By Wael Hossam El Din

Cairo’s real estate market appears to have turned a corner in 2025, showing signs of renewed confidence following a period of economic turbulence. The easing of inflation and the stabilization of the EGP have brought a degree of resilience back to the sector, according to real estate consultancy JLL’s Q1 2025 report. But while the overall outlook is improving, the city’s real estate subsectors — residential, administrative, hospitality, and retail — are each responding in distinct ways to shifting demand patterns and macroeconomic forces.

Administrative Real Estate Returns to Growth Mode

One of the key highlights from JLL’s latest report is the rebound in Cairo’s administrative real estate market. During 1Q 2025, some 58k sqm of new office space came online, pushing total supply to nearly 1.9 mn sqm. Speaking during a presentation ahead of the report’s release, JLL MENA’s Head of Marketing Anood Haddad noted that the market could see a significant increase in supply by year-end, supported by new project completions in New Cairo and the New Capital.

Haddad pointed to a growing preference among multinationals and large companies for modern, flexible administrative spaces in central locations — a trend that reflects the post-pandemic transition toward hybrid work arrangements. The demand for shared spaces and ready-to-use, fitted-out offices is rising, reshaping the market for high-quality grade A spaces.

This expansion in administrative supply was accompanied by notable changes in the office market dynamics, particularly in vacancy rates and rental trends.Rents are already feeling the upward pressure. In Q1 2025, Cairo’s office market saw 10.5k sqm added to available space, with an additional 615.3 sqm expected before the year is out. The shortage of high-quality supply has helped push average vacancy rates for grade A offices down from 10.9% to 8.6%. In tandem, rental prices for grade A office spaces climbed by 4.7%, while prime spaces saw a 2.9% increase compared to the same period last year.

Residential Sector Proves Resilient Despite Cost Pressures

Cairo’s residential market, meanwhile, continues to ride a wave of strong local demand. Over 95% of real estate transactions are still driven by local buyers, JLL reported — a testament to the ongoing population growth and the growing appetite for quality housing in new urban communities. New Cairo, Sheikh Zayed, and the New Capital remain hotspots, where prices are rising between 15-20% annually due to high construction costs and demand.

Developers are pressing ahead with both ongoing projects and the launch of new phases to meet that demand, particularly from middle- and upper-income Egyptians seeking serviced, gated communities. According to the report, smaller, more affordable townhouses and finished apartments within mixed-use developments will give developers a competitive edge in 2025, as the market leans increasingly toward affordability and utility.

The sector delivered around 7.5k new residential units in Q1, pushing Cairo’s total supply beyond 300k units. Key areas like Sixth of October and New Cairo continued to see rental and sale price growth, driven by an enduring demand and limited supply. A further 28.5k new units are expected to come online this year, primarily in east Greater Cairo.

At the same time, changing consumer behaviour is also shaping market trends. With the cost of living rising, many buyers are opting to rent in upscale neighbourhoods that would be otherwise out of reach for purchase — reflecting a desire to maintain a certain lifestyle standard without the financial burden of ownership. This trend is encouraging more property owners to put their units on the rental market, turning investment properties into income-generating assets while offering greater variety to tenants.

Hospitality Market Recovers as Tourism Rebounds

After years of uncertainty, Egypt’s hospitality sector is also regaining ground. Supported by a rebound in tourism — particularly from Europe and the Gulf — occupancy rates are on the rise in key destinations such as Cairo, Hurghada, and Sharm El Sheikh.

JLL expects the trend to continue throughout 2025, with further support from new investments in both luxury and mid-range hotels. The resurgence of business and cultural tourism is also attracting global hospitality brands, many of which are viewing Egypt, and Cairo in particular, as an increasingly attractive regional hub. Several new projects are already underway, especially in the New Capital.

Q1 2025 saw the opening of two five-star hotels — the Nile Hilton Maadi Cairo and Sofitel Cairo in Downtown — adding roughly 870 rooms to the city’s hotel stock. An additional 650 rooms in the four- and five-star categories are set to be delivered by year-end. This will expand Cairo’s total hotel room supply beyond its current 27.8k rooms, according to JLL’s data.

Retail Sector Experiments with New Formats Amid Shifting Demand

While high inflation has dented purchasing power, Cairo’s retail real estate market is showing cautious signs of revival, thanks in part to developers experimenting with new formats. Moreover, the focus is now on providing diverse visitor experiences by integrating shopping with entertainment and dining — a response to changing consumer preferences and lifestyle trends.

Developers are also turning to master-planned communities that integrate residential, retail, and administrative spaces to maintain relevance and long-term value. Demand from local and international brands remains strong, particularly in Greater Cairo and coastal areas, according to the JLL report.

The retail sector added around 27k sqm of space in 1Q 2025, bringing total supply in the capital to 3.22 mn sqm. The majority of this expansion is taking place in east Greater Cairo — especially in New Cairo and the New Capital — where commercial complexes and community shopping centres continue to proliferate.

Smaller, open-air developments are reportedly outperforming their larger, enclosed counterparts, offering a more flexible and socially engaging environment that appeals to modern shoppers. The sector’s gradual recovery is reflected in improving sales, a decline in vacancy rates to 7.2%, and sustained demand among tenants seeking to expand or reposition their offerings in the market.

A Complex Recovery — But Positive Momentum Across the Board

Though the recovery is uneven across segments, the broader picture points to a market regaining balance. Each subsector is contending with its own set of challenges and drivers — from the need for flexible office space and affordable housing, to the reimagining of retail spaces and the revitalisation of the tourism industry.

What ties these developments together is a sense of cautious optimism. With economic indicators showing signs of stabilisation and investor confidence tentatively returning, Cairo’s real estate market is regaining some of the dynamism lost in previous years. The remainder of 2025 is expected to test how sustainable this momentum will be — particularly as developers, buyers, tenants, and investors adjust to a new normal defined by selectivity, flexibility, and value-driven decisions.