No closure as Saudi-Egyptian tensions sour real-estate deals

Egyptian real estate companies have suspended housing deals with the Saudi Arabian government amid political tensions between the two countries, company executives said on Thursday.

"We suspended the agreement with the Saudi Housing Ministry despite all project studies being concluded because of worries over tensions between Egypt and Saudi Arabia," al-Ahly for Real Estate Development Chairman Hussein Sabour told Reuters.

Mohamed al-Assal, the deputy chairman of another company, Misr Italia, also said his company was no longer in contact with Saudi Arabia over the deal.

"The agreement was canceled due to a lack of cooperation from the Saudi side and a breakdown in communications between both sides since last June," he claimed.

The Egyptian real estate companies were set to build thousands of housing units in Saudi Arabia.

They had signed memorandums of understanding with the Saudi Housing Ministry during King Salman's April visit to Cairo last year, during which the two countries signed various agreements worth $22.6 billion.

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Political tensions have emerged between the two countries since then, particularly over the transfer of two Red Sea islands to Saudi Arabia, to which Cairo agreed during Salman's visit.

However, an Egyptian court blocked the islands deal in a final ruling last month.

The tensions also included diverging stances on the conflict in Syria.

Saudi Arabia suspended oil shipments to Egypt in October, a move announced after Cairo backed a Russian-drafted UN resolution on Syria that excluded calls to stop bombing Aleppo, angering Riyadh, which had strongly opposed the resolution.

Saudi Arabia has previously provided billions of dollars of aid to Egypt - reportedly including oil deliveries, direct investment, and deposits in the central bank to shore up Egypt's depleted currency reserves.