Zawya reported that the continuing wave of unrest across the Arab world is putting a strain on the real estate market in North Africa and analysts say that developers, including major ones from the Gulf and Turkey, are starting to feel the pinch, with many projects on hold until stability returns.
According to data from the research firm Zawya, Emaar Properties, one of the largest developers in the United Arab Emirates, has four projects stalled in Algeria.
Out of USD 150 billion worth of projects, more than USD 23 billion are now on hold in North Africa.
Zawya’s data show that a USD 500 million plan to expand the Sabha Airport in southern Libya has also been put on ice. The contractors on the project are Consolidated Contractors, based in Athens and the Turkish company TAV.
Meanwhile, Damac Properties, based in Dubai, has halted a USD 16.3 billion luxury residential and tourism development, Gamsha Bay, on Egypt’s Red Sea coast.
Sheikh Khalifa Bin Zayed City, a USD 100 million project near Cairo planned by the Abu Dhabi Municipality in conjunction with Egypt’s Ministry of Housing and Emaar’s wholly owned Egyptian unit, Emaar Misr, is also on hold.
Other building programs, however, are still going ahead. In Egypt, Emaar has several projects under way or in the final stages of planning. Emaar Misr is currently developing three projects Uptown Cairo, Marassi and Mivida. A fourth project, Cairo Gate, is in the final stages of master planning.
Independent analysts agree that prospects in North Africa are bright in the long term. Mr Chet Riley, a real estate analyst at Nomura Investment Bank in Dubai said “There will be delays, but ultimately the projects will get done. The fundamentals of these places haven’t changed and neither can demand for real estate in the long run.”
Mr Martin Kohlhase, assistant vice president at Moody’s in Dubai, said North Africa remained an opportunity for developers, compared with the overbuilt Gulf states. He said “If you strip out the noise created by the unrest, it is clear that the fundamental economic factors bode well.
Still, whatever the longer-term prospects, the wave of unrest has set back the recovery that started late last year in the region’s real estate markets after the slump brought on by the 2008-2009 global financial crisis.
( source: www.steelguru.com