Cairo’s real estate market has seen positive performance across all sectors of the market including hotel, residential, retail, and office sectors, according to the real-estate firm Jones Lang LaSalle’s (JLL) Cairo Real Estate Market overview report on the third quarter (3Q) of 2019.
According to the report, the hotel sector in particular has drastically improved occupancy levels as the economy starts to pick up at a time of limited hospitality options.
JLL’s Egypt Country Head Ayman Sami said, “As the economic situation in Cairo is recovering and the Egyptian pound is strong, we are witnessing healthy levels of demand across all sectors in 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. ”
The hotel sector achieved its highest performance since 2008 and occupancy levels in the last quarter increased by 300 basis points to 73% in year-to-August 2019, the report stated.
“In parallel, the tourism sector continues to perform well with new infrastructure, improved security, and major attractions such as the Grand Egyptian Museum set to open next year,” the report read.
The report further added that tourism arrivals to Egypt are expected to increase, with airlines like Easy Jet and other operators resuming operations to Sharm El Sheikh and Hurghada. Once the Sphinx International Airport in Western Cairo is complete, it will allow more multi destination visits, benefitting the capital’s hotel sector.
In the residential sector, the report elaborated that villas’ sale prices have improved dramatically over 3Q by 13% in the West of the city and 11% in New Cairo. Responding to stronger sale prices, two of Egypt’s biggest developers have announced new gated community projects in Western Cairo, where prices are currently more affordable than New Cairo.
It highlighted that retail rents have increased by 5% in 3Q, bringing the total increase to around 20% year over year (YoY). The market has been boosted by the opening of two major developments, including the long awaited Almaza City Centre which opened its doors last month.
Almaza City Centre continues the recent trend of including a cinema, food and beverages outlets, and entertainment options as mall owners attempt to broaden the experience offered and increase dwelling time, the report pointed out.
Moving to Cairo’s office sector, JLL stated that rents increased by 9% in Central and Eastern Cairo, while rents in the West of Cairo have drastically improved by as much as 11%, in Q3.
JLL attributed that to the strong demand in high-end gated communities and recently announced projects in Western Cairo. More developers are offering flexible office space on short-term leases and this concept may prove attractive to financial and other companies who are currently assessing their requirements for space and the potential of relocating staff to the New Administrative Capital.