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Developers still fighting Mubarak-era problems.

The Egyptian property market is being crippled by legal uncertainties and ongoing land disputes with local and regional developers.

The fall of former president Hosni Mubarak last year brought about land ownership disputes between investors and former regime members. These have turned into heated legal disputes.

"The industry at large remains crippled by that have not yet been resolved. These uncertainties, to some extent, restrain developers from launching new projects on their residual land plots. They also limit the appeal of ongoing developments that are burdened with potential legal risks," said Jan Pawell Hasman, associate vice president of equity research at EFG-Hermes.

Last year, Egyptian court ruled that Talaat Mostafa Group(TMG), one of the biggest publicly traded property developers in Egypt, had its legal title to its land in the Madinaty residential project, in Cairo challenged.

A wave of copycat lawsuits against local and regional developers challenging the legal status of their land holdings has undermined market confidence heavily, Hasman said.

Closure on several legal cases such as TMG have already been achieved but more needs to be done. "While the authorities have made many attempts to resolve the outstanding disputes with real estate investors, many cases remain open or have witnessed court appeals following verdicts favourable to developers, prolonging legal uncertainties," Hasman said.

The government alone cannot provide the needed housing supply due to limited funding and the private sector must increase its involvement but this requires some reforms, he added.

"The regulatory framework governing real estate investment and land-related transactions should be re-designed in a way that would restore trust between market players and its regulators," Hasman said.

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Publication:Gulf News (United Arab Emirates)
Date:May 31, 2012
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