Several manufacturers believe that the rising investment demand from foreigners, especially from China and Turkey, in Egypt’s industrial sector has pushed the government to increase industrial land prices. While some expect the new hikes not to affect the attractiveness of industrial investment due to government payment facilitation, others see negative repercussions amid rising other industrial production costs.

On August 18, the Prime Minister issued a decision to raise industrial land prices under ownership or usufruct rights by an average of 10% to 20%, with some areas exceeding 100%. The new prices will take effect from July 2025 for one year.

Hassan Mabrouk, a member of the Engineering Industries Division at the Federation of Industries, said the rise in industrial land prices came amid increased demand and reduced supply.

Mabrouk told “Al-Shorouk” newspaper that the increased demand for industrial land purchases was due to increased foreign investment, specifically from Chinese and Turkish nationalities in the industrial sector, as they relocated their factories to Egypt to overcome the impact of U.S. tariffs imposed by former President Donald Trump on their countries.

With the U.S. tariffs imposed globally, many experts expect Egypt to attract industrial investments from countries subject to these tariffs, as it represents an opportunity to export their products to the U.S. with lower customs duties.

Mabrouk pointed out that rising industrial land prices will not affect the attractiveness of industrial investment in Egypt, especially since any increase in land price is ultimately borne by the consumer, not the investor. Additionally, the land remains among the cheapest for foreign investors due to exchange rate differences.

Mohamed El-Morshedy, head of the Textile Industries Chamber, said the current rise in industrial land prices does not pose challenges to industrial investors, but the availability of land is more important amid high demand and limited supply.

El-Morshedy noted that the lack of available industrial land is the main reason for the burdens on manufacturers, but prices remain within reasonable limits thanks to government payment facilitation.

Recently, the Ministry of Industry has tried to combat the phenomenon of land hoarding and increase the number of industrial lands offered to manufacturers through the Egypt Industrial electronic platform, announcing the eleventh offering of industrial lands including 1,386 industrial plots across 23 governorates.

Shimaa Aliba, a board member of the Engineering Industries, believes that the increase in industrial land prices will pressure industrial investors, especially locals and small to medium enterprises.

Aliba called for lowering interest rates and easing payment terms so manufacturers can bear the cost of land, “which must be fully serviced,” especially since the pressure on industrial investors is not from price hikes but from the lack of serviced lands, adding financial burdens beyond land purchase prices.

Mohamed El-Bahy, a board member of the Federation of Industries, believes that the increased foreign investment demand in Egypt’s industrial sector should not push the government to raise land prices, but rather to offer incentives by lowering land prices to encourage investors to relocate their factories to Egypt due to negative impacts from tariffs.

El-Bahy added that increasing industrial land prices will have negative repercussions on manufacturers, especially amid rising other production costs such as water, electricity, and fuel, which may push many to move their factories, especially to neighboring countries that sometimes provide industrial land.

Mohamed El-Mohandes, chairman of the Engineering Industries Division, said the rise in industrial land prices is exaggerated and threatens the future of industrial investment amid challenges manufacturers face from rising production costs.

El-Mohandes added, “Even if manufacturers agree to the new price hikes, they will face harsh government conditions for land payment,” calling on the government to provide facilitation in land reservation after price increases to support the industrial sector and manufacturers.