Palm Hills Developments has hired Orascom Construction Industries to build a US$93 million (Dh341.56m) residential complex outside Cairo, its first project in a partnership with Abu Dhabi's Burooj Properties.
Village Gardens Katameya covers 285,600 square metres in east Cairo, near the American University.
Burooj, the property investment arm of Abu Dhabi Islamic Bank, has already purchased 425 units in the complex, with a total value of 286m Egyptian pounds (Dh175.4m).
There is strong demand in Egypt for modern and luxury homes, "particularly among Egyptians living in the UAE and other GCC countries", said Adel Ahmed Al Zarouni, the managing director of Burooj.
The company's projects in the UAE include Al Qurm Gardens, a collection of 80 villas near the Al Bateen Airport in Abu Dhabi, and Burooj Views, a 39-storey residential tower on Reem Island.
Burooj and Palm Hills announced a partnership in April last year, as Burooj moved to diversify its portfolio outside the slumping UAE market.
Despite the turmoil this year, Egypt is viewed as one of the largest growth countries in the region for developers.
Egypt "provides the greatest potential opportunity for the development industry with a current need for an additional 1.5 million affordable housing units across the country," the property consultancy Jones Lang LaSalle concluded in a recent report.
But most of the property development has focused on luxury buyers and there has been "very limited involvement" of expatriates or foreign buyers, Jones Lang LaSalle reports.
More than 80 per cent of Egyptian households earn less than $340 a month, the consultancy reported. And mortgage financing is expensive and difficult to find for most potential buyers.
Burooj hopes to help Palm Hills, one of Egypt's largest developers, to expand its client base to reach Egyptian expatriates throughout the GCC projects, the company said in a statement last year. Abu Dhabi Islamic Bank will offer mortgages.
Burooj projects typically target "middle income" buyers. A two-bedroom flat in Village Gardens Katameya is advertised for 696,000 Egyptian pounds. Palm Hills has faced accusations it illegally purchased land under the administration of Hosni Mubarak. But the Village Gardens Katameya project has not been affected.
Palm Hills reported a 17.7m pound net loss for the third quarter, compared to a 153.7m pound net profit in the same period last year.
