Cairo’s residential rental market witnessed a positive performance in the first quarter (Q1) of 2021, with some projects surpassing market performance, as per the JLL’s Q1 2021 Real Estate Market Overview report provided on Saturday.
“This is mainly due to the increase in demand for newer gated communities which are now becoming more mature and livable,” commented Ayman Sami, Country Head, JLL Egypt, “The overall rental market increased marginally by 2% and 1% annually in 6th of October and New Cairo, respectively.”
In Q1 of 2021, Cairo’s residential market witnessed the completion of about 4,000 units, getting the total residential stock to about 212,000 units.
An additional 21,000 units are evaluated to be provided by the end of the year and moving along, JLL expects the sector to see a rise in demand. This follows the recent report by the Central Bank of Egypt (CBE) that it has launched a new mortgage finance programme with a 3% interest rate.
The new home loan financing program is aimed at low and middle-income Egyptians, to help their capacity to own housing units through long-term loans of as long as 30 years, with low revenue not surpassing 3%.
“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,” added Sami.
The office market saw a little increase in leasing inquiries for services offices and smaller fitted-out units by small-to-medium enterprises (SMEs) and new market entrants.
Greater global and blue-chip organizations, however, keep on confronting vulnerabilities in terms of area requirements. This is because of the distant and flexible working plan executed since the beginning of the novel (COVID-19) pandemic.
From a performance point of view, asking rents in Cairo stayed stable every year at $325/sqm, while opportunity rates dropped to 9% in Q1 of 2021.
The office market in Cairo saw no new consummations in the principal quarter of 2021, leaving them all-out office space stable at 1.4 million sqm of gross leasable area (GLA). Around 366,000 sqm of GLA is relied upon to convey over the remaining nine months of 2021, the report noted.
Cairo’s retail market witnessed 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 rents by about 5% in Q1 of 2021. Rental rates in primary malls stayed flat on an annual basis, due to lesser activity in super-regional and regional malls.
“Almost 35,000 sqm of retail space was delivered in the first quarter of 2021, bringing the total retail stock to around 2.4 million sqm,” the report said, “An additional 145,000 sqm of GLA is expected to be completed by the end of 2021.”
Additionally, normal opening rates stayed stable at 11% in Q1 of 2021. A few landowners are progressively using the empty and additional areas in shopping centers to fill in as satisfaction places for online buys. This comes as a component of efforts to help the development of online business in Egypt and work with the development of retailers into omnichannel retail.
Cairo’s hotel market kept up the absolute supply of hotel keys at around 27,000 in Q1 of 2021. Almost 900 hotel keys are relied upon to be conveyed before the year’s over.
The report features that the area has incredible development potential given the solid supply pipeline and the broadened existing item and administration contributions.
Sami noticed that some hotel operators are perceiving these chances and have communicated their advantage in improving and developing their resource portfolio around there.
This is relied upon to help market certainty and speed up the recuperation of the hotel market in the long term, he added.