According to JLL’s “A Year in Review” report on Egypt’s real estate market, tourist arrivals witnessed a 4.5% hike, surpassing the global tourism rate by eight times. From January to October 2023, Egypt’s tourist arrivals soared to 13.9 million, by 36% compared to respective period last year. Last October witnessed the second-highest tourist arrival rate since October 2010, with around 1.3 million tourists , recording 8% increase from respective period the year before .
Country Head of JLL Egypt, Ayman Sami, emphasized the strong position of Egypt’s hospitality market, fueled by the surge in tourist demand and increased investments in leisure and tourism infrastructure. He stated that the new projects in Cairo and other prominent cities drive growth in the hospitality sector and other real estate segments.
Further, the total stock increased by about 23,000 residential units in 2023, reaching nearly 268,000 units. Around 33,000 units, primarily apartments in mixed-use developments, are planned for completion in 2024. Property owners in the secondary market observed higher selling prices and rental rates, particularly during Q4 2023, driven by inflationary pressures and strong demand to hedge against inflation and devaluation. In the 6th of October and New Cairo cities, average sale prices increased by 56% and 63% in Q4 2023, while rental rates rose by 25% and 30%, respectively.
The retail market experienced stable average rental rates across primary and secondary malls throughout Q4, with annual increases of 11% and 9% for both segments, respectively. The average vacancy rate slightly decreased from 10% in Q4 2022 to 9% in Q4 2023.
Meanwhile, average city-wide office rents in Q4 2023 decreased by 3% to $362 per square meter per annum compared to the same period in 2022. The average vacancy rate also increased to 10% from 8% in Q4 2023.
Developers are preparing for possible currency devaluations and subsequent cost inflation expected to continue in 2024. They are adjusting their off-plan sale prices to recover losses and maintain healthy profit margins. As a result, sale in Cairo are anticipated to raise in the short to medium term.
