Cairo Real Estate Market Overview 2011

This overview provides highlights of the industrial, retail, office, and residential real estate markets, focusing on the key urban location of Cairo, in Egypt.

Office market:
Cairo is a major international corporate base for trading into North Africa and the Middle East. However, with office occupancy rates close to 100%, many international companies are currently in sub-standard accommodation. There is a huge development programme underway, with up to 2 million sq m of offices due to come to the market over the next few years, but this is not anticipated to lead to a major oversupply of space, due to the high pent-up demand in the market and current severe shortage of Grade A stock. Prime office rents in the city centre are around US$50 per sq m per month, but are only about half this level in the out-of-town market.

Retail market:
The growth of the middle and upper classes in Egypt has fuelled the expansion of the retail market in recent years and there has been a proliferation of shopping centre development. There is a huge amount of stock coming to the market in developments including Uptown Mall, Cairo Festival City, Sorouh City, Mall of Egypt, Mena Mall and Westown. By 2015, an additional 2 million sq m of space is expected to be delivered, expanding the market by 400%.

Industrial market:
Since the creation of the Industrial Development Authority (IDA) in 2005 there has been a huge drive to attract new industrial activity in Egypt. Around Cairo this has mainly been focused on the locations of 6th October City and 10th Ramadan City. Government land is available in the range of $15-25 per sq m, about half the typical price of other commercial land.

Residential market:
The prime residential market has peaked and focus is now on the middle and lower ends of the market. As a result, the size and pricing of units has been reduced to tap into these markets where demand remains buoyant. Despite this, the prime market remains relatively unscathed due to the “cash buyer” nature of the market and because there was little speculative trading. For the lower end of the market to really take off, however, there is a need for the development of a larger and more sophisticated mortgage market.