Front Line or no Front Line - is that the question?

Well its the front line question that we hear a lot about and on the face of it the answer is simple, front line. or is it? Before examining the issues my I recommend to check whether it really is front line. Without putting too fine a point on it, I have inspected sites which are called front line and they are not really. They have a road in front of them and then the beach.

Google Earth can help on this, but nothing beats a site visit to be sure.

This may be ok if you are sure there will not be anything built the other side .. but usually there is, or will be a building, so its not front line. The clue can often be spotted in the price… if it seems good value compared to the other front line developments then maybe there is something not right. It could be beach front line but there could be an electricity station next to it.. or a factory.

But is it all about a beach? Well frankly not in some resorts being close to the amenities of shops and restaurants may be highly desireable and then you have to apply town centre versus outskirts argument. All of a sudden its getting more complicated. Then of course you have to look at price. Jet2Let have Tranquilla Town a nine story refurbishment buy to let building in Hurghada town centre. With an expected rental of £400 per week on six or 12 month contracts you are looking at after management costs a pretty certain yield of 8%. This is th sort of deal that suits the non lifestyle buyers who views overseas property as a long term investment proposition and has little intention to visit -or is their second purchase in the country.

I will leave it to another time to talk about investment strategies, but those who invest in shares will be familiar with taking contrarion view. I like this view as it can often work well. Historically those with patience almost always are glad they were brave by buying whilst all around said that price will go continue to go lower and lower.

For example of a typical contrarion view right now would be buying several banking shares at these low prices because the credit squeeze will reduce competition and Banks will be set to restore their balance sheets after their rights issues. Enough of stock markets but the contrarion view is worth thinking about now that overseas property sales have slowed the current deal could well turn out to be very shrewd buys indeed.

Spo turning again to property, in most markets we have see price inflation on building materials (cement, steel) and in some of the emerging countries labour costs increasing significantly. I am also interested as to what local buyers are doing and why. The great thing at the moment is that the squeeze on mortgages means that the speculative element is much reduced - so look for where people are moving to - where are they needing to rent? Possibilities here are Istanbul with a huge population increase under way and even Hurghada in Egypt where a new population is moving to the coast for more than just tourist related activities.

Egypt’s growth in tourism is such that local workers accommodation which include expats in real estate and tourism and Egyptian professionals covering legal, construction and media sectors. This is why we have secured a great deal on an existing building which already has tennants. Prices of £410 and £570 per m2 is really good value with minimal risk as the building is already built as of ten years ago and an after fees and costs yield of 8% means this is the sort of deal to be had there right now.

Please post your views on front line and taking a contrarion view.

Tranquilla Town - Hurghada’s first pure domestic buy2let

We regard Egypt as offering superior ‘relative value’ to the international property
investor for a number of reasons:

• With strong economic fundamentals and political and economic reform well-underway, long term prospects for the economy are very good. The Government has streamlined the property ownership process for overseas investors and is actively seeking inward investment, thus providing favourable conditions now for property investment by foreign nationals.

Wider availability of mortgages for foreigners (which carry 0% tax on interest) will add liquidity to the market, and there is no inheritance, income or capital gains tax for overseas investors in Egypt. Furthermore, investment entry points are low and projected yields are high.

• Egypt is at the beginning of an expansionary cycle, in contrast to many property investment markets. In Spain, for example prices, on the coastal regions have been falling****, while Florida has been hit-hard by the recent ‘credit crunch’*****. Property markets in other less established
areas eg Dubai, Bulgaria, Croatia have already attracted significant foreign investment, so investors seeking aggressive capital growth opportunities are looking further afield. As well as the obvious buoyancy of the underlying economy in Egypt, the fact that the country has historically under-exploited its role as a major tourism centre suggests there is substantial value currently in Egyptian real estate related to the tourist markets. Growth in European tourist traffic will have the effect of driving short-term rents (and therefore yields) higher. This effect is likely to be particularly pronounced in the Red Sea Region, where there are plans for
a major new international airport at Ain Soukhna.

• Indeed, Egypt’s year round sunshine, relative proximity to Europe, low crime rate and rapidly improving infrastructure will in our view see it emerge as one of the world’s major tourist destinations over the next few years. Finally, we feel property prices in Egypt should benefit from petro-dollars: Gulf investors (who often have a preference for assets in the Middle East) are increasingly likely to be attracted to Egypt’s strong fundamentals, and the fact it welcomes foreign investment.

* International Monetary Fund Statistics, 2006
** International Monetary Fund Statistics, 2006
*** International Monetary Fund Statistics, 2006
**** Financial Times, 30-09-07
***** Financial Times 30-09-07

The Deal:

Its always good to be first with an offer that is very much in the vain of buy2let or, as I would say, “jet2let” investment. With prices from just £26,000 up to £52,000 you can invest in an existing building which will be refurbished. This suits many who do not want to be concerned about the financil viability of a builder or developer.

Tranquilla Town is on Sheraton Street right where the fast growing numbers of local workers wish to live. This population is growing fast with the growth in tourism in Hurghada and also the growth in general business activities. Lawyers, accountants, doctors from Cairo and Luxor are in need of accommodation in this area.

