Corruption claims lock down egyptian property market

Egypt's property market has all but ground to a halt as the office of the public prosecutor has become swamped with complaints and allegations of corruption connected to land deals.

"Everyone is acting differently now," said Hisham Gaafar, a prosecutor at the office. "They are not afraid now. Many of the reports are connected to important people." Total complaints have tripled to about 3,000 so far this year, many of which are about land deals.

Many of the complaints Mr Gaafar receives may never make it to the courts because of a lack of evidence, but they are a real threat to investors from Egypt and beyond who have put their money in the booming property market. In cases where the court has found a transaction was inappropriate, judgments are being made to rescind the deal completely.

Companies such as Emaar Properties, the Middle East's largest developer, have invested heavily in Egypt's property sector to take advantage of the rising demand for homes in a country where custom requires a young man proposing marriage comes backed with a property deed. Other major Gulf players that have set up there in recent years include Majid Al Futtaim Group and Damac Properties from Dubai, and Qatari Diar.

While cases have not emerged publicly with projects from those developers, Al Dahra Agricultural Company, based in the UAE, has already felt the swift judgment of an Egyptian court. An administrative court ruled that its purchase of 100,000 feddans (43,000 hectares) from the government was against the law because the land was not auctioned at market prices.

Source: The National