Q&A With Philip Blumberg

Cityscape EGYPT


Q. What is the biggest challenge for Egyptian real estate market this year?

A. The biggest challenges to the real estate market are intertwined with the challenges that face Egypt. With the severe slow down in the Egyptian economy including financial, tourism and construction sectors, the natural outcome for real estate is a severe slow down as well. Real estate values and construction activity are derived from the larger economy so until the Egyptian economy is stabilized spurred by governmental action, recovery will be at a trickle rate. Important prerequisites to recovery are government and financial stabilization through pending IMF and US aid packages.

Job creation is the key however.

And that requires confidence in Egypt to attract and maintain foreign direct investment and new manufacturing companies. One of our businesses, Blumberg Grain, is considering such an investment which would also provide basic infrastructure to the agricultural sector allowing farmers to increase crop yields and income.

Q. To what extent do you think regional and international confidence will return to the Egyptian real estate market?

A. It’s directly related to the degree the Egyptian government is able to kick start Egypt’s economy with economic development projects, which is key to restoring confidence and increasing construction and real estate activity. Infrastructure investments related to roads, transportation and power are good examples.

Q. What do you see as the biggest opportunity on the horizon?

A. We see long term opportunities in quality office development, retail and residential projects. In the short term we see very considerable opportunity in the industrial and warehouse sectors. There is tremendous built up demand for warehousing at ports, free zones and in the new projects being contemplated in the economic plan known as the Neda, or Renaissance Plan. These are more than just words, as we are preparing now to commit to a large scale investment in Egypt in this sector and to move to expand our manufacturing business with construction of manufacturing plant and export Hub in Egypt. The Hub will employ 1000 Egyptians and potentially increase Egyptian exports by USD 6 Billion and the country’s GDP by 2.2 percent. We have faith in Egypt and in our working with government leadership see a very strong and decisive effort to generate and support economic development projects like our’s. As long as this continues we are optimistic about prospects for Egypt.

Q. What are the benefits of investing in Egypt?

A. Location between major markets and the central role that Egypt plays in the region.

Q. What recommendations would you make to Egypt’s policy makers to increase investor confidence and stimulate the real estate market?

A. Demonstrate their economic development intentions with action. Do some things that are healthy for the economy now to restore confidence in Egypt at home and abroad.

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