Cairo real estate market confidence returns, according to new JLL Report | Cairo real estate market confidence returns, according to new JLL Report -
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Cairo real estate market confidence returns, according to new JLL Report

: Wednesday, July 23 - 2014 @ 12:06

JLL, the world’s leading real estate investment and advisory firm, has released its second quarter (Q2 2014) Cairo Real Estate Overview report, which provides the consultancy’s perspective on the latest trends in the office, residential, retail and hotel sectors in the Cairo market.

Commenting on the report, Ayman Sami, Head of Egypt Office at JLL MENA,said: “The improved political and economic stability has resulted in a return in confidence in the real estate market. The untroubled passage of the recent presidential election has resulted in confidence that the new government will be able to enact some of the tough decisions required to restore growth in the Egyptian economy. The clearest evidence of this is the decision to follow the IMF recommendation and gradually remove subsidies on energy between now and 2017. Accordingly, we are witnessing the resumption of a number of projects previously placed on hold, such as the approval for Palm Hills Development Company (PHDC) to commence with the development of two land plots totalling 57 acres in East Cairo as an integrated residential project (October Village Garden).”

Sector summary highlights, Cairo Market Overview, Q2 2014:
• Residential:While the residential market has been the strongest performing sector of the Cairo market over the past quarter, this improvement has not been universal. Villas have generally outperformed apartments, with the strongest increase (17%) recorded in New Cairo, in contrast sale prices have declined marginally over the quarter in 6th October. While villa rents have increased over the quarter, apartment rentals have declined in both New Cairo and 6th October.
• Office:There has been no major change in the Cairo office market over the past quarter. Rentals have remained relatively unchanged and while demand remains active, with a number of known enquiries from international occupiers for additional office space in New Cairo and 6th October, this demand has been offset by new supply, resulting in an increase in vacancies levels to around 25% (from 21% in Q1). Around 60,000 sqm of Grade A office space was completed in Q2, increasing the total stock across greater Cairo to around 885,000 sq m.
• Retail:While average retail rents have remained largely unchanged over the quarter (ranging from USD720 to USD1,380 per sq m), owners of some prime malls have increased their asking prices during this quarter, encouraged by the entrance of new brands to the market and retailers seek to trade up into those better quality locations that offer security, parking and easy access. The retail market has remained active with the soft opening of the Porto Cairo Mall in New Cairo during Q2.
• Hotel: The hotel market is currently positioned close to the bottom of its cycle. The level of tourist arrivals in the first 4 months of 2014 (Jan to April) declined by around 26%, with the number of hotel nights declining more significantly (-39%) compared to the same period of 2013. With increased political stability, and the government increasing its efforts to market Egypt’s tourist attractions overseas, it is expected that tourist arrivals will increase over the second half of 2014, resulting in improved performance of the Cairo hotel market. Occupancy rates in Cairo hotels have fallen to 38% (YT June 2014), well below the 58% recorded in the same period of 2013. Surprisingly, this trend has not affected the average daily rates negatively, with ADRs increasing significantly in comparison to the very low levels experienced over the first six months of 2014, to now stand at around USD100.

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Wednesday, July 23- 2014 @ 12:06 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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