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Community, neighborhood malls back Cairo’s retail market: JLL

Community, neighborhood malls back Cairo’s retail market: JLL

ArabFinance: The retail sector in Cairo gained momentum during the July-September period of 2020, as a result of the growing demand from food and beverage tenants for smaller neighborhoods and community centers with an abundance of outdoor space, according to JLL’s third quarter (Q3) Cairo Real Estate Market Performance report.

Many retail lease contracts were reverted to original commitments prior to the COVID-19 crisis during Q3, leading to a rise in rents in primary and secondary malls by 10% and 3%, respectively, according to JLL.

The demand for regional and super regional malls remained subdued despite signing new leases, while retailers proceeding with their expansion plans in specific prime areas, JLL added.

“The pandemic has brought with it many implications to the real estate sector with the retail market having been affected the most. […] Shopping centers need to evolve to become more than a place to shop,” JLL’s Country Head of EGypt Ayman Sami commented.

Meanwhile, The St. Regis Cairo in downtown was “the first major hotel completion” in the capital for 2020, according to JLL. A total of 366 keys were added to the overall stock, with around 440 more keys scheduled for completion during the fourth quarter of 2020.

Egypt has been open for tourism since July 1st, when airports nationwide resumed operating, yet “low levels of tourist arrivals have continued to pose downward pressure on Cairo’s hotel sector,” JLL said.

The report indicated a 33% occupancy level in the year-to-August period, while average daily rates and revenue per available room declined by 16% and 65%, respectively, to record $83 (EGP 1,303) and $25 (EGP 392.66) over the same period.

Cairo’s residential market registered new additions in Q3 this year, maintaining the total stock at 159,000 units, JLL noted.

“Sales prices in the primary market remained stable as developers continued to attract demand through extended payment plans, while the secondary market declined by 2% and 9% on an annual basis,” according to the report.

Egypt’s construction sector was predicted to become the largest across the region by 2029 in terms of value, the Cabinet said, according to a Fitch Solutions’ BMI research.

 

*At press time, the conversion rate is $1 = EGP 15.70

 

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