Private equity firm Sun Capital Partners is reportedly considering a compound offering in Egypt as part of its expanding real estate portfolio in the country.

According to unnamed sources, the US-based firm is in talks with developers to establish a luxury residential compound on the outskirts of Cairo.

The potential compound project would be located in the New Cairo area, which is fast becoming an attractive destination for affluent Egyptians and foreign investors.

The sources did not provide any details about the size and scope of the project or the estimated investment amount.

Sun Capital has been active in the Egyptian real estate market in recent years, acquiring several commercial and residential properties in Cairo.

Last year, the firm acquired a portfolio of six commercial properties in the city for $110m. The portfolio comprises retail, office and warehouse assets.

In 2016, Sun Capital bought a luxury residential complex in New Cairo, which it has since renamed Sun City. The complex features 56 high-end villas spread across a 60,000 sq metre plot, along with a clubhouse and landscaped gardens.

Egypt's property market has been recovering in recent years thanks to a combination of government initiatives, rising demand and foreign investment. However, the Covid-19 pandemic has hit the sector hard, causing a slowdown in sales and construction activity.

Despite the short-term challenges, Sun Capital apparently remains bullish on Egypt's property market and sees opportunities to make further investments in the sector.