ANALYSIS OF EGYPT'S CONSTRUCTION PROJECTS MARKET Organized by - - PowerPoint PPT Presentation

ANALYSIS OF EGYPT'S CONSTRUCTION PROJECTS MARKET

2 - 4 SEPTEMBER 2019 EGYPT INTERNATIONAL EXHIBITION CENTER www.thebig5constructegypt.com

Organized by

2015 2016 2017 2018 10,000 20,000 30,000

Value of contracts awarded in Egypt all sectors, 2015-18 ($m)

Egypt is in the midst of a construction

• boom. In total, more than $20bn worth
• f real estate and civil infrastructure

projects valued $50m or above have been awarded over the past two years alone. Everywhere across Cairo, huge billboards advertise dozens of new real estate developments demonstrating vividly the scale of opportunity. The Egyptian real estate market benefjts from an improved economy, high demand for new housing to back substantial population growth, and government incentives to stimulate the market. Egypt is in fact the only country in the Middle East & North Africa (MENA) where overall spending on projects has grown in the past two years, and it has

• vertaken Saudi Arabia as the second

largest single projects market in the region as a whole, recording in 2018 more than $33bn of contract awards.

MARKET SIZE

EGYPT ECONOMIC INDICATORS, 2018

Nominal GDP ($bn), 2017 299 Real GDP growth, 2017e (%) 4.2 Real GDP growth, 2018f (%) 5.2 Non-oil real GDP growth, 2018f (%) 4.2 Oil real GDP growth, 2018f (%) 22.8 Crude oil production (million b/d) 0.6 Natural gas production (billion cf/d) 5.1 Fiscal breakeven oil price ($/barrel) 55.0 Fiscal balance (% of GDP)

• 10.0

Government debt (% of GDP) 91.2 Current account balance (% of GDP)

• 4.4

Offjcial reserves ($bn) 35.5 CPI infmation (%) 10.4 Unemployment rate (% of labour force) 11.1

The drivers for this construction renaissance are clear. With the Arab world’s largest population of around 100 million people, Egypt already has a considerable latent demand for housing and social infrastructure. But population growth of more than 1 million each year, a population density rate of 46,000 per square kilometre in Cairo, and the fact that more than 50% of the population is below the age of 25, are the perfect ingredients for a sustainable construction boom for years, if not decades, to come. The market has benefjted from strong economic growth

• f more than 5% in 2018, and a construction-focused

government which is prioritising the delivery of projects. Egypt’s rapid repositioning from a net gas importer four years ago to net exporter today, thanks to the fast- tracked development of the offshore Zohr gas fjeld, has helped underpin this economic recovery and support the state’s projects drive.

KEY DRIVERS

The key and perhaps best-known active construction project in Egypt is the new Administrative Capital to the east of Cairo. Involving the creation of a totally new from the ground-up city, the multi-billion- dollar project will host the government when it is complete as well as tens of thousands of new residents. Work on the massive project is well under way, with hundreds of individual contracts already awarded. Other signifjcant active real estate and civil infrastructure contracts include the huge new New Alamein City on the North Coast, the new Egyptian Grand Museum, a host of new hotel and tourism developments, and the expansion of the existing Cairo metro network.

PROJECT VALUE ($M)

ACCUD - The Capital Cairo: Central Business District 3,000 ACCUD - The Capital Cairo: Central Business District Phase 2 2,800 NUCA - The New Mansoura City 1,350 NAT - Cairo Metro Network: Line 3 - Phase 3: 1,244 El-Thawra Line Civil Work NAT - Light Rail Transit : LRT Line (66 kms) 1,240 NAT - Cairo Metro Network: Line 4: Phase 1: 950 Civil Package 1 (CP 401) Hassan Allam Properties - 800 El Mostakbal City HAPTown Residential Complex MHUUD - Rod El Farag Highway 790 Madaar Development - Azha Ain El-Sokhna (Phase I) 750 Almarasem Development - Fifth Square 745 SCZONE - Al Sokhna Port Second Basin Development 600 NAT - Cairo Metro Network : Line 3 - Phase 4: Package 4B 535 NAT - Cairo Metro Network: Line 3 - Phase 3: 530 Electromechanical Works Palm Hills / Madinet Nasr : Capital Garden 500 MAF - Almaza City Centre 450 Egypt National Cancer Institute - National Cancer Institute 400

2018 SELECTED EGYPT CONTRACT AWARDS

In terms of the leading clients, the rankings highlight that the market is comprised of both government and private sector developers, unlike other markets where state bodies dominate. The local projects market has become increasingly attractive to Gulf real estate developers, like Emaar and Al-Futtaim, as the GCC market slows and because Egypt has considerable long-term potential.

TOP CLIENTS

Egypt selected top construction and infrastructure clients by value of work under execution ($m)

SUEZ CANAL AUTHORITY EGYPT MINISTRY OF HOUSING UTILITIES & URBAN COMMUNITIES EL MOSTAKBAL URBAN DEVELOPMENT EMAAR MISR EGYPT MINISTRY OF TRANSPORT CITYSTARS AL FUTTAIM GROUP CAPITAL GROUP PROPERTIES 2,000 4,000 6,000 8,000 10,000

It is a similar story among the leading

• contractors. Both local and international

fjrms have been able to take advantage of the opportunity which again demonstrates the openness of the local market. Chinese contractors which have been able to bring fjnancing have in particular been successful in the market.

TOP CONTRACTORS

1,000 2,000 3,000 4,000 5,000 6,000 CHINA STATE CONSTRUCTION & ENGINEERING CORPORATION ORASCOM CONSTRUCTION HASSAN ALLAM CONSTRUCTION THE ARAB CONTRACTORS PETROJET CONCORD FOR ENGINEERING & CONTRACTING SIAC CONSTRUCTION UI NASR HOUSING & DEVELOPMENT

Egypt selected top construction and infrastructure contractors by value of work under execution ($m)

With a pipeline of known and un- awarded projects worth more than $300bn, Egypt is larger than any other regional market after Saudi Arabia and the UAE. Construction is by far the largest future market in the country with more than $120bn worth of planned projects and growing.

