Egypt’s $21bn project to rival Europe’s top holiday destinations

Cairo-based Talaat Moustafa Group (TMG) is investing $21 billion to develop a new tourism project on Egypt’s Mediterranean coast to compete with Europe.

Named SouthMed, the development will cover 23 million square metres and is expected to generate sales of $35 billion, Reuters reported, citing CEO Hisham Talaat Moustafa.

Initial bookings reached EGP60 billion ($1.25 billion) in 12 hours of pre-launch sales, TMG said in a filing to the Egyptian stock exchange on Tuesday.

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The SouthMed project is being developed to rival the most luxurious international destinations in the northern Mediterranean, such as the beaches of southern France, Italy, Spain and Greece.

The government has strategically shifted its focus towards major tourist, entertainment and service attractions to maximise returns and unlock significant new opportunities by developing areas such as the Ras El Hekma and SouthMed projects, the statement said.

The new project will include residential, retail, restaurants, golf courses and entertainment facilities, the developer said on its website.

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The project aligns with Egypt’s mega plan to develop the north coast with the aim to double the number of tourists, Egypt Today newspaper reported, citing prime minister Mostafa Madbouly.

Egypt in February signed a deal with ADQ, an Abu Dhabi sovereign wealth fund, to build the “largest new city” in Egypt to promote tourism and drive economic growth.

In May Egyptian housing minister Assem El Gazzar said ADQ would begin building the infrastructure for its Ras El Hekma development on the country’s north coast before the end of this year.

In January, ADQ and Abu Dhabi-based ADNEC Group signed deals to acquire a 40.5 percent stake in TMG Holding’s hospitality arm, ICON Group, through a capital increase.

ADQ and ADNEC agreed to invest through a special purpose vehicle, with 49 percent equity ownership by ADQ and 51 percent equity ownership by ADNEC.