TBE has been hearing a lot lately about the state of downtown real estate. A pair of articles in today’s al-Shorouk, both of which contain the same information, shed some light on the topic. TBE brings you the important information in convenient bullet form (with TBE’s analysis in parentheses), along with a video suggestion for marketing downtown apartments:
- According to ‘Alaa Saba, Chairman of Beltone Financial Management, Sameh Sawiris is one of the main investors in the Ismailiyya Company for Real Estate Investment, along with a prominent Saudi businessman, a Saudi investment company and a number of smaller investors. The company was established under the auspices of Beltone Financial Management for the purpose of buying downtown real estate. (A lot of the rumors have centered around “Sawiris” (which brother is rarely stated) buying up buildings downtown. Apparently the rumors are partly true, though as a private company, interested parties are unlikely to learn who owns what share of Ismailiyya.)
- Ismailiyya currently owns 18 buildings, on Talaat Harb, Adli and Champollion Streets, and is raising $80 million in new capital to buy 18 more buildings. It plans to be profitable within 5 years, including 1-1.5 years to complete the purchases and 2 years to complete renovations. The buildings will rely on rent payments to become and remain profitable. (TBE: This strikes us as unrealistic considering current rents downtown and the lack of basic services like supermarkets that residents of more upscale (high-rent) neighborhoods take for granted. While TBE has no doubt that downtown will be ripe for gentrification at some point in the future, when the spawn of today’s “pioneers” in the satellite cities get bored of the suburbs and want the authentic urban experience that downtown offers, our own timeline is about 10-20 years before this happens. This is because Cairo’s second “great migration,” of residents and businesses to the city’s outskirts, has not yet tapered off, nor even reached a mature stage in its development. In this schema, the first “great migration” was from the countryside to the city. Without reading too much into it, one can say that the process imprecisely mirrors what occurred in US cities, wherein mass migration of African Americans from the south to the cities of the north was followed by “white flight” to the suburbs.)
- After the company reaches profitability, it will go public, with a listing on the Boursa.
- Public-private partnership blaa blaa blaa in developing downtown.
- Not everyone is happy about Ismailiyya’s increasing presence in the market. The president of the Holding Company for Insurance , a government-owned company which, along with its subsidiaries, has over 100 holdings downtown including 421 buildings, had some sharp words, announcing that the company would never sell its properties to Ismailiyya. His reasoning was that private sector companies aim for profit, while public companies take social and historical factors into account. (TBE: No comment.)
- (As TBE was about to go to press, we discovered some anomalies in the article. In the print edition, the company is referred to as the Ismailiyya Company for Real Estate Investment, but the article online calls it الإسكندرية للاستثمار العقاري, which a quick search reveals is part of the Talaat Moustafa Group. This doesn’t make sense for a number of reasons. So we at TBE have preserved the original, print-edition name, the Ismailiyya Company for Real Estate Investment, which we believe is the right one. Also the article in both its online and print iterations misspells the name of the Holding Company for Insurance (الشركة القابضة للتأمي). Note to al-Shorouk: If non-native speakers are catching your spelling errors, your copy editors are not doing a good job.)
Bonus Video Feature:
This song might be a good marketing tool for Ismailiyya when they get around to marketing their renovated downtown apartments to edgy, too-cool-for-Palm-Hills consumers: