JLL, a leading global real estate consulting and investment firm, released its latest report on the dynamics of Cairo’s real estate market performance during Q1 2026, Invest-Gate reports.

The report indicated that Cairo’s real estate market is witnessing strong supply momentum across various sectors. Current and upcoming supply is heavily concentrated in New Cairo, which represents the main commercial hub of the Egyptian capital.

The report highlights the evolution of pricing strategies following the slight depreciation of the Egyptian pound in March 2026, prompting landlords and developers to adapt to ongoing economic pressures. Despite short term challenges resulting from current geopolitical tensions, Cairo’s growing global position remains a key factor shaping the future of strategic real estate developments across major sectors.

Commenting on the report, Ayman Sami, Head of JLL Egypt, stated: “Resilience has become the defining feature of Cairo’s real estate market during Q1 of this year, as various sectors responded quickly to economic and geopolitical shifts by adopting adaptive strategies and strategic repositioning. With significant new supply entering the market, landlords, developers, and operators are shifting their approaches to meet evolving demand. The market’s ability to absorb and adapt to these changes reinforces investor confidence and highlights the sector’s underlying strength and long term potential.”

Growing demand for flexible and high quality office spaces

Cairo’s office space stock reached 2.8 million square meters following the delivery of more than 100,000 square meters of Grade A and B office spaces during Q1 2026. New Cairo accounted for nearly 90% of this stock, with an additional 426,500 square meters scheduled for delivery خلال this year.

Lease renewals dominated market activity, with landlords increasing annual escalation rates. Prime and Grade A office rents rose modestly by 1.8% and 2.3%, respectively, compared to last year. Following the depreciation of the Egyptian pound in March, landlords are reassessing pricing strategies, particularly for EGP-denominated units. Meanwhile, the average vacancy rate remained stable at 9%, reflecting sustained demand for prime and Grade A office spaces.

Flexible office solutions are increasingly shaping the market, recording rapid growth and strong performance. IWG classified Egypt as the fastest-growing market in the region, reporting 300% growth in 2025, with plans to open 30 additional centers in 2026.

Looking ahead, a slowdown in upcoming supply is likely due to market absorption capacity, particularly amid economic and geopolitical uncertainty in the region. However, sustained economic stability in the medium term may attract significant international demand from companies seeking regional expansion and risk diversification.

Vision 2031 drives global partnerships in the hospitality sector

Strategic partnerships represent a key trend in Cairo’s hospitality sector during 2026, driven by Egypt Vision 2031 and demand for tourism infrastructure development through international expertise. These alliances accelerate the entry of global brands into the market, expand branded residences and mixed-use developments, and elevate service standards, contributing to attracting high-value tourism and boosting foreign investment. Cairo’s inclusion among the top 50 cities to visit in 2026 further strengthens positive outlooks.

The sector recorded the addition of approximately 280 new rooms in New Cairo during Q1 2026, bringing total hotel stock to around 29,000 rooms. An additional 2,560 rooms are expected to be completed by yearend, reflecting strong market momentum.

Key performance indicators showed occupancy rates increasing by 1.4 percentage points year-on-year to reach 66.1% by the end of March 2026. While average daily rates slightly declined by 0.2% to USD 155, revenue per available room increased by 1.9% to USD 102.4.

Egypt’s resilience, alongside continued government investment in infrastructure, tourism destinations, and visitor experience, is expected to sustain growth momentum toward achieving tourism targets for 2031 despite short-term geopolitical challenges.

Strategic repositioning maximizes footfall in retail sector

Approximately 89,000 square meters of retail space were delivered during Q1 2026, mainly comprising small-scale malls in New Cairo and Giza, bringing total retail stock to more than 3.3 million square meters. Around 331,300 square meters of additional retail space is expected to enter the market by year end, mostly in the form of small malls within mixed use developments, alongside a limited number of major regional malls.

Prime retail rents recorded modest annual growth of 1.4%, while convenience centers grew by 0.8% and regional and super-regional malls by 3.6%. Rental increases were particularly evident in newly opened malls, as landlords reassessed pricing strategies following exchange rate adjustments.

Tenant performance varied by segment, with open-air retail centers facing sales challenges, while F&B operators were impacted by the 9 PM closing regulation. In contrast, major regional malls maintained strong occupancy levels, with vacancy rates declining to 6% in Q1 2026 compared to 7.2% in Q1 2025.

Despite constrained purchasing power due to currency fluctuations and inflation, landlords and tenants are adopting repositioning strategies to maximize footfall. For example, Dandy Mall enhanced its appeal as a modern lifestyle destination by adopting experiential retail and expanding F&B offerings, while Brass Monkey Cairo introduced a dual use concept, operating as a co-working space during the day and an entertainment venue at night.

Regulatory shifts impact the residential market

Cairo’s residential stock reached 333,500 units following the delivery of 8,000 units during Q1 2026. Developers continue to maintain market momentum, with nearly 42,000 units expected to enter supply in 2026.

The market witnessed the announcement of a limited number of new projects, primarily by major developers or prominent partnerships, while smaller developers continue to face cash flow challenges. Purchasing power pressures have slowed sales activity, leading the secondary market to record single digit annual growth rates.

Meanwhile, the rental market showed stable activity, recording annual growth of 11.2% in 6th of October City and 10% in New Cairo during the period from the beginning of the year until the end of Q1 2026.

The 2025 rent law and the classification of residential areas into three color coded categories will provide landlords with a clear legal pathway to reclaim and lease their properties at prevailing market rates in the long term.