Wednesday, 21 August 2019 01:14 GMT
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UAE- Turkey, Egypt property benefit from shifting geopolitical sands




(MENAFN - Khaleej Times) Scroll through Instagram or Facebook these days, and you're as likely to be served an ad for a new Emaar development in Istanbul or Cairo as one in Dubai.

The shift towards Turkey and Egypt is no coincidence. Historically, Lebanon was the preferred regional destination for many UAE vacationers, developers and investors. But things have changed.

We (the Propertyfinder Group) operate large real estate portals in seven regional markets, including Egypt and Lebanon. And earlier this year, we secured a large stake in Zingat.com, the fastest growing property website in Turkey with over 8,000 paying clients.

Our international expansion strategy has considered the local conditions on the ground of each individual country but also the synergies between the markets. Egypt was part of our initial international expansion, quickly followed by an acquisition of realestate.com.lb in Lebanon. Later, we added Bahrain, Morocco and then acquired eSimsar.com in Saudi Arabia. We've seen first-hand the effects of shifting geopolitics on individual real estate markets within the region. And the timing of the investment in Turkey was no accident.

UAE-based investors were once the most active foreign buyers in Lebanon. In 2009, UAE investment in Lebanon exceeded $1 billion (Dh3.67 billion), according to an Inter-Arab Investment Guarantee Corporation report. Dubai's Al Habtoor Group, Damac Properties and Planet Group, among others, launched various big-ticket projects in Lebanon, such as five-star hotels, high-rise apartments and malls in the early 2000s.

But five years ago, as the war in Syria ramped up, the UAE and its Gulf allies asked their citizens to avoid Lebanon due to escalating security concerns. This had an immediate effect on foreign investment in the country. In February 2016, the UAE's Ministry of Foreign Affairs upgraded the travel warning to Lebanon to a complete ban. UAE vacationers and investors starting looking elsewhere. Egypt and Turkey have been the main beneficiaries. Big drops in the local currencies against the dollar have made the case even more compelling.

According to estimates by Agaoglu, the largest developer in Turkey, about 60 per cent of foreign investors who purchased property in Turkey came from the Middle East last year, and analysts project a continued upturn in investor appetite.

Emaar, for example, is looking to make a Little Dubai in the downtown area of Istanbul. In 2012, it began developing Emaar Square, similar to what Emaar delivered with The Dubai Mall. The project plans include building Turkey's largest shopping mall and five-star hotels. In 2013, Emaar Turkey, the wholly owned subsidiary of Emaar Properties, launched The Address Residences Emaar Square in Istanbul. A proven formula, and Emaar's international expansion is growing. Revenue from its international development segments recorded 64 per cent year-on-year growth in H1 2017. Emaar's international development now contributes 22 per cent to its total group revenue.

The Turkish government has been proactive. In a bid to secure more foreign investors in 2013, Turkey passed legislation granting citizenship rights to those investing $1 million-plus into Turkish real estate, and opened up unconditional purchasing power to 129 nationalities. There has been talk in the local media there that this threshold may be lowered further.

Strategically located between Asia and Europe, offering a temperate climate with four genuine seasons, modern infrastructure, a rich culture and a liberal outlook, Turkey has become one of the more high profile and interesting options in the burgeoning economic citizenship sector.

Meanwhile, in Egypt, the devaluation of the Egyptian pound against the USD (by over two-thirds in the past five years with 50 per cent in the last alone), has enticed holders of USD-backed currencies. The crystal blue shoreline of the North Coast is on top of the list for expats and locals alike. Prominently located on the Mediterranean Sea, 214 kilometres north from Cairo, it's proven to be a viable alternative to summer in Beirut.

The transformation of its capital thanks to a new $45 billion investment is also part of a UAE-Egypt government partnership, and being managed by Dubai-based Capital Group Properties. The project, which is being built in phases over 10 years, includes 10,000 kilometres of streets and tens of thousands of residential units. A growing list of UAE-based firms, including KBBO, Dana Gas and Majid Al Futtaim, are investing millions in Egypt's development.

While no one can be 100 per cent certain of what the future holds, synergies between the UAE and these two regional markets right now are very strong and growing.

The writer is chief commercial officer of Propertyfinder Group. Views expressed are his own and do not reflect the newspaper's policies.

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UAE- Turkey, Egypt property benefit from shifting geopolitical sands

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