CAIRO: Despite cutbacks in their Dubai operations, Al Futtaim Group has managed to take advantage of continuing strong demand in Egypt's real estate and housing sectors to continue construction on the Cairo Festival City project. The project, which will cover 700 acres in New Cairo, will include leased retail space, a shopping mall, a movie theater, office space, five star hotels and plenty of green areas for the enjoyment of residents and visitors. A luxury residential compound, Oriana, with villas and condominiums as well as an American international school and other facilities will cover one-third of the project site, providing homes for families looking to live in the pristine isolation of New Cairo. Retail tenants will include several brands coming to Egypt for the first time such as Swedish furniture giant IKEA and British department store Marks & Spencer. While the project will not be fully completed until at least 2015, the majority of the project's outlets will be in operation in 2011, and some housing units will be available for purchase as early as the end of this year. Daily News Egypt sat down with General Manager of Cairo Festival City Mohamed El-Mikawi to discuss the progress of the project, what it will offer Egyptian consumers, and where Al Futtaim is headed next. Daily News Egypt: How is Cairo Festival City weathering the financial crisis?Mohamed El-Mikawi: Well, despite slowing market conditions we haven't seen much of an impact. There are long lists of retailers and local businesses interested in renting space in the project. The project has actually benefited from the slowdown. Before it happened, real estate prices and the costs of building materials and contracting had gotten out of control. The crisis has corrected the market and brought things back down to where they should be, making real estate more affordable. So there's been no slowdown at all?We're hiring in Cairo. It's not the same situation as Dubai here; demand remains strong, the project has been on the books and plenty of funding is coming in. We'll also be generating revenue soon from home sales and retail rentals, so things are looking good. Are you concerned at all about over-saturation in the New Cairo luxury housing market? That was a problem for other major real estate developers in the past, but they have overcome this by switching into different tiers of housing in the area. Any healthy market should take the shape of a bell curve with the majority of supply targeted at the middle class, and the market in New Cairo is getting closer to this. Cairo Festival City's housing is considered luxury and targeted at the upper class, but we've been seeing a lot of interest and I don't think that there will be a problem finding buyers. What challenges has Al Futtaim faced in Egypt? Al Futtaim has become very involved in the Cairo market since beginning the project last year. Working with local partners like Orascom on the project has become an important part of our strategy and a way of giving back to the community. The project employs mostly Egyptian workers and the majority of materials being used are local as well. Of course, there are differences from Dubai and we've had to learn a lot about local conditions. For example, Dubai is tax-free, while Egypt has a more complex tax system. It's all about getting to know the local market. What is Al Futtaim looking to accomplish with Cairo Festival City? We're looking to create a brand. We've done this successfully in Dubai and hope to do so elsewhere in the MENA region after completing the Cairo project. We want to offer people a clean, beautiful place to shop, enjoy entertainment, and live surrounded by everything they need.