FUTURE PIPELINE

Value of Egypt planned and un-awarded contracts by sector ($m)

Construction Chemical Gas Oil Transport 20,000 40,000 60,000 80,000 100,000 120,000

There are hundreds of future construction and civil infrastructure contracts across Egypt ranging from large-scale real estate and tourism projects to high speed railway and metro schemes. In all, there has never been a better time to invest in the Egyptian market.

FUTURE SELECTED EGYPT PROJECTS

PROJECT VALUE ($M)

MFTI - Golden Triangle Mining and Urban Development 29,000 MoHUUD – Egypt’s Social Housing Program 16,600 Al Habtoor Group - Al Habtoor City in Cairo 8,500 Palm Hills Developments - 6 October City: Badya 8,494 MOT - Alexandria-Aswan High Speed Railway Line: 6,335 Cairo to Luxor MOT - Luxor-Hurghada Railway Line 4,730 Saudi MOT / Egypt MOT JV - 4,000 King Salman Causeway (Tiran Causeway) NAT - Cairo Metro Network: Line 6 4,000 Heliopolis For Housing & Development / SODIC - 3,800 Mixed Use Project in Cairo NAT - Cairo Metro Network: Line 5 3,500 Egypt MOT - Alexandria: Max New Port 3,378 NUCA - 6th October City Residential Community 3,000

FUTURE SELECTED EGYPT PROJECTS

(CONTINUED)

PROJECT VALUE ($M)

NUCA / Mountain View / Sisban Holding JV - 2,000 Mountain View I-City 6th October Jumeirah Real Estate / Sakan Developments JV - 1,680 Jumeirah Bay Ras El Hekma MoH - JANNA Housing Project Egypt 1,500 Atraba Integrated Holding – 1,000 Integrated Medical City Project in Cairo MoHUD – Alamein City Hotels Development 1,000 Program at Matrouh DPA - Second Container Terminal (DEPCO) 1,000

SOME ACTIVE PROJECTS

New Grand Egyptian Museum

Scope: One of the largest museum development projects in the world. Land area is 470,974 square meters divided into main museum and conference center building with area of 133,282 square meters. Developer: Ministry of Culture Stage: Nearing completion Estimated value: $810 million

New El-Alamein city

Scope: A new mixed-use integrated city to accommodate more than 3 million people in phase 1. The development calls for construction of 20,000 residential units and 25,000 hotel rooms in the first phase alone. Developer: Ministry of Housing Stage: Construction Estimated value: $5 billion

New administrative capital

Scope: New administrative capital of Egypt. 725 square km of land 21 residential areas 650 km of roads Capacity for 6.5 million people Developer: Administrative Capital for Urban Development Stage: Construction Estimated value: $45 billion (Phase 1)

High-speed rail plans

Scope: 500 km of high speed modern rail network linking north and south Egypt and linking the Mediterranean with the Red Sea. The network consists of three main lines. Developer: Ministry of Transport Stage: In bidding Estimated value: $14 billion

Rod al-Farag Axis

Scope: The Rod Al Farag Axis received The Guinness World Record for the widest suspension bridge in the world. The bridge is 540 meters long and 67.3 meters wide. It has 6 lanes in both direction. The suspension towers are 92 meters high with 160 cables each. Developer: Ministry of Transport Stage: Complete Estimated value: $9.6 billion

Badya Palm Hills

Scope: 40,000 units residential development in 6th October City. The project Includes a shopping mall, schools, hotels and commercial offices. Developer: Palm Hills Developments Stage: Design Estimated value: $8.5 billion

Jumeirah Bay Ras el-Hekma

Scope: 1.1 million square meters waterfront project with 3,500 residential units in seven zones surrounding a 270,000 square metre lagoon. The project features a 2 km beach, shopping mall and a hotel. Developer: Jumeirah Real Estate and Sakan Developments Stage: Design Estimated value: $1.7 billion

Al Habtoor City Cairo

Scope: Three 5 stars hotels, three luxury residential towers, six mid-rise residential buildings, 204 luxury villas, An international school, shopping mall and polo club with two polo fields. Developer: Al Habtoor Stage: Study Estimated value: $8.5 billion

Mostakbal City

Scope: Integrated mixed-use green city

• n 11,000 acres along the Cairo-Suez
• road. The development is divided into

five phases. 50% of the project land is dedicated for open green spaces. Developer: El Mostakbal Urban Development Stage: Construction Estimated value: $10 billion

Hyde Park New Cairo

Scope: An integrated 18,000 units residential project in New Cairo Developer: DP World Stage: Construction Estimated value: $5.6 billion Scope: 3,000 villas and townhouses, and 88 residential buildings. The project is built on 4.7 million square meters of land and includes an office park, retail complex, schools and healthcare facilities. Developer: Hyde Park Properties Stage: Construction Estimated value: $5 billion

Cairo Metro Lines 3 and 4

Scope: Line 3 calls for the construction of 47.87 km of track and 39 stations and is carried out in four phases. Line 3 links Cairo airport, Abbasiya, Ataba, Cairo University and Rod El Farag. Line 4 Phase 1 is 18.8 km linking Hadayek El Ashgar in Giza to El Malek El Saleh station in Cairo. It comprises 17 stations. Developer: Egypt National Authority for Tunnels Stage: Construction Estimated value: $15 billion

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Prepared by Ed James Director of Content & Analysis, MEED Projects E: edward.james@meed.com

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