On 15 January 2012, the Kuwait Times ran a headline which read: Kuwaitis urged to invest in Egypt real estate market. The article reports on the Eighth Egyptian Real Estate and Investment Exhibition which took place in Kuwait from 11 - 15 January 2012.
During the exhibition, the Egyptian Ambassador to Kuwait, Abdulkareem Sulaiman, urged Kuwaitis to invest in Egyptian real estate, stating that: "The importance of [...the Egyptian real estate] sector lies in its connection with many other supplying industries such as metal, cement, sand, ceramic, wood, electricity, and others. This means that the real estate sector can power many other economic sectors related to it." He then went on to say "After the revolution, small spaces were freed up in up market areas. Some plots there start at 90 meters; it was never available before."
I'm sure that both of Sulaiman's comments are valid, but there is a major flaw in his sales pitch. Yes, the ambassador eloquently educates his Kuwaiti audience as to the direct and indirect benefits of increased investment into their real estate market, but crucially he fails to mention why the Kuwaitis may want to invest in Egypt. Perhaps this is because benefits in Egyptian real estate investments for Kuwaiti (or any) investors are few and far between. In fact, far from being mutually beneficial, I see any arrangement here as a win-lose situation: win for the Egyptians - lose for the Kuwaitis.
My reason for concern here is simple and a quick run down the recent Egyptian headlines helps to explain why:
- Fox News: Egypt’s transition into democracy grows messier
- AFP: Petrol shortages trigger tension in Egypt
- Newsday: Egypt's military steps up battle with activists
All three of the above headlines point to the fact that, despite their relatively bloodless revolution which brought an end to the 30 year rule of Hosni Mubarak, Egypt is still in a period of significant instability. But for me, the headline which provides the best summary as to why Egypt is not a good place for Kuwaitis to invest in real estate was posted on the ABC news website. It read: Egypt: where to from here? In short, post-revolution Egypt is yet to settle down, and the future remains very uncertain. At worst, the signs point to a prolonged period of further unrest. At best, Egypt can expect a slow road to stability, not least because the country is yet to go through a set of free elections, and Mubarak's trial provides a backdrop of uncertainty to any political developments. There are plenty of reasons here to deter potential Kuwaiti investors, even if they were tempted by the Egyptian Ambassador to Kuwait's speech, which I very much doubt.
As a former resident of Cairo, and lover of Egypt, I hope more than anyone that the country gets back on its feet as fast as possible. I also hope that Egypt will become an attractive place to invest in real estate but sadly I can't help feeling that the Egyptian Ambassador to Kuwait has got a little ahead of himself. I will watch with interest to see how many Kuwaitis take him up on the offer to relocate to the land of the Pharaohs. Let’s not hold our breath though…
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