JLL expects a new wave of e-commerce transformation across Egypt, especially in Cairo, after showing a notable growth potential following the coronavirus fallout, Invest-Gate reports.
Due to the shutdown of malls, the “logistics landscape” in Egypt is transforming, JLL stated in its Q1 2020 Cairo Real Estate Market Performance report.
Consumers have had a taste for the efficiency associated with e-commerce, and thus the sector is now striving to keep up with the exceptional increase in demand for online shopping, the report added.
“As a result, more and more retailers are examining the interplay between bricks-and-mortar, as well as online retailing, in order to compete in a rapidly changing environment. This is also increasing the demand for new and better quality warehouses and distribution centers as retailers continue to grow their consumer base and promise more choice and convenience,” JLL further highlighted.
“E-commerce is a popular investment sector with growing interest globally,” JLL’s Country Head Ayman Sami was quoted as saying.
“It will need strong government support, comprising a key element of plans for the city’s continued economic growth. This will also reflect positively on the active warehousing and logistics sector in Egypt with great potential to grow,” he added.
In general, despite the COVID-19-led market uncertainties, most sectors remained stable in Q1 2020.
The office sector in particular recorded strong performance, recording a 9% rise in average prime rents on an annual basis. Besides, Cairo’s retail sector has seen positive performance during the first quarter of the year, where average rental rates surged by 10% across primary and secondary malls, JLL confirmed.
As for the residential sector, an additional 58,000 housing units are set to be finalized by year-end. But, given the current market condition, such deliveries are anticipated to spill over into FY 2021/22.
“The rental market remains landlord-favorable, as rents in both New Cairo and 6th of October City continue to witness an increase,” according to the global property advisory firm.
On the other hand, the hospitality industry has been the most severely impacted as a result of the pandemic and this is evident especially towards the end of Q1, with a 30% annual drop in average daily rates, while an even sharper decline of 81% took place in occupancy rates.