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A Number of Projects Previously on Hold Are Set To Resume
JLL, the world's leading real estate investment and advisory firm, has released its second quarter (Q2 2014) Cairo Real Estate Overview report, which provides the consultancy's perspective on the latest trends in the office, residential, retail and hotel sectors in the Cairo market.
Commenting on the report, Ayman Sami, Head of Egypt Office at JLL MENA, said: "The improved political and economic stability has resulted in a return in confidence in the real estate market. The untroubled passage of the recent presidential election has resulted in confidence that the new government will be able to enact some of the tough decisions required to restore growth in the Egyptian economy. The clearest evidence of this is the decision to follow the IMF recommendation and gradually remove subsidies on energy between now and 2017. Accordingly, we are witnessing the resumption of a number of projects previously placed on hold, such as the approval for Palm Hills Development Company (PHDC) to commence with the development of two land plots totalling 57 acres in East Cairo as an integrated residential project (October Village Garden)."
Sector summary highlights, Cairo Market Overview, Q2 2014:
Hotel: The hotel market is currently positioned close to the bottom of its cycle. The level of tourist arrivals in the first 4 months of 2014 (Jan to April) declined by around 26%, with the number of hotel nights declining more significantly (-39%) compared to the same period of 2013. With increased political stability, and the government increasing its efforts to market Egypt's tourist attractions overseas, it is expected that tourist arrivals will increase over the second half of 2014, resulting in improved performance of the Cairo hotel market. Occupancy rates in Cairo hotels have fallen to 38% (YT June 2014), well below the 58% recorded in the same period of 2013. Surprisingly, this trend has not affected the average daily rates negatively, with ADRs increasing significantly in comparison to the very low levels experienced over the first six months of 2014, to now stand at around USD100.
Cairo prime rental clockThis diagram illustrates where JLL estimate each prime market is within its individual rental cycle as at the end of the relevant quarter.*Hotel clock reflects the movement of RevPAR. Source: JLL
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Notes to Editors:Following the company’s rebrand from Jones Lang LaSalle to JLL earlier in 2014, this quarter marks a refreshed version of the Real Estate Overview report. The new format includes hot topics and compelling graphics of key data for each real estate sector. To download the report, please click here.
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