Cairo – Mubasher: Three Egyptian companies said on Thursday that they have suspended housing-related agreements with Saudi Arabia following political instability between the two countries, news agency Reuters reported.

In April 2016, four Egypt-based real estate firms had previously announced signing memorandums of understanding (MoUs) with the Saudi Housing Ministry during King Salman's visit to the Egyptian capital; however, political tensions have since emerged between the governments of the two countries, which resulted in three out of the four companies suspending the agreements.

Tensions involved divergence on the conflict in Syria as well as the transfer of two Red Sea islands to Saudi Arabia, which the Egyptian government had agreed on during King Salman's visit last year.

The Egyptian real estate companies that had primarily entered agreements to build housing units in Saudi Arabia were Al Ahly for Real Estate Development, Talaat Mostafa Group (TMG), Misr Italia, and Orbit Group. Local media had reported that each firm would build around 10,000 to 15,000 units.

"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," Hussein Sabbour, chairman of Al Ahly for Real Estate Development, told Reuters.

Meanwhile, Misr Italia’s deputy chairman Mohamed Al-Assal told the agency that his company was no longer in talks with the Saudi side over the deal.

Similarly, Orbit Group also told Reuters its deal with Saudi Arabia was suspended; however, it declined to provide details.

Finally, TMG “has not said that it has suspended work, and did not respond to requests for comment,” the news agency added.