Gulf rivalry on Egypt’s shores

Gulf money is extending its reach along Egypt’s coastlines—northwards on the Mediterranean Sea and eastwards on the Red Sea—amid an Emirati-Saudi-Qatari struggle to secure the largest share of a valuable prize.

From Ras Al-Hikma to Alam Al-Rum, and from Marassi Red to Ras Gamila, Gulf states are pouring billions of dollars into investments in massive real estate and tourism projects along Egypt’s shores.

Financial and economic experts are divided between supporters and opponents, but questions impose themselves: why is the direction of Gulf investment in Egypt turning towards real estate and tourism projects? What lies behind the Gulf competition for Egypt’s shores? And are there economic risks to the Egyptian economy as a result?

Mega Projects

The UAE took the lead in penetrating Egypt’s North Coast by concluding a massive deal to purchase and develop the city of Ras Al-Hikma in October 2024, valued at $35 billion, with the Emirati Modon Holding appointed as the project’s master developer.

Along similar lines, and some 50 kilometres from the city of Ras Al-Hikma, Aldiar, owned by the sovereign wealth fund Qatar Investment Authority, acquired 5,000 feddans in the Alam Al-Rum area in November last year, for $3.5 billion in cash, in addition to expected investments worth $26.2 billion. Under the deal, the Egyptian government is to receive an in-kind component comprising 400,000 square metres of real estate units, with an estimated value of $1.8 billion, as well as 15 per cent of the project’s net profits, according to statements by Egypt’s Minister of Housing, Sherif El-Sherbiny.

The list of competitors on Egypt’s shores includes an alliance between the Saudi company City Stars and the Emirati firm Emaar Misr to develop the Marassi Red tourism project on the Red Sea coast, with total investments reaching $20 billion, under an agreement signed with the Egyptian government in September last year.

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Competitors are awaiting a decision on Saudi Arabia’s Ras Gamila deal on the Red Sea, which appears to be stalled due to the low value of the Saudi offer, the lack of agreement between the two sides over the financial terms, and Cairo’s refusal to sell outright without securing future returns.

The package of Gulf investments from the three countries is approaching the $100 billion mark. It is earmarked for the development of residential, hotel, tourism, commercial and service complexes, as well as entertainment projects, artificial lakes, golf courses and yacht marinas.

Gulf and foreign investors in general aspire to achieve large, rapid and guaranteed returns—something delivered by the real estate and tourism sectors—while other activities such as agriculture and industry are considered slow-yield, high-risk investments, according to economic expert and financial consultant Mohamed Abdel Salam.

Gulf appetite

In economic terms, researcher and academic Ibrahim Al-Masri argues that the UAE, Saudi Arabia and Qatar have targeted what might be described as the most lucrative investments across various Egyptian sectors, such as ports, energy, banking, logistics, medical services, the financial sector and real estate.

Speaking to Middle East Monitor, he adds that the Gulf focus on Egypt’s real estate sector is not driven by political considerations, but by other factors, including the sector’s stability and promise, the size of the market, and its appeal to affluent Egyptians and Gulf nationals, instead of turning to Europe and the United States. This is in addition to climate, pricing and the prime location, all of which make Egypt a preferred destination for this type of investment.

The global real estate consultancy Knight Frank confirms that purchasing property in Egypt attracts the interest of 94 per cent of GCC investors holding more than $1 million in investment assets, and that 68 per cent of GCC nationals are keen to buy a home in Egypt.

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Qataris, at 55 per cent, prefer to purchase property in Egypt for holiday purposes, while Emiratis and Omanis, at 43 per cent and 47 per cent respectively, seek to achieve the same goal for investment reasons.

By contrast, Egyptians view the growing Gulf investments—particularly in the real estate sector—with suspicion and unease, as it is considered one of the least contributory sectors to development compared with industry and technology. This is compounded by the low valuation of such deals, with the price per square metre standing at $140 in Ras Al-Hikma, compared with around $170 in the Alam Al-Rum deal.

Huge gains

Profit considerations loom large, particularly as sales on the North Coast have exceeded 60 per cent of total real estate market sales in Egypt, amounting to around EGP 1.5 trillion in 2024, according to Sheikh Hamad bin Talal Al Thani, Head of Development and Projects for Asia and Africa at the Qatari company Aldiar.

These extraordinary gains have whetted the appetite of Gulf investors, says Mohamed Alabbar, founder and chairman of Emaar Properties: “If we look at our beginnings, we will find that apartment prices were $60,000. Today, some have achieved profits exceeding their real value by five times,” as quoted by CNN.

A second factor behind the flow of Gulf capital to Egypt’s shores is that half of high-net-worth individuals in the Gulf are seeking holiday homes in Egypt, and that the North Coast is among the most buoyant real estate markets in the country, according to a report issued by Knight Frank in September last year.

This financial inflow is driven by an incentive that could ensure its continuity, namely the recent legislative amendments passed by the Egyptian government in mid-2023, which allow non-Egyptians to own property—whether built or undeveloped land—for residential purposes, provided the purchase price is paid in foreign currency.

Egypt hopes to turn its North Coast into a shared tourism gateway with Mediterranean basin countries, and views the Gulf competition between Abu Dhabi, Riyadh and Doha as a valuable opportunity to attract large-scale investments that could help pull it out of its ailing economy, amid rising external borrowing under President Abdel Fattah El-Sisi. External debt climbed to $163.7 billion by the end of September 2025, according to data from the World Bank.

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Potential risks

The devil is in the details. This perhaps sums up the concerns surrounding the expansion of Gulf capital along Egypt’s coastlines and its implications for the country’s national security, amid the growing pace of non-Egyptian ownership of land and property. Fears are also mounting over the potential dominance of certain nationalities—Israeli passport holders, for example—over these areas, through the purchase of large tracts of Egyptian land under the guise of investment, according to a real estate developer who requested anonymity.

In February 2024, the Egyptian president ratified a draft law amending certain provisions of Law No. 143 of 1981 on desert lands, granting foreign investors, for the first time, the right to own desert land in Egypt. However, the timing of the amendment coincided with the circulation of Israeli plans to displace Gaza’s population towards Sinai, in addition to the fact that the amendment was not accompanied by any safeguards—for example, excluding Israeli nationals from ownership or restricting it to specific areas.

In June last year, President Abdel Fattah El-Sisi issued a decree allocating a plot of land measuring 174 million square metres from state-owned private property in the Red Sea governorate to the Ministry of Finance. The land is to be used to reduce the state’s public debt and to issue sovereign sukuk backed by it domestically.

Opponents say that the El-Sisi regime relies on the sale of assets as a temporary solution to the escalating debt crisis. The Egyptian Ministry of Finance, however, said in a statement that the aim is to reduce government indebtedness, stimulate the economy and enhance competitiveness, stressing that allocating the land in question to the ministry does not mean selling it or relinquishing ownership.

The Gulf rivalry remains intense along Egypt’s coastlines, driven by considerations of money, political influence and other aims. At the same time, concerns persist, and warnings remain serious amid an environment marked by a lack of transparency, secrecy surrounding the identity of investors, the true value of the land, contractual terms and deal clauses, as well as the conclusion of contracts through direct-award arrangements. These are pivotal issues that undermine the credibility of buying and selling processes and raise doubts about their viability and future returns for the Egyptian economy.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.