In addition there are those involved in the Hotel and Hospitality industry and of course the huge diving and boat trip industry. Final there are those expatriates involved in the fast growing real estate industry who need accommodation. Sales people from UK, Germany, Russia, Italy and elsewhere. All of these people arriving have pushed up property prices and rentals.

All monies held in escrow account at UK lawyers until title transfer. You pay 90% of the price and get title. The final 10% is paid when the refurbishment is complete (within 6 months).

All you need to buy is appliances and furniture and packs will be offered for around £2,500.

Just £1,000 refundable reservation fee will reserve your unit in this building of 53 apartments.

For further details on Tranquilla Town contact Jet2Let Property Ltd
Tel: 0044(0)113 3131000

Samra Bay, Hurghada

Samra Bay will be one of the very best developments in new Hurghada and will be launched off plan in June. Located by the Grand Plaza, Intercontinental, Hilton and Steigenberger hotels the position is superb. Located on the beach front line and on the Esplanade pedestrianised area this area feels upmarket feel and very safe/

Many restaurants are springing up here as well as shops of all kinds. Frontline is getting scarce in Hurghada and we expect demand will be very high for Samra Bay as the developer finishes to a very high standard. There will be over 1,000 apartments and we therefore expect rental potential to be one of the best as it has only 5 star hotel as competition.

Viewing Trip Just £225 per person. Call 0044(0)113 3131000 to book now. In case you cant make it please see video of the site which will have a jetty for boats and safe swimming area.

El Gouna, Hurghada, Sahl Hasheesh - What are the differences?

Gamsha Bay: Starting about one hour to the North of Hurghada Airport we have the site of Gamsha Bay project. Over 50,000 units proposed from Damac, 3 marinas, four golf courses, Sports areas, Hotels etc. Full details will be on web site soon but earlier registration will get the pick of the units.

El Gouna: About 25 minutes from Hurghada airport, this is fully operational with an impressive marina full with many £20m + boats (see picture left). Excellent restaurants and shops line the promenade around the marina. See picture above. Large 420m2 villas and very high quality apartments are now available through us. Price includes your own exterior and interior design service. The area is high security and gives a stress free area to relax without street sellers. This area gives a taste as to how Sahl Hasheesh will take shape.

South of El Gouna to Old Hurghada: Here is perfect beach front property territory with new hotels and apartments. A very large Carrefour supermarket is planned here. We have Hania Beach (front line), Orange Beach (front line, yet to be launched). and Pearl Vista (second line).

Old Hurghada: Real taste of Egypt territory with Sheraton street and its clubs, bars and vibrant shopping (see left). This is where tourism started and is thriving now. New marina already open with expensive new yachts moored.

New Hurghada: The Esplanade (Village Road) is impressive (see below) with a quieter feel and more relaxed pace than Old Hurghada. Like everywhere here, it feels very secure and with an ever growing mix of restaurants (Thai Garden, Hard Rock Cafe, Pizza Hut and traditional Egyptian) and the world class Little Buddha Restarant and Club, this is the place to enjoy a pre or post dinner stroll. Front Line property here is getting pricey as there is so little space left. We will have soon in pre launch Samra Bay (1,200 units 170,000 m2) from Orbit - where I saw the very high level of finish in Sahl Hasheesh. More info on this including video available on request.

Here we also have town developments of Lotus Breeze, Desert Pearl 1 (SOLD OUT), Desert Pearl 2, and Coral Sea Pearl, two minutes walk to the main town area. The new Zina Heights right on the Esplanade just in pre launch and West Side again right in the centre of town. For superb value we have Centre Residency 2 bedrooms from just £27,000.

Megawish:

Just a little further south we have the megawish area. Here we have Egyptian Pearl (second line).

Sahl Hasheesh:
This grand project by ERC will consist of 17 five star hotels and 12 four star. Three golf courses in three zones. Zone one course to be finished in June 2009. Already its taking shape and front line villas and apartments selling fast. Prices rising now that the Norman Foster and Partners’ 7 star Serenia Resort and Marina construction has started.

Ocean Breeze in Phase 3 is now well under way but still some excellent villas and apartments available. Highly Recommended. Also we have front line developments of El Andalous and Palm Beach Piazza (see pool view left). Sunset Pearl and Red Sea Pearl have golf and sea views. All in Zone One.

See picture of Ocean Breeze under construction:

Dolphins off Hurghada Coast, Red Sea - a regular sighting:

Special Offer: Just Released - Hurghada Desert Pearl 1 - built and ready to rent

New special offer in today. Desert Pearl 1 (see real photos on this page) Excellent apartments in a just completed development with swimming pool. 24 hour security. close to beach and the New Hurghada promenade with its shops and restaurants. All year round rental income.

These apartments are contracted in UK pounds - so no currency risk.

