Egypt government launches $21bn ‘South Med’ real estate mega-project

In a bold move to bolster Egypt’s tourism sector, the government has launched the “South Med” project, a massive EGP1tn($21bn) investment designed to transform the country’s North Coast into a premier global destination.

The announcement came during a press conference at the New Administrative Capital on Tuesday, with key figures from the government and private sector in attendance.

A strategic partnership

The “South Med” project is a collaborative effort between the Egyptian government and the private sector, specifically the Talaat Moustafa Group(TMG). This partnership is poised to yield significant economic benefits, with projections of EGP1.6tn in sales and the creation of 1.6 million direct jobs, said the country’s prime minister during the announcement conference.

Prime Minister Madbouly emphasised the project’s alignment with Egypt’s Vision 2030 and the National Strategic Plan, highlighting the North Coast’s potential as a hub for tourism and foreign investment.

“This project, alongside initiatives in New Alamein and Ras Al Hekma, will attract millions of foreign tourists and provide vast employment opportunities, drawing young people to the region,” he stated.

Development and features

Spanning 23 million square metres, “South Med” will feature over 2,000 hotel rooms and numerous residential units, all managed by international hotel brands to ensure high occupancy year-round.

The project will also boast a large international marina capable of accommodating yachts and tourist ships, further positioning Egypt as a key player in the Mediterranean tourism market.

Hisham Talaat Moustafa, CEO of TMG, underscored the project’s significance as a public-private partnership.

He highlighted the strategic location of “South Med” close to Alexandria, with convenient access to Alamein International Airport. This positioning, combined with the luxury amenities planned, is expected to attract high-spending tourists from Europe, the UK, and GCC countries, he said.

 

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Record-breaking sales

The launch of “South Med” has created a buzz in the Egyptian and neighbouring real estate markets, as evidenced by the record-breaking sales after reservations opened.

Within the first 12 hours, the project garnered EGP60bn($1.25bn) in sales, setting a new benchmark for real estate and tourism projects in Egypt.

Economic impact

Egypt’s Minister of Housing, Utilities, and Urban Communities, Assem El-Gazzar, highlighted the broader economic implications of the project.

With its expected EGP1.6tn in sales and potential to significantly boost Egypt’s GDP, “South Med” represents a critical component of the government’s strategy to integrate private sector investment into national development goals.

A magnet for GCC investments

In recent years, Egypt has become a focal point for investments from the GCC countries.

Since 2021, GCC institutions have funnelled more than $115bn into Egypt’s real estate market. Leading this investment surge is the UAE with $75bn, followed by Saudi Arabia’s $30bn, according to a survey by consulting firm Knight Frank.

GCC nationals are particularly drawn to Egypt’s residential sector, often investing around $1.1m per property on average.

Notably, 40 per cent of GCC individuals are willing to allocate over $1m to their next property purchase in Egypt, with an average budget of $1.86m.

Residential sector: A growing force

The residential sector has emerged as a dominant force in Egypt’s real estate landscape, attracting both second home buyers and investors alike.

Faisal Durrani, partner and head of Middle East Research at Knight Frank, highlighted the growing appeal of Egypt’s North Coast and Red Sea regions, which have seen significant growth due to their pristine beaches and vibrant holiday atmospheres.

Its current value of sales is approximately $18bn, and expected to soar to $30bn by 2028, notes Knight Frank’s Destination Egypt report. The first quarter of this year alone saw the delivery of residential projects worth $1.3bn, highlighting the sector’s rapid expansion.

According to the Knight Frank survey, 68 per cent of GCC investors favour the residential sector, followed by branded residences and retail spaces, which attract 30 per cent and 29 per cent of respondents, respectively.

While Greater Cairo remains a top destination for residential property seekers, the North Coast is the second most popular location, with 35 per cent of buyers showing interest, followed by Sharm El Sheikh at 31 per cent.

Future prospects

With approximately 8,000 homes currently under construction across 15 projects in Egypt’s Mediterranean coastline, many conveniently located near Alamein International Airport, the “South Med” project is set to further elevate the region’s status as a premier tourist and investment destination.

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