The real estate market in Egyptian capital Cairo has witnessed an ongoing uplift in performance across most sectors with the residential sector, in particular, benefiting from increased sale prices in 2018, said leading property expert JLL.
Increased investor confidence is evident across the residential market with developers reporting positive sales performances and construction of the New Capital City fast on track, stated JLL in its report.
Egypt’s GDP growth is expected to accelerate to 5.3 per cent in the 2017/2018 fiscal year compared to 4.2 per cent in the previous year, said the property expert citing the Oxford Economics data.
According to JLL, this accelerated growth was manily due to stronger industrial production, recovering tourism, and increased investment.
"The second quarter shows that there has been a notable shift in demand from the secondary sales market to newly developed units being offered directly from developers, as the former has become relatively less affordable," explained Ayman Sami, JLL’s country head in Egypt.
Sami pointed out that Egyptian developers have been able to capitalise on this trend by launching smaller, more affordable units on competitive payment plans.
"Although the real estate market remained relatively unchanged in Q2, the ongoing positive sentiment and strong performance across most sectors continue to provide attractive market conditions for further investment, in line with the government’s ongoing focus on economic development," he stated.
According to Sami, the strongest performing sector of the market was hospitality "mainly helped by the tremendous government efforts to boost visitor arrivals through global touristic campaigns and improved security which led to increasing flight arrivals."
"Hotel occupancies and room rates increased dueing the second quarter with performance expected to receive a further boost from the opening of the long anticipated Grand Egyptian Museum and the new Sphinx international airport later in 2018," he added.
On the office market, JLL said with a relatively stable second quarter performance, the sector is posed close to the bottom of its cycle, with some upside potential for rentals over the next 12 months.
Interestingly, several residential developers have announced new office projects for sale on extended payment terms as they seek to replicate the success of residential launches, observed Sami.
On the 2018 outlook, JLL said it remains positive overall for the residential, office, and tourism sector owing to overall economic growth and stable political conditions.
"There has been little change in retail rentals in the second quarter, but continued confidence among investors is contributing to positive sentiment," remarked Sami.
"Developers continue to seek optimising their centres through incorporating retail concepts, in line with the constantly changing preferences of their target clients," he added.-TradeArabia News Service
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