We regard Egypt as offering superior ‘relative value’ to the international property
investor for a number of reasons:
• With strong economic fundamentals and political and economic reform well-underway, long term prospects for the economy are very good. The Government has streamlined the property ownership process for overseas investors and is actively seeking inward investment, thus providing favourable conditions now for property investment by foreign nationals.
Wider availability of mortgages for foreigners (which carry 0% tax on interest) will add liquidity to the market, and there is no inheritance, income or capital gains tax for overseas investors in Egypt. Furthermore, investment entry points are low and projected yields are high.
• Egypt is at the beginning of an expansionary cycle, in contrast to many property investment markets. In Spain, for example prices, on the coastal regions have been falling****, while Florida has been hit-hard by the recent ‘credit crunch’*****. Property markets in other less established
areas eg Dubai, Bulgaria, Croatia have already attracted significant foreign investment, so investors seeking aggressive capital growth opportunities are looking further afield. As well as the obvious buoyancy of the underlying economy in Egypt, the fact that the country has historically under-exploited its role as a major tourism centre suggests there is substantial value currently in Egyptian real estate related to the tourist markets. Growth in European tourist traffic will have the effect of driving short-term rents (and therefore yields) higher. This effect is likely to be particularly pronounced in the Red Sea Region, where there are plans for
a major new international airport at Ain Soukhna.
• Indeed, Egypt’s year round sunshine, relative proximity to Europe, low crime rate and rapidly improving infrastructure will in our view see it emerge as one of the world’s major tourist destinations over the next few years. Finally, we feel property prices in Egypt should benefit from petro-dollars: Gulf investors (who often have a preference for assets in the Middle East) are increasingly likely to be attracted to Egypt’s strong fundamentals, and the fact it welcomes foreign investment.
* International Monetary Fund Statistics, 2006
** International Monetary Fund Statistics, 2006
*** International Monetary Fund Statistics, 2006
**** Financial Times, 30-09-07
***** Financial Times 30-09-07
The Deal:
Its always good to be first with an offer that is very much in the vain of buy2let or, as I would say, "jet2let" investment. With prices from just £26,000 up to £52,000 you can invest in an existing building which will be refurbished. This suits many who do not want to be concerned about the financil viability of a builder or developer.
Tranquilla Town is on Sheraton Street right where the fast growing numbers of local workers wish to live. This population is growing fast with the growth in tourism in Hurghada and also the growth in general business activities. Lawyers, accountants, doctors from Cairo and Luxor are in need of accommodation in this area.
In addition there are those involved in the Hotel and Hospitality industry and of course the huge diving and boat trip industry. Final there are those expatriates involved in the fast growing real estate industry who need accommodation. Sales people from UK, Germany, Russia, Italy and elsewhere. All of these people arriving have pushed up property prices and rentals.
All monies held in escrow account at UK lawyers until title transfer. You pay 90% of the price and get title. The final 10% is paid when the refurbishment is complete (within 6 months).
All you need to buy is appliances and furniture and packs will be offered for around £2,500.
Just £1,000 refundable reservation fee will reserve your unit in this building of 53 apartments.
For further details on Tranquilla Town contact Jet2Let Property Ltd
Tel: 0044(0)113 3131000
Showing posts with label Cairo. Show all posts
Showing posts with label Cairo. Show all posts
Tuesday, June 3, 2008
Tranquilla Town - Hurghada's first pure domestic buy2let
Wednesday, April 30, 2008
Egypt's credit worthiness commended by Capital Intelligence and Moody’s
Reported recently was the following story on Egypt's currency rating and reflects how this economy is likely to be grabbing more news headlines. The big reduction in government debt, and the likely economic growth around last years rate of 7.1%, adds to the positive story that Egypt is increasingly viewed as a key economy and one that will attract increasing amounts of foreign investment as domestic economic activity drives the demand for goods and services.
"Egypt’s long- and short-term foreign currency ratings have been raised to BBB-/A3. At the same time the agency has affirmed Egypt’s local currency ratings of BBB/A3.
The statement from Capital Intelligence pointed out that the change in the foreign currency rating reflects the substantial improvement in external solvency and liquidity ratios over the past few years, which indicate strong repayment capacity and an increased resilience to external shocks. CI’s expects that balance of payments trends will remain consistent with external sustainability over the medium term. Egypt’s ratings are also supported by the good progress being made on fiscal and structural reforms, which have helped to improve economic and financial fundamentals.
The statement commended the fact that the external current account recorded its sixth consecutive surplus in fiscal year 2006/2007, which ended in June, net foreign direct investment exceeded USD11billion, while official foreign exchange reserves reached USD 27.4 billion. Gross external debt continued to decline and is estimated by CI to have fallen to a comparatively low 23% of GDP or 60% of current account receipts (CARs). External vulnerability is mitigated by the country’s net creditor position, with the foreign assets of the central bank and commercial banking sector estimated by CI to exceed the external debt stock by the equivalent of 47% of CARs or 18% of GDP in June. Public external debt service is low and official reserves (excluding gold) are currently about seven times as high as the stock of short-term public external debt on a remaining maturity basis (up from four times in June 2004).
Good progress is being made in implementing the government’s economic reform program adopted in 2004. The foreign exchange market has been liberalized; customs duties reduced and trade procedures simplified; corporate and personal income taxes reformed; and tax revenue administration strengthened. The privatization process has gathered momentum: more than 40 enterprises or joint ventures were wholly or partly privatized during the past two fiscal years, the two largest of which were the Bank of Alexandria and Egypt Telecom. Efforts are also being made to strengthen macroeconomic policy frameworks and improve governance.
The statement added that improving macroeconomic management and more assertive structural reforms have contributed to acceleration in economic growth and increased employment. Real GDP increased by 6.8% in 2005/06 and by 7.1% in 2006/07 and is expected to remain above trend in the current year. The upturn in the economy and drawdown of government deposits to retire debt has led to a substantial reduction in the ratio of government debt to GDP from 103.3% in June 2005 to an estimated 78.6% in June 2007. Moody's Investors Service, one of the world’s most respected and widely utilized sources for credit ratings, also, praised positive developments in the Egyptian economy since 2004. Moody’s report said that this growth was driven by several factors including higher oil price, growth of tourism and increased exports. The past year witnessed a remarkable growth in different sectors, including sectors not related to the energy filed, which implies more jobs and more flexibility in adapting to external variables. The report expected the overall deficit of the public government to decrease in the coming years. The surplus in the balance of payments and economic growth are expected to remain the same.
Egypt's rating of susceptibility to external fluctuations went down from 42.7%to 26.6 percent in 2006 and is expected to reach 21.1 % in 2008. This reflects the economy's increased capability of absorbing external shocks especially with the huge increase of financial inflows and net international reserves.
Source: Ministry of Investment"
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