheikh Zayed City, apartment costs climbed 27.8% year-on-year to nearly US$ 430 psm, and villa prices nudged up 2.1% to US$ 625 psm”.
Interestingly, when it comes to top locations of choice, most Emirati investors rank New Cairo (37%) and the New Administrative Capital (42%) as their top targets. Saudis on the other hand rank Sharm El Sheikh (42%) and The North Coast (41%) as their most preferred locations, while for Bahrainis and Omanis, New Cairo tops wish lists, at 45% and 37%, respectively.
Allure of Residential Spaces
Knight Frank's survey found that residential real estate was the most popular sector among investors, with 68% of respondents expressing interest. Branded residences and retail spaces followed closely behind, at 30% and 29%, respectively. Notably, 60% of respondents already own at least one property in Egypt, with ownership rates varying based on personal wealth and nationality. Specifically, 36% of those with a personal wealth below US$ 100,000 own just one home, while Emirati (37%) and Saudi (39%) nationals stand out as the largest group of GCC respondents who own 2-3 homes in Egypt.
Top Choice for Property Investment by GCC Investors: Greater Cairo
Greater Cairo stands out as the preferred location for residential property investments among buyers from the Gulf Cooperation Council (GCC). Further underscoring the appeal, our projections indicate that a substantial number of 300,000 homes are actively being developed across more than 40 different projects in Greater Cairo, all set for completion by 2028. This offers a wide array of options for those interested in residential investments.
For those considering other regions, the North Coast also offers attractive options with 8,000 homes currently under construction across 15 projects, due for completion by 2028. Meanwhile, the Red Sea Coast is not far behind, featuring 3,000 homes in development across 10 projects, all slated for completion by 2026.
North Coast and Red Sea – Preferred Destination for Holiday Homes
The North Coast's real estate market is particularly popular among GCC nationals who have between US$500,000 and US$1 million in investable assets. With its stunning white beaches and bustling festivals, it's easy to see why the area has enjoyed a decade-long surge in property demand.
Respondents who already own property on Egypt's North Coast exhibit a high likelihood of reinvesting in the same area, with 43% indicating a preference for a second purchase there. Similarly, 33% of current property owners in Sharm El Sheikh and 27% in El Gouna also express interest in acquiring additional property in those locations.
About Knight Frank:
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, the Knight Frank network has 487 offices across 53 territories and more than 20,000 people The Group advises clients ranging from individual owners and buyers to major developers, investors, and corporate tenants. For further information about the Firm, please visit www.knightfrank.com.
In the MENA region, we have strategically positioned offices in key countries such as the United Arab Emirates, Saudi Arabia, Bahrain, Qatar, and Egypt. For the past 13 years, we have been offering integrated residential and commercial real estate services, including transactional support, consultancy, and management.
Understanding the unique intricacies of local markets is at the core of what we do, we blend this understanding with our global resources to provide you with tailored solutions that meet your specific needs. At Knight Frank, excellence, innovation, and a genuine focus on our clients drive everything we do. We are not just consultants; we are trusted partners in property ready to support you on your real estate journey, no matter the scale of your endeavour.
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Key Highlights from Destination Egypt:
- UAE respondents have the highest average budget (US$ 1.6 million) for a residential purchase in Egypt, followed by Qatar nationals with a US$ 1 million budget.
- The UAE ranked first among GCC countries during FY 2021/22, with total investment of US$ 5.7 billion, an estimated share of 29% of total FDI to Egypt.
- 94% of respondents with over US$ 1 million investable assets are interested in purchasing property in Egypt, with 56% of them keen to purchase within a year.
- 72% of GCC nationals’ main motive behind a purchase in Egypt is to buy a ‘second home / holiday home’.
- Interest in the North Coast is highest among UAE, Saudi, and Qatari nationals with an average 40% interest in the destination.
- 60% of GCC nationals already own at least one property in Egypt.
- Emirati (37%) and Saudi (39%) nationals stand out as the largest group of GCC respondents who own two-three homes in Egypt.
- Qataris are the most eager GCC nationality group, with 64% interested to buy a residential property in Egypt this year.
- For Emirati respondents, the New Administrative Capital (42%) is the ranked as the most appealing residential target location, followed closely by New Cairo (37%).
- 40% of Omanis are interested in making second home purchases, with renting it out (47%) being cited as the second most popular motivator for buying a second home in Egypt.
- 50% of respondents from Bahrain are prepared to spend over US$ 750,000 towards their next property purchase in Egypt.
- Saudi Arabia has ranked first in H1 FY 2022/23 with total invests worth US$ 2.1 bn.
- 44% of Saudi nationals are interested in making their next property purchase in Egypt, a beach house – the highest among all GCC buyer groups.
- 74% of GCC nationals making a second home purchase intend to rent out their property.
- Demand for properties on the North Coast is highest amongst GCC nationals with US$ 500,000 to US$ one million in investible assets.
- At 24%, currency depreciation ranks the highest on the list of perceived risks of the Egyptian residential real estate market.
Egypt, celebrated for its rich history and vibrant culture, stands as a land of immense opportunity and a beacon of promise. Poised for a remarkable transformation in the global investment landscape, a 94% of GCC investors with over US$1 million in investable assets, are keen on purchasing property in Egypt.