The residential rental market in the Egyptian capital Cairo saw a positive performance in the initial quarter, with some projects surpassing market performance, as per the leading real estate investment and advisory firm JLL.
In Q1 2021, Cairo’s residential market witnessed the completion of about 4,000 units, summing up the total residential stock to about 212,000 units.
An extra 21,000 units are required to be delivered before the year’s over, expressed JLL in its Q1 2021 Real Estate Market Overview report.
Moving forward, JLL expects the sector to see a rise in demand following the recent report by the Central Bank of Egypt (CBE) that it has launched a new home loan finance program with a 3% interest rate, it further said.
“This is mainly due to the increase in demand for newer gated communities which are now becoming more mature and livable,” remarked Ayman Sami, the Country Head, JLL Egypt.
“The overall rental market increased marginally by 2% and 1% annually in 6th of October and New Cairo, respectively,” he noted.
The new home loan financing programme is directed at low and middle-income Egyptians to help their ability to own housing units through long-term loans of up to 30 years with less interest that do not surpass 3%, provided Sami.
“Once activated, this initiative would not only significantly increase demand in these income segments, but it would also instigate private developers’ participation in the development of low-to-middle income housing units in the future,” he added.
On the office market, JLL said it had seen a slight uptick in renting inquiries for adjusted offices and more modest fitted-out units by small-to-medium enterprises (SMEs) and new market participants.
Bigger multinational and blue-chip organizations, however, keep on confronting vulnerabilities as far as area requirements because of the remote and flexible working plan executed since the beginning of Covid-19.
From a performance point of view, asking rents in Cairo stayed static annually at $325 per sq m while vacancy rates fall to 9% in Q1 2021, provided by the expert.
On the retail market, JLL featured that it had witnessed that strip retail with an open-air setup carried on to attract most demand and footfall.
Therefore, landlords in secondary malls were able to raise their asking rents by about 5% in the initial quarter of 2021, whereas rental rates in primary malls stayed flat on yearly basis due to lesser activity in super-regional and regional malls.
Similarly, JLL said its average vacancy rates remained stable at 11% in Q1 2021.
As part of efforts to help the growth of e-commerce in Egypt and facilitate the movement of retailers into omnichannel retail, few landlords are rising using the vacant and more spaces in malls to help as fulfillment centers for online purchases, it further provided.