The first quarter saw strengthening demand for offices in Cairo from both local and international firms, according to JLL’s latest market overview report released today.
There were no new office projects delivered in Q1 in Cairo, and JLL’s report highlights there were healthy levels of leasing activity in good quality office buildings. This was particularly seen in locations in close proximity to developments with strong retail and F&B offerings, such as 5A By The Waterway and Cairo Festival City.
JLL also said close to 260,000 sq. m. of office floor space is scheduled to be completed by the end of this year. However, some companies are likely to take a ‘wait-and-see’ approach in the coming months before committing to new office space.
Average asking rents in Cairo grew by around 4% year-on-year in Q1 2022, largely as a result of a 10% jump in prime rents to around USD 460. Over the same period, the capital’s office vacancy rate edged up to 10%.
In residential, the first three months of this year saw the completion of around 4,000 residential units, bringing Cairo’s total stock to 231,000. Almost 21,000 units are expected to be delivered over the remainder of this year.
In annual terms, rents rose by 2% in both 6th October and New Cairo in Q1.
“If the handover of projects is delayed as we expect, demand for rental properties should rise as home-owners await the delivery of their units,” said Ayman Sami, Country Head, JLL Egypt.
The hospitality sector continued to improve, and with the completion of the Crowne Plaza West Cairo – Arkan, around 187 hotel keys were delivered in Q1 bringing Cairo’s total hotel stock to around 28,000 keys. Almost 600 keys are expected to be delivered by the end of this year as well.
“The currency devaluation is likely to help accelerate the rate of recovery in the capital’s hotel sector, especially for 4 and 5-star properties, as international visitors benefit from the favourable exchange rate,” said Sami. “As a result, occupancy rates should rise but this might be at the expense of lower average daily rates.”
In retail, the addition of around 32,000 sq. m. of retail space in Q1 brought Cairo’s total stock to almost 2.9 million sq. m.
Multiple new international F&B brands opened their outlets in Cairo and various social events and new entertainment concepts also provided a notable uplift to footfall across projects such as 5A By The Waterway.
Source: Four Communications