Analyst: real estate market bubble a concern CAIRO: Sixth of October Development and Investment Company (Sodic) signed Monday with international golfer Greg Norman for the establishment of an 18-hole signature golf course under his name at the company s Allegria development in El Sheikh Zayed District on kilometer 38 of the Cairo-Alexandria Desert Road. Once completed in 2009, the course is set to become Norman s Great White Shark Enterprise s first venture into the Egyptian and North African markets. Norman s company has already designed several courses in the United Arab Emirates (UAE), Oman, Qatar and Bahrain. Allegria is a 4 million square meter all inclusive housing development, which the company plans to market to well-to-do locals and Europeans using the second home concept, Sodic Managing Director Maher Maksoud said. In addition to the golf course, compound plans include 1,400 housing units, five-star hotel, health club and three schools including the British International School. Maksoud added units may become more affordable to upper-middle class locals using the recently-activated mortgage financing system. Allegria is one of several projects of its kind announced by real estate developers in the past year. UAE s Emaar is working on a $4 billion compound in Old Cairo and a $10 billion resort in Sidi Abdel Rahman on the Mediterranean coast, Jordan s Shaheen Group is developing a $2 billion resort in Sahl Hasheeh near Hurghada, and UAE s Damac is set to invest $16 billion in a resort on the Red Sea near Hurghada. Nemat Allah Choucri, HC Brokerage real estate analyst, says real estate investment is likely to remain profitable for at least two years due to the industry s cyclical nature, when some of these and other projects are scheduled for completion. It is possible that, then, developers will run into an oversupply problem. They re targeting the very high end of the market, and there is a concern that we are heading to a bubble, Choucri said. But these market players would not have moved into the Egyptian market now if they thought the bubble is about to burst soon. Choucri added the current real estate boom is happening mainly because of the large amounts of gulf money moving in. On the local investment front, she said higher inflation has turned many investors to real estate as a safe investment option. In October, Sodic shareholders approved a LE 1.1 billion capital increase partly to finance the acquisition of 984,900 square meter of land, including a 858,500 square meter plot in New Cairo on Road 90 adjacent to the new American University campus and the Katameya Dunes project. In addition to the newly acquired land, the company has developed 2 million square meter of its 6 million sq. m. possessions in El Sheikh Zayed as an upscale residential compound, Beverly Hills.
