Palm Hills bets on commercial property as Egypt's economy recovers

Palm Hills, Egypt's second-largest listed real estate developer, will begin investing in commercial properties next year and expand its residential operations to meet higher anticipated demand, its co-chief executive said on Thursday.

The return of foreign investors scared away by nearly four years of political turmoil is raising expectations for the company, which turned a corner after facing client cancellations and investigations into previous state land sales following a popular uprising in 2011.

A flight by foreign companies from violent unrest following the overthrow of elected President Mohamed Mursi in mid-2013 threatened to drive up vacancy rates at offices and malls and prompt international investors to shift funds to other markets.

But Tarek Abdel-Rahman said a nascent economic recovery fuelled by foreign investors - which the government is courting with structural reforms and an array of mega-projects - was creating demand for commercial space.