The requested news item does not exist. Please return to News
JLL, the world's leading real estate investment and advisory firm, has released its third quarter (Q3 2014) Cairo Real Estate Market Overview report, which provides the consultancy's perspective on the latest trends in the office, residential, retail and hotel sectors in the market.
Commenting on the report, Ayman Sami, Head of Egypt Office at JLL MENA, said: "The third quarter of 2014 saw further political stability in Cairo as the government proceeded with implementing its roadmap. Following the reduction of energy subsidies, the government is currently reforming the tax system, a measure that should boost the economy and halve the budget deficit within seven years, according to the Finance Minister. Additionally, Egypt's tourism industry continues to see overall improvement with a revival in visitor numbers in certain markets. For example, the number of UAE tourists grew by 35% during the first five months of the year. Against this improving economic backdrop, the third quarter saw increased confidence in the real estate market. Demand remains relatively active across all segments and developers are moving forward with both new and re-launched projects."
Mr. Sami continued: "The positive sentiment that has placed the economy on the road to recovery is reflected in the announcement of the ambitious Suez Canal Regional Development Project. The plan to expand Egypt's economic lifeline is expected to draw in domestic and international investment and finance industrial and export services as well as reinforcing the industrial and logistics backbone of Egypt's economy. Blueprints for other major national projects are also being prepared, including the 'Golden Triangle' which aims at exploiting the natural resources and mineral wealth in Upper Egypt. All of these projects bode well for the economy and real estate market in Cairo."
Sector summary highlights, Cairo Market Overview, Q3 2014:
Office: The office sector remained relatively unchanged over the third quarter with the addition of just one new project. City Stars Properties released an additional 4,000 sq m to the total office stock, which now stands at around 890,000 sq m. Rental rates have remained flat over the past year. While vacancy rates remain high (27%) there is increased interest from international occupiers for additional office space in New Cairo. Vacancy rates have increased marginally over the quarter due to the introduction of new office space in City Stars and the 50% of Future Gate New Cairo that is currently being offered for rent on a sub-lease basis.
Residential: The residential market has been the strongest performing sector of the market in Cairo in Q3, with sales prices increasing ahead of rents in most locations as confidence returns. With the exception of villa rents in 6th of October, sales and rents increased across the basket monitored by JLL. While prices and rents in New Cairo remain above those in 6th October, the gap has narrowed somewhat in recent months as 6th October City has recorded the strongest price growth. As confidence is restored to the market, the residential sector is expected to recover its dynamism and show continued growth in prices and rentals over the remainder of 2014 and into 2015.
Retail: Cairo's retail market registered a slight improvement in performance over the third quarter. Average rents increased 2% Y-o-Y as owners of prime malls increased their asking prices, encouraged by interest from international brands. The Cairo retail landscape continues to transform from small, local shops to larger malls with international brand representation, such as Galleria 40 which opened in West Cairo in the third quarter. The retail market is expected to witness the opening of around 970,000 sq m of additional space over the next two years, the majority of which will be within Super Regional and Regional malls.
Hotel: Recent political stability coupled with government efforts to revive Egypt's tourism sector have reflected positively on the performance of the hotel market in the third quarter. While year-to-August occupancy levels remain lower than they were in 2013 (42% vs. 56% respectively), ADR's have improved significantly registering a 106% increase Y-o-Y. These rates are expected to improve further as Cairo's hotel market remains underdeveloped, with limited supply in the pipeline. The hotel sector is expected to perform well over the remainder of 2014 as the government launch further new initiatives to attract tourists.
Cairo prime rental clock
Country Head - Egypt
+202 2480 1946
Senior Marketing & PR Manager
+971 4 426 6999