CAIRO // Few drives match the scenic value of a trip to Uptown Cairo, Emaar Properties's multibillion-dollar hilltop development overlooking the Egyptian capital. Cruising along beside the ruins of the city's ancient Roman aqueduct, you rise above the sprawling Qarafa, Cairo's historic cemetery district otherwise known as the "city of the dead". Ahead are the walls of the citadel, Saladin's fortress built to ward off the crusaders. Its profile is dominated by the domes and minarets of the Mohamed Ali Mosque.
Approaching the citadel, you veer right onto a steep road that cuts through the Muqattam mountains. In many places, the mountains are cleanly sliced into vertical faces. Stone from Muqattam has provided the building blocks for Egypt's temples, mosques, pyramids and cities for thousands of years; the mountains have literally been moved at the hands of one of history's longest construction booms. It began in 4000BC and seems to have never ended.
Uptown Cairo is another venture in the long tradition of excavating Muqattam to serve grand ambitions. But this time the mountain itself is the backdrop to the monument, a suburb that Emaar says will be "sophisticated and luxe, yet simple and unpretentious". "We are certainly using the unique terrain to our advantage," said Sameh Muhtadi, the chief executive of Emaar's Egyptian subsidiary. Home prices at Uptown are at the upper end of the market, with split townhouses being the most affordable way to secure one of the 4,000 keys that Emaar says it will deliver by 2015. In previous rounds of sales, they sold in the range of 3.5 million Egyptian pounds (Dh2.3m), while the villas often sold for well over 10m pounds.
"All has been refined to its essence. All that is unnecessary has been stripped away, leaving only what matters most," the company promises. "Look up. That's where you are headed - a higher standard of living calls, and you follow." If you follow the call today, you are greeted by a vast construction site. Emaar is excavating 20 million cubic metres of dirt and rock to flatten the landscape, almost 10 times the amount of Muqattam stone needed to build the Great Pyramid of Giza.
The site features what Emaar says is the world's largest sales centre, a 7,000-square-metre showcase for the company's projects in Egypt. After taking a multimedia tour of its developments and having a coffee in the outdoor cafe, Emaar's sales staff - slick, pinstripe-suited men and unnaturally bubbly women - will get down to business. "Come, let me show you the Street of Dreams," one said. The Street of Dreams is, aside from the sales centre, the only finished part of Uptown Cairo, a 50-metre-long, tree-lined road that feels as though it was plucked directly from one of Emaar's Dubai developments and dropped neatly in the middle of the Uptown site. Each of the six types of villas available in the project is there.
Uptown Cairo sits among a growing field of high-end developments in Egypt. Many are being pushed by UAE developers such as Emaar and Damac. In looking to grow beyond their home base, they are creating passable replicas of Dubai in the process. "These guys came in because they love glamour, they love expensive looking villas," said Angus Blair, the head of research at Beltone Financial, a Cairo-based investment bank. "So they are bringing 'Dubaism', in terms of architectural qualities or their lack thereof, into Egypt."
Until recently, property developments in Cairo were constrained by its city limits, meaning there was little space for the expansive suburban projects that are currently under way. Properties in the city centre and inner areas remained hamstrung by archaic rent and price-control laws put in place after the socialist revolution of 1952. The effect of the laws, which keep rents at 1952 prices and make eviction of tenants almost impossible, has been the decay and stagnation of inner Cairo, with landlords seeing no incentive to invest in their crumbling buildings.
However, this is changing. "People have been able to breathe in the past few years and get out of Cairo - breathe literally, because of the pollution," Mr Blair said. "People want houses to bring up families, with gardens, pavements, trees and clean air." The trend for the western-style suburbs sprouting on the edges of the city was kicked off by Egyptian developers such as Sodic and Palm Hills, which have built sprawling villa communities on the outskirts of Cairo. The Talaat Mostafa Group (TMG), Egypt's largest property developer, is working on the massive Rehab City and Madinaty projects in the area known as New Cairo; the company says more than 800,000 people will live in the two areas once completed.
New Cairo, which lies on the edge of the city's urban fringe, is now home to the relocated campus of the American University in Cairo (AUC), the school of choice for the Egyptian elite and the thousands of international students who flock to the country every year. The university's move from its historic home base in the centre of the city was controversial, but has anchored the long-term appeal of New Cairo. So, too, has a deal with the chic Lebanese developer Solidere, which oversaw the rebuilding of central Beirut, to build the urban core of the city.
The flurry of high-end developments is not limited to Cairo. Emaar is also behind Marassi, a resort community on the Mediterranean coast that will include signature UAE upmarket frills such as an Armani hotel and beachfront villas offering "the ultimate in luxury". Easily the largest of all is Damac's Gamsha Bay, a Dh60 billion (US$16.33bn) project on the Red Sea coast, near the holiday town of Hurghada.
Covering almost 30 million square metres, the development will be more than six times the size of Dubai Marina or five times as big as Reem Island. It is the biggest development in the country, and will be a direct rival to the Sinai city of Sharm el Sheikh as Egypt's coastal tourism capital. But in a nation where the majority of the population live on or near the poverty line, are there enough buyers for all this upmarket property? Those in the know say yes.
The global economic crisis - largely driven by a housing market bubble - has made its way to Egypt largely through a collapse of the stock market. The Egyptian exchange has lost almost 60 per cent of its value since a peak in April, although traders say most retail investors either sold before the full extent of the crash or are holding on to their stocks as long-term investments. As in many emerging markets, the bulk of the selling in recent months has been by foreign institutions.
Last week saw a strong rally among local buyers, who see stock in companies including Orascom Telecom and EFG-Hermes as undervalued. They were large net buyers all week, while foreign individuals and institutions continued to be net sellers. Due to the country's relatively underdeveloped mortgage and banking industries, the credit crisis is causing less pain than that of many of its neighbours. Just 10 per cent of the population is estimated to use banks, while families spend much of their productive lives saving to buy homes for their children, a pre-condition to marriage and independent living.
Egyptians have a cultural aversion to debt, and a financial and economic crisis at the turn of this century left many highly sceptical of the country's financial system. Savers are highly conservative - large amounts of wealth are kept offshore and it is not uncommon for wealthy families to keep safes filled with foreign currency, as well as other traditional stores of wealth such as gold and jewellery. The result is a banking sector with a loan-to-asset ratio of less than 60 per cent, and plenty of cash-rich individuals.
"This is still very much a cash business, unlike in other countries where payments are through mortgages," said Mr Muhtadi. "There has been very little change in that, so the country is much more immune to interest rate changes and banking issues." The first four of Uptown Cairo's 10 communities have been sold out, and Egyptians accounted for 90 per cent of the sales, with "very little speculative buying", he said.
The next batch of communities will not be released on to the market until early next year. As with many of Cairo's new developments, prospective buyers are hoping that the tough global market and lower prices for construction materials could combine to pull prices down. "The top end has become expensive at a sharp rise - too sharp I think," said Mr Blair. "So what you will have is a tailing off, which is absolutely fine - in free markets you need corrections to find the realistic price to go back to, the median of what people can afford."
@Email:tgara@thenational.ae
