Cairo’s real estate market continued to perform positively in the first quarter of 2019, indicates JLL’s Q1 Cairo Real Estate Market Overview report. Strong growth and positive sentiment reflect the successful measures taken to enhance security, boost tourism and overall investor demand across all sectors.
“The real estate market in Egypt witnessed a strong start to the year with healthy demand levels and all sectors remaining in the upturn stage of their cycle. The country continues to benefit from the positive sentiment created by planned cities and projects. We anticipate these projects to not only continue driving domestic demand, but also to attract significant international investments in the months to come,” says Ayman Sami, country head, JLL, Egypt.
Retail supply in Cairo remained unchanged at 22.6 million sqft of GLA, as no new retail centres were delivered to the market in Q1. An additional 4.1 million sqft of retail space is expected to enter the market by the end of the year, including Madinaty Mega Mall which is partially open; City Centre Almaza; and The Yard Mall.
Most of the future supply is in New Cairo, with limited announcements in West Cairo. New developments are largely focused in areas that lack existing purpose-built good quality retail, which will contribute to their success. East Cairo continues to be the main focus for new retail developments. The creation of the New Administrative Capital has provided a stimulus for developers to expand their existing or planned projects or announce new brands to accommodate the growing consumer demand.
While retail rents remained relatively stable on a quarterly basis, they recorded a notable increase over the past year reflecting healthy demand across Cairo. Retail vacancies remained stable in Q1, but are expected to increase as major projects are completed during the rest of 2019. This does not necessarily insinuate rents will decline; indeed, they could actually increase as the new developments will offer more luxurious and superior quality space. The locations of some of those new developments in areas not currently well served for retail space – for example, Centre Almaza – could also support rental growth in 2019. Developers are continuing to innovate and offer interactive concepts such as leisure and cultural activities – including events, concerts, activations events – to provide an enhanced retail experience to visitors.