As dusk fell on the lush grounds of the Marriott Mena House hotel, the reflection of the Great Pyramid of Giza grew darker in the pool built to reflect the last of the seven wonders of the world.
As guests gathered for dinner, a band played a smooth jazz rendition of the Eagles’ Hotel California on the grassy lawns, while the staff were trying to be business-as-usual, despite the hotel having recently been purchased by famed Egyptian real estate mogul Hisham. Talaat Moustafa and two powerful Emirati conglomerates.
The sale of Mena House and six other historic hotels financed by the Emirates is part of what Timothy E Kaldas, an analyst who studies Egypt’s struggling and often opaque economy, calls a “massive fire sale” of state assets, which the government insists a part of. Cash injections as we sink further into debt.
The business empire of Moustafa, Egypt’s largest real estate developer, has seen a rebirth since his release from prison in 2017, when President Abdel Fattah Al-Sisi pardoned him for his crime of murder. Its portfolio includes properties in Egypt’s new capital, the crown jewel of Sisi’s megaprojects, as well as hospitality arm Icon, which owns many luxury hotels in Cairo.
His Talaat Moustafa Group (TMG) has acquired seven heritage hotels across Egypt, including Mena House. These include others that serve as monuments to Egypt’s recent past, such as the Sofitel Winter Palace in Luxor, the Old Cataract in Aswan, and the Steigenberger Cecil on the Alexandria coastline. International hotel chains continue to operate the hotels, but Icon has acquired a majority stake in the Egyptian government company that owns them.
Egyptian prime minister Mostafa Madbouly congratulated the $800 million sale to Mustafa, who praised the purchase for bringing in foreign currency. He added that the sale was financed by a “well-known international strategic investor”.
Weeks later, the mystery buyers were revealed to be Abu Dhabi Developmental Holding Company (ADQ), a sovereign wealth fund based in the Emirati capital, along with its subsidiary Abu Dhabi National Exhibition Company (Adnec Group), which owns the ExCel headquarters in London. .
No piece of land or modern history is considered off-limits in the Egyptian government’s desperate efforts to raise funds. Emirati investors have bought properties and companies in Egypt in recent years, including the $200 million sale of the notorious Egyptian government building in Cairo’s Tahrir square. An Emirati consortium is reportedly in talks for a $22 billion deal to buy land on Egypt’s northern coast; This deal also includes TMG, Bloomberg reported.
The sale of huge tracts of land and historic hotels is part of Cairo’s efforts to deal with its growing debt pile. While Sisi’s administration has a huge economic role for those close to his regime, especially Mustafa, his citizens suffer due to harsh austerity measures and rising inflation. Egypt is currently the second-largest debtor to the International Monetary Fund after Argentina and is currently in talks to increase its loan program.
“This is clearly a country that is selling public assets under pressure,” said Kaldas, an analyst at the Tahrir Institute for Middle East Policy. “Egypt’s financial situation is completely unsustainable.”
Mena House was built as a royal hunting lodge before being converted into a hotel in 1887 and offers a cocktail bar and dining room with panoramic views of the pyramids. Its historic wing is filled with lavish suites, including a room where Winston Churchill stayed during the 1943 Cairo conference and an exact replica of Egyptian diva Uum Kalthoum’s bedroom.
With its marble floors, mirrored lobby and vaulted ceilings, the hotel hosted peace talks between Egyptian President Anwar Sadat and representatives from Israel in one of its banquet halls and hosted guests for visits that demonstrated the former strength of Egyptian diplomacy.
Luis Monreal, executive director of the Geneva-based Aga Khan Cultural Foundation and a long-time visitor to Mena House, said he hopes the new owners realize that historic hotels in Egypt have value beyond financial. “They are part of Egyptian history and it is tourism that contributes to Egypt’s integration with the wider world,” he said.
A TMG spokesman declined to comment on hotel sales.
Mustafa was convicted in 2009 of paying a former police officer $2 million to kill Lebanese singer Suzanne Tamim by slitting her throat in her Dubai apartment.
The trial in Cairo of Mustafa, a member of the Egyptian elite traditionally considered above the law, was seen as evidence of the Emirati anger that the murder was committed on its soil over Egypt’s failure to extradite its citizens.
The murder plot later inspired the film, as the trial shocked the Egyptian public in a rare moment of collapse for the country’s super-rich. Nile Hilton Incident, It was never shown in Egyptian cinemas under extensive government censorship. Mustafa maintained his innocence in prison, stating in a widely publicized letter that the charges against him were false.
“These lies will not dislodge the great pyramids I have built in the Egyptian economy,” he wrote.
Although his words were despised at the time, they ultimately turned out to be prophetic. Following a retrial in which he was sentenced to 15 years in prison, Mustafa served half that time before being pardoned by Sisi, and his old conviction appeared to pose little impediment to his newfound role as a broker for Emirati cash injections into the Egyptian economy.
Spokespeople for ADQ and Adnec did not respond to requests for comment on the deal or the significance of Emirati wealth funds now choosing to do business with Moustafa.
Both Sofitel and Steigenberger hotel chains also declined to comment. A spokesman for the Marriott hotel chain, which operates Mena House, emphasized that everything continues as usual. “This action will not affect daily business or our employees,” they said.
Kaldaş stated that selling hotels would ultimately harm the state’s fundraising efforts, as the urgently needed foreign currency brought by the hotels would now flow elsewhere.
“The Egyptian state has received an injection of $800 million, which is simply great news, but it is permanently losing the income from these assets. “This is a plaster cast, all it does is set fire to money for an unsustainable economic model that is hobbled by the maintenance of an insatiable patronage network at the expense of the public good,” he said.
“This will not stabilize the economy, it will just finish the job; Egypt will be $30 billion in debt next year,” he said.
A reporter in Cairo contributed to this story.