The government has launched a new lease-to-own system for industrial land that allows manufacturers to spread land costs over up to 21 years and seek ownership after one year of operations, according to an Industry Ministry statement.
The mechanics: Investors can lease plots for seven to 21 years at an annual rent equivalent to 5% of the land’s price. The rental value will be reassessed after years seven and 14 if the investor has not applied for ownership. Once a factory has completed one year of actual operations, the investor can apply to buy the plot. Rent already paid will be deducted from the purchase price, with the investor paying 25% of the remaining value and settling the remaining balance over three annual installments.
Another hit on land hoarding: In parallel, the ministry is temporarily suspending Decision 107 of 2026 from mid-August until the end of the year, lifting the three-year lock-up period on selling industrial land and factories, giving investors the freedom to transfer ownership and exit without being tied up by red tape. The goal? Curb the secondary market speculation that has caused land prices to soar in areas like 10th of Ramadan.
The lease-to-own system responds to investor demands for more flexible land-allocation options, Tenth of Ramadan Investors Association head Samir Aref tells EnterpriseAM. Giving manufacturers the choice between direct ownership, usufruct, and lease-to-own arrangements would allow them to preserve a larger share of their capital for operating expenses and encourage additional investment, he said.
Lower land costs unlock expansion: Federation of Egyptian Industries member Alaa Nasr agrees, telling us that the low 5% annual rent will leave more funding available for machinery and working capital, potentially unlocking a new round of factory expansions outside established industrial cities.
A fully digital process: The application and payment process will run electronically through the Egypt Digital Industrial Platform, which was initially launched in September 2024 strictly for land allocation and was expanded earlier this year to consolidate licensing, building permits, and payments into one centralized system.
Nine routes to a factory
Lease-to-own is just one of nine mechanisms the ministry is deploying to get industrial land into the hands of producers. The rest of the playbook includes:
- Quarterly land offerings to cut down the time investors spend waiting for new tenders;
- Direct ownership of industrial plots;
- Usufruct arrangements;
- Ready-built units, with the state currently sitting on an inventory of around 4.8k units in state industrial complexes;
- Leaning on private developers by nearly doubling the number of private industrial developers to 30 from 16;
- The Productive Village program, which targets 100 factories over three years based on the competitive advantages of each governorate;
- A digital marketplace for stalled factories that allows investors to partner up and reuse existing, idle production assets;
- Suspending the three-year lock-up on land sales, as we noted above, giving investors a temporary window from mid-August through year-end to exit or transfer assets without being penalized.
The Tenth of Ramadan dilemma
The new mechanisms only address part of the problem in established industrial cities. Tenth of Ramadan faces a shortage of serviced plots despite strong demand from both local and foreign investors, Aref says. Official land priced at around EGP 6k per sqm has reportedly traded for as much as EGP 30k per sqm in the secondary market, as we reported previously. The ministry is currently servicing a 10k-feddan expansion, according to Aref, and the state has made ready-built industrial units available in the Tenth of Ramadan with different ownership and payment systems in the meantime. Separately, the Industrial Development Authority has sought EGP 21 bn to service additional industrial land.
More payment options also need to be paired with tighter development deadlines, as investors holding plots without building are preventing productive projects from entering, Aref says. The ownership condition in the new system partly addresses that concern: investors cannot apply to buy a leased plot until the factory has operated for one year.
IN CONTEXT- The government has also launched a campaign to reclaim idle plots and industrial units from investors who have failed to develop them, beginning in Tenth of Ramadan and Badr City, as it looks to return unused land to productive activity.
Upper Egypt faces other hurdles
Land is available in Upper Egypt, but incomplete infrastructure keeps investors away. Industrial land prices in Sohag have gone from coming at no charge to around EGP 1.2k per sqm, Sohag Investors Association head Mahmoud El Shandawily tells EnterpriseAM. He says more flexible payment options should help, but the bigger barrier is utilities. The Al Ahaywa East Industrial Zone, established in 2000, still lacks water, electricity, basic services, firefighting facilities, and a police point. Roads have improved, including the link to Safaga Port, but attracting manufacturers will require logistics zones, freezones, gas connections, complete utilities, and lower operating costs, alongside flexible land-allocation systems, he says.
Financing remains the missing piece: Aref and El Shandawily agreed that reducing the upfront cost of land will not be enough without affordable financing for the rest of the project. They called for a dedicated financing mechanism for industrial investments, lower interest rates on factory loans, and a stronger role for the Credit-Risk Guarantee Company. Lease-to-own can preserve capital at the land-allocation stage, but investors will still need funding for construction, machinery, utilities, working capital, and the start of operations.
