COOWNED Property, The Future of Real Estate Investment
Updated 1/31/2023 1:19:00 PM
Arab Finance: Properties are meant to be valuable assets that have a substantial financial return. That is why property and real estate management are becoming needed businesses in Egypt because who would not like his property to be finished, furnished, and managed with a good return?
We interview Andrew Ashraf, CEO and founder of Al Safeer Group Egypt, and Co-founder of COOWNED for Investment Properties, and Naqar Furniture about the companies and property management industry in Egypt.
Would you mind explaining to our readers why Al Safeer Group decided to invest in the property management industry?
In general, Egypt experiences a problem with having an inventory that is accessible to all owners and developers. Real estate in Egypt is a sort of investment with a very high inventory, therefore, if the owner leases it out without finishing the apartment or furnishing it, it is often expected to return 3% of the purchase price annually. Property management increases this simple return by approximately 7-10% per year. We considered how we might contribute to this industry. After working for 8 years on furnishing, designing, and finishing; the team chose to focus on property management to give itself a competitive edge. We studied the successful businesses working in property management and hotels in Egypt and abroad, and we started our brand with certain standard operating procedures (SOP). Furthermore, given the current inflation in Egypt, the property management industry is crucial. So, we took part in COOWNED for Investment Properties.
Do you think co-owned property can change the real estate market in Egypt? Why is it needed now?
With the recent substantial increase in prices, if a customer has a million pounds, it is going to be very hard for him to buy a property alone with this amount that could get him a profit as an asset. He will only be preserving the capital. Moreover, the price of the property itself might decrease because of the drastic climate changes happening in Egypt now. With all of these changes in the property market, Egyptian customers are looking for better investment opportunities in property.
Could you walk us through the user experience and explain how you make sure that customers' reservations do not conflict with one another? And how do you manage customers’ shares?
COOWNED for Investment Properties is a limited liability company. We offer ready-to-host units that are finished and furnished. The unit is provided with the latest technologies to reduce operating costs and also to reduce the number of staff needed. The system in COOWNED is divided into two parts: the vacation, which allows the customer to enjoy his unit by himself, and the lease, which allows the customer to rent his share of the unit and get a financial return through our platform. The unit can be owned by a minimum of 2 people and a maximum of 8 people, and customers can either live in it or rent it. The sequence is very simple. The year is 365 days divided by 8, so each person gets 41 days. Our system ensures that all 8 owners receive days during weekends and high season, ensuring that they all benefit equally from the unit.
As a property management firm, we do annual maintenance and oversee the investment process, making it very simple for the client to sell his interest in the unit if he so chooses. We are able to sell the share within three months, and the customer receives the return on his investment (ROI) for the unit. For our clients, we also oversee the leasing procedure.
Can you share with us the Group’s performance in numbers? What is your annual growth?
Al Safeer Group Egypt's growth overall last year was 120%. The annual growth for COOWNED for Investment Properties was 70% last year. We too were surprised by the numbers. We did not anticipate being able to satisfy customers' needs so quickly.
What businesses does Al Safeer Group Egypt collaborate with? What are the profitable areas that your firm is investing in, in terms of demographics?
We have a large set of businesses, including COOWNED for Investment Properties, Casa Cozy Hotels for hotel management, and Naqar for furniture and design. Our group completes, creates, and furnishes the units, which are offered for sale as co-owned shares. We have seven locations, including Soma Bay, Sahel Hashish, Zayed, and New Cairo. Due to its popularity with tourists, the Red Sea region is the most profitable.
So, do you think co-owned property is attractive to expats? And can you share with us the number of expatriate reservations in your Group?
This sector can encourage more foreign visitors to visit and stay in Egypt, as low inflation rates make everything cheaper. Booking Company data showed that more than 50% of foreigners’ reservations made through the application were in boutique hotels, apartments, and co-owned properties and not chain hotels. Taking this percentage into consideration shows the emergence of this sector in Egypt.
More than 60% of the reservations and purchases in Casa Cozy, our brand company for property management, are made by expatriates, and as for COOWNED Investment, around the same percentage is rented or purchased by expatriates.
What are your expansion plans for the New Year?
We are studying to invest in areas like Maser el Gedida, Downtown, and Mohandessen. Mainly, we are trying to choose the areas that are attractive to tourists. However, we are still studying this step because property in those places is old and very expensive.
Al Safeer's Group Egypt fruiting company, Naqar Furniture, is an exporter. Can you share with us the success story of the company?
The company started in 2017 with a goal of exporting furniture. We export to Gulf countries. Furthermore, what differentiates Naqar Furniture is that it has the approval of the European Union, is already exported to a number of European countries, and is 100% made in Egypt. We use Naqar furniture in our units, and it increases the rate of the units. Naqar is also proud of the Egyptian identity reflected in its designs. Many businesses forget to market the Egyptian soul in their designs and furniture, but I think this is what makes us unique.
When we started at Naqar Furniture, we modelled Italian brands so that we could compete in the market. Then, we started adding our Egyptian identity to the products, such as by borrowing some Pharaonic designs, and customers liked those designs. We were able to compete with attractive, high-end, and cost-effective designs. Egypt exports furniture worth around half a billion dollars. Furniture is one of the industries that can help develop countries’ economies, and Turkey is a good example of that. So, this industry deserves more attention from the media and investors.
Due to your creation of the hashtag "Job Ambassador," you are a well-known influencer. Can you tell us how COVID-19 and inflation have impacted employment and job openings?
The employment rate has dropped by about 20%. There are open positions, but the abilities of recent grads fall short of what employers actually require. In some cases, employers don't even know what they're looking for in candidates. I act as a middleman between the two as a content developer. The current economic situation and inflation make it difficult for businesses to pay high salaries. Additionally, today's typical incomes do not provide for a respectable standard of living. Finding creative and affable people, in my opinion, can help close this gap.
In the meanwhile, Egypt's rising inflation may be advantageous since it will draw in foreign businesses looking for bargains. In comparison to other countries, salaries and the cost of beginning a business will be lower here. Competition will be high and jobs will be readily accessible if this occurs.
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