C004 2 Bed DP1C004 Price £46,035

C302 StudioDP1C302 Price £19,800

C401 2 Bed DP1C401 Price £46,035

D303 StudioDP1D303 Price £19,800

F005 1 Bed DP1F005 Price £25,495

F305 1 Bed DP1F305 Price £25,495

F404 Studio DP1F404 Price £21,780

G106 Studio DP1G106 Price £19,800

H203 Studio DP1H203 Price £19,800

I204 Studio DP1I204 Price £19,800

J003 2 Bed DP1J003 Price £32,495

J004 2 Bed DP1J004 Price £32,495

go to www.jet2letproperty.com to view plans. 10% refundable reservation fee.

Call for Egypt buyers guide and for £225 per person one week viewing trips to see a large selection of Egypt property

Egpyt - Hurghada - Sahl Hasheesh

Recently got back from Red Sea Riviera, Hurghada, Sahl Hashesh, Gamsha Bay inspecting sites of new properties we are marketing.

What struck me was how full the hotels were. For those that have not seen the area it offers year round sunshine, famous scuba diving, golf and many 5 star luxury hotels.

Like all new foreign destinations, I know some folks may have some apprehensions about traveling to Egypt, but the image you may have of Cairo of street hassle is not the reality here on the coast. I felt very safe indeed here. I was also impressed with the money they have spent on the infrastructure before the property is built. New roads, paving and lighting are in, one new huge shopping mall coming up for completion and

One can see why, Hurghada under 5 hours flight from UK and only 10 minutes from Hurghada airport is booming. New wide promenade pavement has been completed whereby a stroll in the evening enables good people watching and opportunity to select a retaurant. All sorts are here and I was impressed with the Thai restaurant and the sushi in the Little Buddha Bar restaurant and night club

Over 20% of the tourists were from Russian or Russian speaking countries with many sign in the Russian alphabet - familiar territory for those who have been to Bulgaria. The Russians are the biggest spenders.

The popularity extended to visitors from Germany, Italy, Scandanavia, UK and Ireland. It was not hard to see why with last minute bargains from the UK of just £425 including flight and fully inclusive hotel. This is stunning value - at double the price Egypt is still very good value.

One of the real attractions here, apart from the price and 365 days of sun, is the quality of service from the Egyptians. My impression here was very positive the Egyptians are almost always polite and friendly and, when you engaged in conversation, they were often very well educated. All in the tourism trade speak English.

So if buying here where should I buy? Well if you want to be a few minutes from the main new bar and restaurant area, then Coral Sea Pearl (or Coral Pearl) is perfectly located. The Desert Pearl 1 which is just about complete (plants are in and snagging underway) showed the build quality with superb 2.9m extra high ceilings, swimming pool and roof terrace with views of the sea. Prices here are from £17,500 for a studio up to £55,000 for a 3 bedroom apartment. This is superb property value and will make perfect sense for many buyers. All prices are in pounds so these are even better value with the weak pound at time of writing compared to euro priced properties.

On to Sahl Hasheesh (or Sahl Hashesh), this new exclusive area is still under construction but the main and very attractive waterfront promenade and huge piazza are nearly finished. The intention here is of an up market destination. Three golf courses are under construction - well I could see two that were well underway the third did not inspect.

Already there is one hotel working and the new scuba diving “The Sunken City” is a recreation of “The City of Isis” a main port that expanded for 2,000 years until it sank and became a key under water attraction. In the bay of Sahl Haseesh divers can explore the ruins of ancient civilisations. Sadly did not have time to test this out but Jeff (an ex dive master) told me its good and not naff as it may sound. Nor did i have time to windsurf or have another go at kitesurfing, deep sea fishing or sailing. However I did get on a very pleasant boat trip moored off Giftun island and went snorkeling in the 25 degrees sea - not bad for the 9th March!

Property in Sahl Hasheesh is more expensive but still excellent value considering that this really is a premium area like El Gouna to the north. So Sunset Pearl there are studios from just £30,000 up to three bedroom apartments around £90,000. This is stunning value and those who know Spain would agree. Here you get golf course AND sea view. Same goes for Red Sea Pearl and Isis Pearl just by Sunset Pearl. Sunset Pearl finishes December 2008 and work on the interiors is now starting. The Pearl of Sahl Hasheesh has mainly golf course views, a little cheaper and will incorporate a Lee Sharp football academy. Here the villas at £275,000 will be excellent investments as similar villas in El Gouna are selling now for in excess of £600,000. So I liked the scarcity value in Sahl Hasheesh and this will probably make the area one of the best to buy into.

So is this area a serious contender on the international stage of exclusive developments? Well I think so, with the Norman Foster and Partners exclusive “Serrenia” this 3 billion dollar waterside development and marina just has to be seen to be believed (well on the internet its a site at the moment). Property here is in the millions. In addition we will be launching Damac (the Middle East’s largest private sector luxury developer) the new 10 million m2 Gamsha Bay.

So my conclusion Egypt is the major new property hot spot, buy here soon and not only will you have a holiday or retirement home but a sound investment not least because of the huge buying interest from Russian property investors who so often now drive prices upwards. The zero Egyptian capital gains or inheritance tax and zero VAT is the icing on what is now a becoming a very appealing cake.