Real Estate Overview Report Greater Cairo | Real Estate 2015
Accelerating success.
Greater Cairo Real Estate Market Overview
September 2015
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
ian.albert@colliers.com
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Introduction
Real estate has shown resilience despite political turmoil
witnessed across the country over the past four years. Many
investors capitalised on real estate (primarily in the residential
market) as a hedge against currency risks and inflation with
the concurrent rise in the values of property acting as a
buffer. Identifying this growing market segment developers
successfully focused on delivering housing units targeting the
upper-­mid and high-­end consumer groups.
Since 2014 however, Cairo witnessed increased consumer
confidence and economic stability driven partially by
externally supported ambitious government economic centric
investments, aimed at the country’s infrastructure, and the
announcement of a number of new real estate projects.
This has translated into renewed investor confidence and in
positive inflows into the retail and tourism markets.
Ian Albert
Regional Director (MENA)
Valuations and Advisory
Colliers International
ian.albert@colliers.com
The retail market which was historically dominated by
traditional souks and high street retail continues to transform,
reflecting the changing society and sentiment. In particular
Greater Cairo has witnessed a rapid growth in international
standard shopping malls and more recently a focus towards
high-end retailing.
Tourism has also witnessed a revival with significant
increases in visitors resulting in a positive impact on Egypt’s
hotel market. Although the number of inbound tourists
remained constant in 2014 when compared with the previous
year, total tourism spending surpassed 2008 figures. High
occupancy rates and increased average length of stay
across hospitality establishments have not gone unnoticed
by hotel investors/ operators, with a number of high profile
international brands such as the Ritz Carlton, St Regis and
the Westin entering the Cairo market further supporting the
positive sentiment.
Investment extends beyond retail and hospitality with mega
projects such as Cairo Airport City and the Suez Canal
Expansion driving economic growth and the consequential
demand for additional housing, retail and social infrastructure.
Egypt’s large consumer base, positive investor confidence,
economic climate that encourages taxation breaks and low
labor costs, together with a growing middle class, underline
optimistic trends benefitting Greater Cairo’s real estate market.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Residential
Market Overview
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
The Residential Market
Appreciating house prices have driven investments towards
Cairo’s undersupplied residential market, as the best hedge
against high inflation rates and risks of currency devaluation.
Upper-­mid and high income residents with sufficient
disposable incomes were targeted by key developers, and
Cairo witnessed a significant increase in upper-­mid and high
income units.
Mansoor Ahmed
Director | Development Solutions
Colliers International
mansoor.ahmed@colliers.com
Although the volume of residential transactions remain
subdued due to the on-­going political instability, investor
confidence has increased significantly since 2014. In contrast
to other regional markets such as Dubai and Abu Dhabi where
price appreciation has been driven primarily by a combination
of expatriate demand and investor speculation, we see that
the upward movement in Greater Cairo’s housing market is
underpinned by sustained local demand and un-­met supply
fundamentals. Moreover, the favourable demographics in
Egypt -­the young population profile composing of 32%
under the age of 15, suggests a continuously growing
residential market.
Overall market performance across Cairo’s residential sales
and rental market have improved significantly since 2013.
Sales prices across apartments and villas increased by 27%
and 64% respectively during the said period. Average rental
rates on the other hand increased by 14% across apartments,
while villas witness a marginal drop during the same period.
This marginal decline in villa prices was primarily driven by
the drop seen in Zamalek, while prices increased across
other areas.
Based on current trends, we estimate that the residential
market requires an additional 500,000 units by 2020.
This constitutes to approximately 90,000 – 100,000 units
every year. Based on historic trends however, average new
supply released into the market annually is approximately
45,000 units, meeting only 50% of the required housing units.
Given the significant income disparity, residential demand
in Greater Cairo is clearly delineated by income groups,
with nearly 70% of residents who can afford unit prices
below US$ 58,000. The movement of wealthy and upper-­
middle income Cairenes to the new communities in order to
escape congestion in central Cairo on the one hand, and the
continuous housing needs of Cairo’s mid-­income segments on
the other, constitutes the defining demand drivers of the
local residential real estate market.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
SECTOR DEFINITION
CAGR 2%
25
Population (Millions)
Residential Sector
Overview
GREATER CAIRO POPULATION ESTIMATES
In a city market with over 17 million residents, and a
population growing at 2% every year, the need for housing
units are constant on the rise.
20
15
10
5
2010
2011
2012 2013 2014 2015 2016
2017
2018 2019 2020
Source: Colliers International Research and Analysis
There is also notable a relocation of upper-middle and high
income households towards the new communities such as
New Cairo, 6th of October City and Al Obour City in order to
escape congestion in central Greater Cairo.
DEMAND FOR ACCOMMODATION
BY HOUSING LEVEL IN GREATER CAIRO
77%
Middle
16%
Economic
Housing
Housing
DEMAND
Based on population growth rates, on average 90,000 –
100,000 units are required every year to meet the demand
generated by new households alone.
