Here’s a detailed overview of Sahl Hasheesh and its developer, Egyptian Resorts Company (ERC), including challenges faced by property owners, as of July 2024-25
1. Background on Sahl Hasheesh and ERC
Sahl Hasheesh: A luxury coastal resort town on Egypt’s Red Sea coast, spanning 18 million square meters. Launched in the 1990s, it was marketed as a high-end destination with hotels, villas, and marina facilities.
Developer: Egyptian Resorts Company (ERC), a publicly traded firm (EGX: EGTS.CA) founded in 1997. ERC is Egypt’s first integrated tourism real estate developer.
Key Investors: ERC attracted Gulf investors (e.g., UAE’s Emaar Properties and Saudi’s Al Hokair Group) and international hotel brands (e.g., Hyatt, Steigenberger).
2. Challenges Faced by Sahl Hasheesh and
ERC
Project Delays
Slow Infrastructure Development: Owners reported delays in completing roads, utilities, and amenities (e.g., the marina and golf course).
Phased Delays: Only 30% of the master plan was completed by 2024, with some hotel and residential projects stalled for years.
Financial Issues
ERC’s Debt Crisis: ERC accumulated EGP 4.5 billion ($145 million) in debt by 2023, leading to liquidity shortages.
Currency Devaluation: The Egyptian pound’s collapse increased costs for imported materials (e.g., steel, fixtures), straining budgets.
Legal and Ownership Disputes
Land Ownership Lawsuits: ERC faced litigation over land allocation transparency, similar to the Madinaty case.
Buyer Complaints: Owners sued ERC for failing to meet contractual deadlines for unit deliveries and infrastructure.
Market Shifts
Overemphasis on Luxury: Sahl Hasheesh targeted high-end buyers, but demand shifted to affordable tourism projects post-COVID.
Competition: Newer Red Sea developments (e.g., El Gouna, Marsa Alam) drew investor attention away from Sahl Hasheesh.
3. Impact on Property Owners
Delayed Handovers: Many buyers who purchased units in the 2010s are still waiting for properties, especially in newer phases.
Loss of Rental Income: Investors who bought units for tourism rentals faced losses due to incomplete amenities (e.g., unfinished hotels reduced visitor traffic).
Legal Battles: Over 1,000 lawsuits were filed against ERC between 2020–2024 for breach of contract.
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4. Government and ERC Responses
ERC’s Restructuring Efforts
Debt Rescheduling: ERC renegotiated loans with Egyptian banks (e.g., Banque Misr, CIB) to avoid bankruptcy.
Asset Sales: Sold non-core assets (e.g., land plots) to raise EGP 1.2 billion in 2023.
Partnerships: Collaborated with UAE’s Eagle Hills (2024) to revive stalled hotel projects.
Government Support
Tourism Revival Initiatives: The Ministry of Tourism prioritized Red Sea projects, including infrastructure funding for Sahl Hasheesh.
Regulatory Easing: ERC received extensions to complete projects without penalties under 2023 real estate laws.
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5. Current Status (2024)
Progress on Infrastructure: 50% of roads, water, and electricity networks completed in Phase 1; marina operational by 2024.
Hotel Openings: Hyatt Regency Sahl Hasheesh opened in 2023, but other branded hotels (e.g., Steigenberger) remain delayed.
Residential Deliveries: 2,000+ villas and apartments delivered by 2024, but 4,000+ units still under construction.
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6. Risks and Future Outlook
Risks for Owners
Further Delays: ERC’s financial instability could prolong wait times for amenities and unit completions
Depreciation: Units in unfinished areas may lose value compared to completed zones like Old Town Sahl Hasheesh.
Opportunities
Tourism Recovery: Egypt’s tourism sector rebounded to 14 million visitors in 2023, boosting demand for Red Sea properties.
Government Priority: Sahl Hasheesh is part of Egypt’s 2030 Vision for tourism, ensuring long-term state support.
7. Recommendations for Owners
1. Legal Action: Join collective lawsuits to claim compensation for delays (e.g., Egyptian Real Estate Arbitration Center).
2. Pressure ERC: Demand transparency through the ERC Investor Relations Office (Cairo).
3. Rent Out Completed Units: Leverage platforms like Airbnb to offset losses while waiting for full development.
4. Monitor Government Programs: The New Urban Communities Authority (NUCA) may intervene if delays persist.
Conclusion
Sahl Hasheesh remains a high-potential project but has been hampered by ERC’s financial struggles and macroeconomic volatility. While recent partnerships and tourism growth offer hope, owners should remain proactive in safeguarding their investments. For updates, track ERC’s disclosures on the Egyptian Exchange (EGX) or consult the Egyptian Tourism Development Authority (ETDA).
