Cairo’s real estate market remained stable in quarter two supported by government initiatives, despite challenging global economic conditions, according to JLL’s Cairo Real Estate Market Performance report.
“The real estate market in Egypt continues to benefit from the various initiatives that have been put in place by the government across all sectors. We anticipate this to continue driving demand and attract international investments in the mid-to-long term,” said Ayman Sami, country head, JLL, Egypt.
Primary and secondary rents in the retail market have increased by 5% to 10%, respectively, annually. These are expected to remain stable with mall operations gradually getting back to normal. Landlords continue to offer incentives to support tenants that include waived service charges and rent-free periods. Some landlords have also adopted a revenue-share model to support retailers to account for the loss of sales.
E-commerce is still on the rise as consumer preferences lean towards online shopping, allowing for a prominent number of home-grown businesses to emerge.
Also read: E-commerce set to grow in Egypt
The government continues to support the sectors most impacted by the pandemic with initiatives such as allowing corporates to pay income tax in three instalments rather than one. The government has also increased the tax exemption limit from EGP8,000 to EGP15,000 for all employees, while increasing the annual income of the public sector and state employees by 7% and 12%, respectively.
In light of travel restrictions, the hotel market witnessed a significant decline as occupancy levels registered 42% in the YT May 2020, the lowest rate registered since 2013.
In a move to soften the impact on the hospitality sector and boost domestic tourism, the government allowed hotels to reopen to local tourists in May and operate at 25% capacity – provided the properties comply with strict precautionary guidelines. The government has also committed part of the EGP43.11 billion ($2.7 billion) emergency support loan granted by the International Monetary Fund (IMF) to the hospitality sector, in an effort to support the sector further.