LIVING "By the Real Estate Leaders" Fall 2015 - Issue #7 | Page 9

So how is the plan for the new capital affecting development in
the area?

MH: I imagine that in 20 years, Sokhna will be comparable to the Fifth Settlement now. The new capital is expected to develop in the area between
Madinaty and Sokhna, and that is partially why prices are going up. The other
attraction is that Sokhna is still the only beach resort in Egypt that is just one
hour away from Cairo.

MG: There are still a lot of negotiations about the new capital, and it may end
up that they develop the administrative zone and wait on the rest of it, but
the idea that it is being developed is enough to bring investors to the area. At
the end of the day, buyers think of it as a package: they buy property in the
Fifth Settlement or 6 October City, and they have to have a place in the North
Coast and a place in Sokhna. I think that the new capital will change things
and that people will be more willing to make larger investments in the area.
But the problem remains that Sokhna is still a weekend destination, and even
then it only reaches 30-40% occupancy, unlike Sahel, which runs for three
months a year. This is why there are fewer services in general. Shamm El
Nessim is probably the only time that you’ll find large numbers of people in
Sokhna, and even then it is limited because Gouna attracts a large crowd as
well.

In the past few years, it seems that summer and winter destinations are not as rigid as they once were (i.e. many vacationers
go to the Red Sea in the summer). Do you think that this
distinction between summer destinations and winter destinations still exists for buyers?

MH: I think that the government is working to change this over the next few
years with destinations like El Alamein City on the North Coast, which is being
developed as an actual city that will run all year. Also, the infrastructure that
Emaar has developed in Marassi must be used all year as well, so I think things
are changing in Sahel.
Sokhna is also changing because of the new capital, and it will probably
become a year-round destination as well. I think that, in the future, all of these
destinations will be used all year, but people will still prefer to go to Sokhna in
winter and Sahel in summer.

MG: There is also a difference in crowds – people don’t just look at the
weather. Some people follow the parties and others try to avoid crowds, so it
depends on what individuals want as well.
What do you expect will happen to the price of property in
Sokhna in the coming period?

Sokhna is also an area with many factories. Does
that affect the price of property?

MH: I don’t think it matters to most clients and very few of
them care about this. One client was telling me that he was
concerned about pollution in the area, especially after the
expansion of the canal, but this was a very rare case. Generally,
clients look at two things: the name of the compound and who
lives inside. Even if the beach is rocky – which is the case in
many areas - most people don’t mind. They just care that they
have a view of the sea from the villa, and that their neighbors
are decent people. If you really think about it, Ras Sedr is the
best destination in Egypt; it has the best weather, good wind,
the beaches are nice and sandy, but nobody really goes. So
people invest more in communities and the name of the
developer.
But does the environmental factor affect the
sustainability of the area over the next 20-30 years?

MH: I think that in 20 years, Sokhna will become a residential
area and that the coastline to Hurghada and beyond will be
developed. Once it becomes a residential area, it will not matter
if it is polluted. In 20 years, it will be considered very old and
people will be attracted to a new area, because that is how
things happen in Egypt; we develop areas, exhaust them and
then we move on to something new rather than trying to fix
things, and this is exactly what happened in Sahel.
The other factor is that President Sisi made a very good decision
regarding the area between Zaafarana and Hurghada; he has
prevented the development of any compounds in this area, so it
is expected that it will be a corniche, which is the best way to
bring life to this area. This is how people think anywhere outside
of Egypt; they develop public beaches on the beachside and
build properties on the other side.

How important is the developer’s role in the
stability and sustainability of a compound?

MH: The developer's name is crucial and people are right
to follow the name or reputation when it comes to investment. When a developer grows, he cares about his reputation, because he knows that if he fails once, he will not
have people's trust in the future. I think this is the number
one decision-making factor for certain people, partially
because it builds trust, and also because it is tied to a
certain community.

MH:

The price of property is already rising, and buyers are starting to
compare investing in Sokhna to investing in Sahel, but up until now, Sokhna
is still cheaper than Sahel. This year, we are seeing prices go up to EGP
12,000-13,000 per square meter in Sokhna, whi