The residential rental market in Egyptian capital Cairo witnessed positive performance in the first quarter, with some projects exceeding market performance,according to leading real estate investment and advisory firm JLL.
In Q1 2021, Cairo’s residential market saw the completion of around 4,000 units, bringing the total residential stock to around 212,000 units.
Going forward, JLL expects the sector to witness a boost in demand following the recent announcement by the Central Bank of Egypt (CBE) that it has launched a new mortgage finance programme with a 3% interest rate, it added.
"This is mainly due to the increase in demand for newer gated communities which are now becoming more mature and livable," remarked Ayman Sami, the Country Head, JLL Egypt.
"The overall rental market increased marginally by 2% and 1% annually in 6th of October and New Cairo, respectively," he noted.
The new mortgage financing programme is directed at low and middle-income Egyptians to support their ability to own housing units through long-term loans of up to 30 years with low interest that does not exceed 3%, said Sami.
"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," he added.
On the office market, JLL said it had witnessed a slight uptick in leasing enquiries for serviced offices and smaller fitted-out units by small-to-medium enterprises (SMEs) and new market entrants.
Bigger multinational and blue-chip companies, however, continue to face uncertainties in terms of area requirements due to the remote and flexible working scheme implemented since the start of Covid-19.
From a performance perspective, asking rents in Cairo remained stable annually at $325 per sq m while vacancy rates dropped to 9% in Q1 2021, satted the expert.
On the retail market, JLL pointed out that it had seen that strip retail with an open-air setup continued to attract most demand and footfall.
Therefore, landlords in secondary malls were able to increase their asking rents by almost 5% in the first quarter of 2021, whereas rental rates in primary malls remained flat on an annual basis due to lower activity in super-regional and regional malls.
Similarly, JLL said its average vacancy rates remained stable at 11% in Q1 2021.
As part of efforts to support the growth of e-commerce in Egypt and facilitate the movement of retailers into omnichannel retail, some landlords are increasingly utilizing the vacant and extra spaces in malls to serve as fulfillment centers for online purchases, it added.-TradeArabia News Service