The global COVID-19 pandemic has resulted in a new wave of transformation in e-commerce in Cairo and across Egypt, indicates JLL’s Q1 Cairo Real Estate Market Performance report.
Due to the closure of malls, the logistics landscape in Egypt is transforming. Consumers have had a taste for the efficiency associated with e-commerce, and therefore the sector is now striving to keep up with the exceptional increase in demand for online shopping.
As a result, more and more retailers are examining the interplay between brick-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 centres as retailers continue to grow their consumer base and promise more choice and convenience.
“E-commerce is a popular investment sector with growing interest globally,” said Ayman Sami, country head, JLL, Egypt. “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.”
Overall, the retail sector in Cairo has seen positive performance during the first quarter of the year where average rental rates increased by 10% across primary and secondary malls. However, the current market conditions have suffered from the pandemic and caused an increase in downward pressure on operations and sales volumes, resulting in landlords offering rental exemptions to support tenants. This is expected to reflect even further in the second half of this year provided the temporary lockdown of all retail operations and other preventative measures remain active.
The retail market is also expected to experience some delays in project deliveries with developers having to reconsider their completion dates given the current conditions.
In efforts to support small-and-medium-sized businesses (SMEs), the Central Bank of Egypt (CBE) has opted to offer a six-month extension on their credit repayments. Furthermore, the CBE has obliged banks to provide the most affected sectors from the outbreak with the necessary credit limits to finance their working capital of daily trading operations, with special emphasis on employee salary payments.