QNB backs District 5 expansion with funding

Arabian Post Staff -Dubai

QNB Egypt has signed an EGP 5.5 billion medium-term facility agreement with MARAKEZ to finance part of the investment cost for residential and commercial expansion at District 5, strengthening one of East Cairo’s major mixed-use developments at a time when developers are turning increasingly to structured bank financing.

The agreement covers funding for District 5, a 268-acre project in New Katameya that combines homes, offices, retail, leisure and food and beverage outlets. The development is positioned near 90th Street, the American University in Cairo, Maadi and Cairo International Airport, giving it access to key residential and business corridors in Greater Cairo.

Mohamed Bedeir, Chief Executive Officer of QNB Egypt, signed the agreement with Ahmed Demerdash Badrawi, Executive Vice Chairman of MARAKEZ. Senior executives from both organisations attended the signing, including Mohamed Khairat, Assistant CEO and Chief Business Officer of QNB Egypt, and Osama Ezzo, Chief Financial Officer of MARAKEZ.

The financing comes as Egypt’s property market continues to rely on large-scale urban developments to support construction activity, job creation and demand across linked sectors such as building materials, retail, services and transport. High borrowing costs and inflation have made capital efficiency a central issue for developers, particularly those with mixed-use projects that require long investment cycles and phased delivery.

District 5 is among MARAKEZ’s flagship developments, designed as an integrated destination rather than a conventional residential compound. Its components include a residential district, an administrative zone, retail space, a shopping mall, sports and entertainment facilities and outdoor areas intended to support day-to-day living within a single master-planned community.

Badrawi said the financing represented an important step for District 5 and the wider MARAKEZ portfolio, adding that it would improve capital efficiency, accelerate project timelines and support the delivery of high-quality mixed-use developments. His remarks point to the growing importance of bank-backed funding as developers seek to maintain delivery schedules while managing construction cost pressures.

Bedeir said the partnership reflected QNB Egypt’s focus on tailored financing for major market players and its role in supporting projects aligned with economic activity and urban development. The facility also fits within the bank’s wider strategy of expanding corporate lending to large projects with clear commercial and economic linkages.

QNB Egypt’s capacity to support the transaction is underpinned by a strong balance sheet. The bank’s assets reached EGP 1.044 trillion in the first quarter of 2026, after a 12 per cent increase from the start of the year. Loans rose 7 per cent to EGP 498 billion, while deposits grew 13 per cent, giving the lender room to expand credit across corporate and retail segments.

The bank reported EGP 9.5 billion in net profit for the first quarter, up 33 per cent year on year, supported by higher net interest income and net banking income. Its non-performing loan ratio stood at 4.58 per cent, while coverage reached 118.9 per cent, indicating a cautious approach to credit risk even as lending activity expands.

For MARAKEZ, the agreement follows an active period of financing tied to District 5’s growth. The developer secured EGP 3 billion from KFH-Egypt earlier this year to support commercial and office expansion at the same project, signalling sustained institutional appetite for income-generating real estate assets in New Cairo and surrounding districts.

Egypt’s real estate market remains a preferred hedge for many buyers facing currency volatility and inflation, but developers are also dealing with higher execution costs, more selective demand and pressure to show progress on delivery. Projects that combine residential, office and retail uses are attracting attention because they diversify revenue streams and appeal to both end-users and businesses seeking integrated locations.

Annual urban inflation rose to 15.2 per cent in March, increasing pressure on building costs and household purchasing power. The Central Bank of Egypt has maintained a cautious policy stance after an earlier easing cycle, with rates still high by historical standards. That backdrop makes long-tenor facilities important for developers managing phased construction and sales flows.