Talaat Moustafa Group Holding should keep land on the outskirts of Cairo so the real estate developer can finish building housing units on the 33 million-square-meter site, a government-appointed legal committee recommended.
The proposal would reverse an earlier court ruling that annulled the government sale of the land due to irregularities, cabinet spokesman Magdy Rady told a news conference in Cairo today.
The committee recommended that the government revoke its existing sales contract with Talaat Moustafa before reallocating it to the same company, invoking a law that allows the authorities to assign land by a direct order to protect the “public interest,” the cabinet said in a statement distributed to reporters.
Talaat Moustafa is Egypt’s biggest publicly traded real estate developer and the Madinaty development is its biggest project. The project is designed to accommodate 600,000 people in 120,000 housing units. A court ruling to annul the sale, upheld on Sept. 14, prompted foreign investors to sell off Egyptian real estate stocks because of concern that developers will be forced to pay more for land they already own.
Shares of Talaat Moustafa were little changed at 6.96 Egyptian pounds at the 2:30 p.m. close in Cairo today, valuing the company at 14 billion Egyptian pounds ($2.45 billion), according to data compiled by Bloomberg. The government announcement came after the close of the market.
The committee said the size and progress of the project merits keeping the land with Talaat Moustafa, given that the company has already developed a “big part of the project, with infrastructure that includes buildings and services,” according to the cabinet statement.
The committee said that the state-run New Urban Communities Authority, which sold the land, should discuss the appropriate price of the land with the ministries of finance and housing before reassigning it to the company.