HC Securities issued an update on the Egyptian real estate sector, highlighting the performance of Orascom Development Egypt and indicating its ability to enhance shareholder value, supported by tourism revenues and the revaluation of Red Sea land assets.
The analysis noted that 2026 may present challenges for the residential segment due to higher unit prices, weaker purchasing power, and increased supply following heavy buying cycles between 2023 and 2025, with demand not expected to recover before the second half of the year.
In contrast, HC believes that companies with hospitality investments will be better positioned to withstand any slowdown in residential activity, especially as the government focuses on increasing tourism revenues and expanding hotel capacity.
Estimates indicate that Orascom Development’s hospitality segment could record revenue growth of about 20% over four years, with an average gross margin of around 36% between 2025 and 2029, supported by expected occupancy rates of up to 75% in El Gouna and 40% in Taba Heights.
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Sector research highlights the importance of diversified revenue streams within real estate companies, particularly as demand cycles shift between residential and hospitality activities. Tourism-related segments play a key role in supporting stable cash flows during periods of residential slowdown.