JLL reveals that “global transactions are up 55 per cent year on year”August 25, 2015 3:40
Egyptian lawyer contests EGTS land deal
Suit seeks to annul 41 mln square meter land purchase.
October 29, 2010 2:45 by Reuters
An Egyptian lawyer has filed suit against Egypt’s prime minister and tourism minister challenging a deal with real estate firm Egyptian Resorts, the latest attack on state land sales without an auction.
The lawyer — Shehata Mohamed Shehata, who also raised another suit challenging a land deal involving Cairo-based private equity firm Egypt Kuwait Holding alleges the firm got the land in the absence of competing bids.
The suit says the government violated the law by selling a 41 million square meter plot to Egyptian Resorts for its Sahl Hasheesh resort on the Red Sea, according to a court document seen by Reuters on Friday. No hearing date has been set yet.
Company officials were not immediately available for comment.
Investors have been unnerved by a spate of suits challenging land purchases that could potentially slow property investments in Egypt.
Talaat Moustafa Group , Egypt’s biggest listed developer, has been mired in a row over its flagship $3 billion Madinaty project since a court ruled that the contract was illegal.
The government has said it will uphold that ruling and cancel the deal but said it had the right to draw up a new contract selling the land back to the firm because it was in the public interest.
While the government’s response to the TMG case has quelled some investor worries, it has not stopped new claims.
Another suit challenges a state land deal with Palm Hills Development , Egypt’s second-biggest listed developer. A court postponed until Nov. 9 the hearing in that case.
The cases hinge on conflicting laws governing state land deals. The original court ruling said a Housing Ministry body sold land to TMG in violation of a 1998 law. The government said it was following legislation that preceded the 1998 law.
Analysts and real estate executives have called for a long-term solution which will require a new law. But pushing through legislation has been delayed by parliamentary elections looming on Nov. 28. Parliament reconvenes on Dec. 13.
The cabinet has already drafted a new legal framework for state land deals that aims to ease investment, oversee the sale and use of state land, and remove disputes between state bodies over land deals, a spokesman said last week.
Egyptian Resorts, which makes most of its money selling land to developers, has not sold any plots since the third quarter of 2008, when the global financial crisis dampened appetite for big real estate purchases in Egypt.
The firm’s net profit slumped more than 90 percent in the first six months of 2010.
(Editing by Michael Shields)