What is the "real estate stock market"? How do you add to the Egyptian market?

The Egyptian state is moving forward in many directions aimed at opening new investment horizons and developing tools through which more investments will be made available in various sectors, including the real estate sector, which is one of the main sectors.

The latest of these measures is what the Egyptian government recently announced regarding the establishment of a real estate fund, in addition to real estate trading on the Egyptian Stock Exchange and the economic impact of what is known as the “real estate stock exchange” and its role in enhancing the role of the sector.

What is the real estate stock market?

 How can it add to the Egyptian market? What role can it play in the real estate export file as a mechanism for providing foreign exchange?

Real estate stock exchange

1. A real estate stock exchange is a financial market in which real estate is traded - in concept - in a manner similar to the trading of stocks and bonds on traditional stock exchanges.

2. The real estate stock exchange aims to provide a way for investors to buy and sell real estate easily and transparently. These traded properties usually include commercial, residential, industrial and other properties.

3. The real estate stock exchange is usually tightly regulated, and under the supervision of regulatory bodies and bodies to ensure the integrity of operations and protect the rights of investors.

4. Traded real estate is collected into real estate investment funds or investment units and tradable real estate documents, and investors buy units in these funds or units and are entitled to benefit from real estate income and appreciation in value.

5. The real estate stock market is also considered a way to diversify the investment portfolio by taking advantage of return opportunities from real estate without the need to purchase actual real estate directly.

6. This exchange allows for reducing some of the risks associated with investing in real estate by offering greater liquidity and achieving broader diversification in the pool of real estate invested in it.

7. Egypt is working to benefit from these advantages provided by “real estate stock exchanges” as part of a set of measures aimed at developing the sector.

Government actions

In August 2023, the Egyptian Prime Minister, Dr. Mostafa Madbouly, announced a series of measures within the Egyptian state’s steps in the real estate export file, specifying a set of mechanisms with the aim of revitalizing the sector, including:

- Establishing a real estate fund, from administrative and commercial assets that generate income.

- The proposal to trade real estate on the Egyptian Stock Exchange, and the economic impact of the idea of establishing the real estate stock exchange, which will represent a platform that enables investors and real estate companies to buy and sell shares in real estate assets, and invest in them, so that they complement traditional real estate markets, and provide opportunities for real-time trading and the most liquid investment in Real estate sector.

At that time, the Chairman of the Egyptian Stock Exchange, Ahmed Al-Sheikh, revealed that work is underway to complete the legislative and regulatory framework for the real estate stock exchange, which aims to:

- Playing an effective role in further organizing the trading of real estate shares.

- Enhancing the capital market’s contribution to accelerating the pace of growth of the real estate sector and its related sectors.