US-based commercial real estate services firm JLL has highlighted that Cairo’s real estate market saw a positive performance across all subsectors, including hotel, residential, retail, and administrative developments, in Q3 2019, Invest-Gate reports.
The hotel sector has witnessed its “highest performance since 2008” as the economy starts to recover, JLL’s “Q3 Cairo Real Estate Market Overview” report showed. Occupancy levels increased by 300 basis points to 73% in the January-to-August period, it added.
Likewise, the tourism sector continues to perform well with the new infrastructure, improved security, and major attractions set to open next year such as the Grand Egyptian Museum (GEM).
“As the economic situation in Cairo is recovering and the Egyptian pound is strong, we are witnessing healthy demand levels across all the sectors of the market. We expect to see an even more healthy economy in the months to come as Government initiatives and large scale tourism projects continue to boost demand and drive investment in the market,” according to Country Head of JLL, Egypt Ayman Sami.
Tourist arrivals to Egypt are expected to increase further, with Easy Jet and other operators resuming operations to Sharm El Sheikh and Hurghada. Upon the completion of the Sphinx International Airport in west Cairo, JLL expected more multi-destination visits to be allowed to the benefit of the capital’s hotel sector.
As for the residential sector, villa prices have also risen over the same period by 13% and 11% in west Cairo and New Cairo, respectively. However, two of Egypt’s major developers have released new gated communities in the former area, where rates are currently more affordable than the latter one.
As for the retail sector, rents have surged by 5% in Q3, bringing the total increase to around 20% year-on-year, according to the report.
Furthermore, Cairo’s office sector has seen rents hike by 9% in central and east Cairo, while leases in west Cairo have drastically improved by roughly 11% in Q3. This is due to the strong demand for high-end gated compounds and the recently launched projects in west Cairo.
More developers are offering flexible office spaces on short-term leases and this concept may prove to be attractive to non-real estate companies since they are currently assessing the requirements and the potential of relocating staff to the New Administrative Capital (NAC).