Cairo Real Estate Market Overview Report – Q1 2018
Sentiment towards both the economy and the real estate market has picked up over the first quarter of 2018. Following a wave of social and economic reforms over the past 2 years, the markets are now benefiting from more stable conditions. Market shocks from the currency devaluation are gradually dispersing while a number of the recent regulatory changes are beginning to have a positive impact. The first quarter of the year witnessed generally stable real estate activity as the market adjustment to new norms.
The presidential elections have concluded, with the current regime extending its ruling term. President Abdelfattah El Sisi has economic development on the top of his agenda with extensive support for mega projects, increasing foreign direct investment and implementing social reforms. The successful outcome for the most supported party will contribute to the economic stability and will further increase investment appetite in the real estate sector.
Residential sale prices have continued to increase, while the leasing market has been less buoyant. The additional competition being experienced in many segments of the residential market is regarded as a generally positive sign and there are no indications of a serious oversupply developing. Future supply continues to be focused mainly in the satellite cities, especially those to the east of Cairo. Consumers are becoming more informed on market conditions and trends and are increasingly selective in their preferences.
The office sector has experienced relatively stable performance over Q1, with demand mainly geared towards consolidation within fully integrated office parks, which has resulted in the announcement of a number of new business districts across the city. While rents have increased in New Cairo in Q1, rents in the CBD and West Cairo have remained unchanged. Office rentals are expected to pick up further in the medium term due to the continued improvement in business sentiment.
The retail sector was the most negatively impacted by the currency devaluation and other economic reforms over the past 2 years, with an average decline of 45% in rents in USD terms being recorded during 2017. This situation has now stabilised and some of these declines are being recouped, with rentals increasing by 10% in USD terms in Q1 2018. There remain opportunities for retailers to expand their footprint and for developers to physically reshape their malls in line with emerging consumer trends.
The hotel and tourism sector continues to see further investment in both new and existing projects as the market benefits from increased tourist arrivals following the EGP devaluation. The country’s strong potential and continued government support, and spending on security & tourism infrastructure is contributing to a more positive investment climate in this sector.
Craig has over 20 years’ experience providing clients with quality advice on real estate market conditions in the UK, Asia Pacific and the Middle East. With a background in urban economics and spatial planning, he has particular expertise in the areas of property market research, development consultancy, transport related infrastructure projects and corporate real estate.
Since moving to the UAE in 2006, Craig has authored over 50 research reports on different aspects of the MENA real estate market. He has also provided market research and consulting services to major investor, developer and government clients and has appeared as an independent real estate expert before the Dubai International Arbitration Centre (DIAC).
Craig holds a Bachelor of Arts in Economics & Geography from Lancaster University and an M.Phil in Environmental Planning from Reading University (UK).