Fathallah Fawzy, chairperson of Fathallah Fawzy Office for real estate development consulting, confirmed that the cost of implementing and building a residential square metre will rise by 60-80% over the coming two months, as a result of the increased prices of construction materials and production inputs after the Egyptian pound’s flotation. The cost of implementing a residential square metre (half-finished) will reach EGP 4,000 instead of EGP 2,000 and EGP 2,500.
Fawzy explained that the last period witnessed a rise in the prices of building materials, labour, transportation, and land, pointing out that the real estate market will be able to absorb these new changes during the second half of 2017.
He pointed out that prices of building materials, especially iron, will not decrease; however, they will stabilise. The current rise in prices differs from the price increases of a tonne of iron back in 2008, which resulted from a lack of raw materials, and then decreased and stabilised after the availability of raw materials.
The current increase is a result of the devaluation of the local currency. The market will be able to absorb those changes within a year, according to Fawzy.
He explained that the current stage requires activating the role of consulting offices and real estate development experts under the attention of real estate developers to expand the size of their investment and to explore opportunities. This is besides the interest of foreign companies to pump investments.
He pointed out that there are many companies that have financial, technical, and developmental skills but just need guidance and studies that grant a good use of resources and achieve optimum return by the implementation of projects that fit the demands of the market.
He said that the aim behind the establishment of his office for real estate development consulting was to provide consultation to companies on how to exploit investment opportunities, to maximise returns, develop projects in the North Coast, 6th of October City, and New Cairo, as well as developing projects in Lebanon and Sudan.
He added that his office works on projects at any stage of development. The office is also responsible for preparing financial studies for investors who want to purchase a piece of land offered by the state, which ensures the targeted profit margin for the developer.
He added that the office provided consultation for many companies, including Polaris, Lake Side by Ernst & Young, Delta Capital, and others.
He pointed out that the office’s capital is worth EGP 10m, and includes technical, marketing, financial, and engineering departments of about 40 engineers and specialists. It plans to hire additional labour when contracting new projects.