Why Wealthiest Gulf Powers Like #UAE Are Snapping Up Prime Property in Egypt - Bloomberg

Why Wealthiest Gulf Powers Like UAE Are Snapping Up Prime Property in Egypt - Bloomberg

On a sweltering late-summer evening last year in southern Egypt, the country’s most storied hotel was bustling once again, hosting personalities with ambitions of shaping the world. In the more than a century since it opened, Aswan’s Old Cataract, perched on a rocky outcrop on the Nile River’s eastern bank, has welcomed the likes of Winston Churchill, Jimmy Carter and Tsar Nicholas II. For Agatha Christie, in whose former suite you can now stay for upwards of $8,000 a night, it was the inspiration for one of her most famous works of detective fiction, Death on the Nile.

The guests were more circumspect. More than a dozen high-level officials from the United Arab Emirates wearing flowing white robes arrived for a private dinner, led by a security detail that cordoned off the restaurant, according to four people who were there and requested anonymity to discuss a private gathering. Outdoor air-conditioning units were set up on the terrace so the elite diners could take in the nighttime Nile views in comfort as they sampled grilled meats and sipped tea. After about two hours, they left.

Months later, in January, the purpose of the visit became clear: Abu Dhabi wealth fund ADQ bought a 40.5% interest, valued at $882.5 million, in an Egyptian firm that in turn purchased stakes from the cash-strapped government in seven hotels—including Aswan’s Old Cataract, the Winter Palace in Luxor, Mena House in Cairo and the Cecil Hotel in Alexandria—seen as the crown jewels of the North African nation’s hospitality sector. The UAE had indirectly become part-owners of a slice of Egypt’s touristic legacy.

Digging out of its worst economic crisis in decades, Egypt is putting prized assets up for sale, and the rising powers of the Gulf region are taking out their checkbooks. Over the past nine months, high-profile visitors from Saudi Arabia and Qatar, as well as the UAE, have been sighted up and down the Nile and on the Mediterranean and Red Sea coasts. Their coffers flush with oil and gas revenue, the delegations have been scoping out the investment deals of a century.

On Feb. 23, ADQ also announced a $35 billion investment in Egypt that includes development rights for Ras El-Hekma, a Mediterranean coastal headland about three times the size of Manhattan. It was the biggest deal in Egypt’s history, and Cairo began receiving the cash within days, likely saving the economy. The financing gave Egypt enough firepower to enact a long-awaited—but painful and politically sensitive—currency devaluation, seen as key to restoring investor confidence and drawing more funds. An $8 billion International Monetary Fund loan and World Bank and European Union financing followed.