What’s in store for the digital real estate sector in Egypt?
Real estate is a safe haven for Egyptian investors, a circumstance that helps explain the success of Aqarmap, a real estate search engine that allows users to advertise their plots for sale or rent.
Or Nozol launched a real estate CRM application called Nozol Business in May.
Although the Egyptian economy is unstable, prices are rising and the value of the Egyptian pound is in decline, n the real estate sector opinions are split between those who expect renewed development and those who anticipate recession.
Nonetheless, it seems that things are taking a turn for the better.
The best indication of this optimism comes in the form of media statements made by construction and real estate analyst Habiba Hegab from Beltone Financial.
“The top three real estate companies in the country - Talaat Moustafa Group, SODIC and Palm Hills - have registered an increase in demand since the 2011 revolution,” Hegab said.
Aqarmap capitalizes on the Egyptian market
Amad Masoudi, of Yemeni origins, established Aqarmap in Egypt in 2011 immediately after the January revolution.
He had come to Egypt from the United States determined to launch a project in the real estate or automobile business. He settled on real estate after “closely examining the Egyptian market and seeing continuous growth in the real estate sector”, he said in an interview with Wamda.
Masoudi was able to get investments (details were not disclosed) from businessman Fadi Ghandour, three Yemeni investors, and the risk capital company N2V.
“According to numerous studies, 60 percent of transactions in the Egyptian real estate sector are for residential purposes while the rest are for investment,” said real estate expert Abdul Hamid Gado.
“Real estate investment in Egypt still attracts both nationals and foreigners as it is directly proportional to the decline in the value of the local currency compared with the dollar."
However, Gado expressed concern that an excess of real estate projects in Egypt might flood the market, which would then lead to recession. This remains unlikely due to the increase in demand.
Furthermore, and despite the political and economic difficulties the country is facing, the real estate sector is still relatively safe in Egypt, according to some analysts, and has shown resilience and an ability to adapt to problems.
Development of Aqarmap
After its launch, Aqarmap took two years to build a user database that would enable it to obtain a clear indication of supply and demand in the Egyptian market.
By 2013, the company had launched the service Aqarmap Genie as a real estate assessment tool. The service allows users to know the price of a square meter in residential units after recording the unit’s data and taking into consideration factors such as surface, finishing and views. During the same year, it launched a mobile app for Android and iOS.
The project expanded even further in 2014 to reach Saudi Arabia but hasn’t been able to take the lead in the country due to successful competitors, mainly Lamudi, e-Semsar and Aqar.
Throughout his journey, Masoudi has based his business on a model that generates income from advertisements published by users (companies and individuals) about their real estate units. Prices for these advertisements vary between 100 and 400 EGP (US$10 - 40) for individuals while the pricing for companies depends on the size of the project.
Aqarmap started making profits in 2013 and currently has one million registered users, 50,000 daily visitors and a team of 60 employees.
The site’s algorithm registers supply and demand on a daily basis as well as price ranges per region. Aqarmap administrators receive internal statistics enabled by the recent launch of a digital real estate guide containing price ranges in each region and the possibility of conducting electronic assessments.
The service operates by feeding the system with information on transport, universities, malls and shops in each region. The user wishing to make a purchase is also provided with information on average prices for the current year and a growth rate in comparison with the previous year. An assessment is given in percentage for each factor.
As for sellers, companies or individuals, they can use the Aqarmap guide to determine the prices of a square meter according to each region, which would help them better anticipate revenues.
The guide’s fault however is that it depends on only internal statistics. “In order to get information that is 100 percent correct, we need clear data on the real estate sector from the Egyptian government. This is currently not available,” Masoudi said.
“If we consider that 40 million Egyptians use the internet and that 10 percent of them only are interested in real estate, we get four million people who are searching for real estate online every day and 1.5 million of them visit Aqarmap’s website every month. This means we have more than 30 percent of the market share,” he added.
“This enables us to provide accurate data, especially when considering that our database is five years old. This means we are capable of monitoring changes in the market.”
Nozol’s CRM real estate application
Perhaps the limited data available concerning the Egyptian real estate sector was the primary incentive behind the launch of Nozol’s customer relations management (CRM) application for the real estate sector.
“The application is designed for development companies and real estate marketing companies and each benefits from a separate system. We have plans to link the two systems in the future and to connect them to users in order to complete the transactions cycle in the real estate sector,” said Ahmed Farahat, technical director at Nozol.
The system allows marketing companies to manage sales operations by registering new clients, measuring leads, managing complaints and suggestions, and communicating with clients through email and text messages.
It allows development companies to do all of the above in addition to notifying clients of payments and calculating commissions for brokers.
The application is based on subscriptions that cost $15 per user, per company.
“Even though we accept monthly payments, the 24 companies we’ve so far dealt with have preferred to make advance payments for six months or a year, which has guaranteed us 25 percent of our expenditures in the form of revenues,” said Nozol CEO Ahmed Ezzat.
As for any scaling plans, Nozol continues to contact investors in order to attract risk capital. Last July, it was awarded first place in the 11th Start IT program organized by the Technology Innovation and Entrepreneurship Centre (TIEC).
Feature image via Pexels