5%
2%
Low Cost
Housing
The pronounced housing need however is skewed towards
more affordable housing for Greater Cairo’s middle income
residents, representing 77% of Greater Cairo’s population.
Luxury
Housing
Source: Colliers International Research and Analysis
Income levels of this majority range between US$ 5,000 and
US$ 65,000 per annum, and affordability is limited to units
priced below US$ 151,000.
RESIDENTIAL SUPPLY – ANNUAL COMPLETION
80
Low Cost Level
SUPPLY
In 2014, the total existing residential supply exceeded
5.2 million units.
Units (Thousands)
Economic Level
On average, 45,000 new units enter the residential market
annually, with a high concentration on economic housing
projects sponsored by the government.
Middle Level
60
Upper Middle Level
Luxury Level
40
20
2009
2011
2010
2012
2013
Source: Colliers International Research and Analysis
Close proximity
to airport has
effected a notable
One of
central Cairo’s
most upmarket
locations
Increasingly housing
upper-middle
income demographic
Upmarket core
of 6 of October
City are the gated
communities such
as Palm Hills and
Beverley Hills
th
6th of October
7
as high-income
earners relocate
elsewhere given
chronic congestion
problems
business
Zamalek
Mohandessein
Primarily
residential area
catering to the
high income
segment
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Heliopolis
orientation
Maadi
Nasr City
New Cairo
Primarily
targeting
upper-­mid and
high-­end
residents
2014
Residential
Sector Overview
MARKET GAP
MARKET GAP - 2020
20
6
Million
Population
Based on the current trends, the residential market
requires an additional of 500,000 units by 2020.
With government sponsored programs aimed at
economic housing, and key developers launching
projects targeting high-­income residents, the market
gap for affordable housing targeting the majority of
middle income residents remains unmet.
MARKET PERFORMANCE
Average sales prices for apartments and villas
increased by 27% and 64% respectively since 2013.
Average rental rates for apartments increased by
14% during the same period. The most significant
increases were observed in 6th of October City and
in Heliopolis.
Unlike apartments, average rental for villas have
witnessed a drop of 4% since 2013. This drop is
driven by falling prices in Zamalek, with prices rising
in the other areas.
Million
Units Additional
Supply Required
RESIDENTIAL MARKET PERFORMANCE
Sales Market
Rental Market
27%
64%
14%
-4%
Change
2013-2015
Change
2013-2015
Change
2013-2015
Change
2013-2015
Average
Apartment
Sales Price
Average
Villas
Sales Price
Average
Apartment
Rent
Average
Villa
Rent
US$ 55/m²
US$ 90/m²
US$ 870/m²
US$ 2,000/m²
Source: Colliers International Research and Analysis
Per Annum
Per Annum
POTENTIAL OPPORTUNITIES
Based on the market gap of each housing category, the following
opportunities are highlighted.
MARKET OPPORTUNITIES
Based on households income levels, the majority
of demand exists across middle income residents
(77%), although there still remains unmet demand
for upper-mid/ luxury housing units, given the
number of high-net-worth wealthy Egyptians in
the market.
Low income housing units also remain
undersupplied, although not as pronounced as the
market gap across the middle income sector.
Upper-­mid /
Luxury Housing
Targeting households with annual income of
Middle
Housing
Targeting households with annual income of
Low Cost
Housing
Targeting households with annual income of
Source: Colliers International Research and Analysis
8
0.5
Million
Units Housing
Demand
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
US$65,000 – US$125,000
US$10,000 – US$25,000
US$1,750 – US$2,500
Retail Market
Overview
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
The Retail Market
Driven by significant income disparities, Cairo’s retail market
is fragmented between souks, high streets and international
quality shopping malls.
Historically, the market’s growth has been cumbersome and
cautious, due to slow economic growth and high tariffs on
imported goods. However, over the past decade, the market
landscape has witnessed major transformations, supported
by substantial economic and tax reforms. Consequently,
consumer confidence increased notably, which triggered the
interest of regional and international retailers to enter the
market and capitalise on the large consumer base.
Stuart Gissing
Regional Director
Colliers International
stuart.gissing@colliers.com
The average rental rates across Cairo’s shopping malls range
between EGP 4,500 (US$ 625) per m² per annum and EGP
8,500 (US$ 1,190) per m² per annum, with established Grade
A shopping malls operating close to full occupancy.
The increasing competitive landscape however, has seen
Grade B malls experiencing low occupancy -­up to 40%
available lettable area. Rents are expected to reflect
occupancy levels, with average rents across established,
well positioned shopping malls set to increase and maintain
a premium over less competitive malls.
Generations X and Y represent 56% of Greater Cairo’s total
population. The importance of this demographic is their
aspiration for lifestyle products and international brands.
This increasing consumer demographic also accounts for
the highest dwell time, and therefore F&B/ dinning and
entertainment products are some of the key retail components
to be factored into next generation shopping malls.
Colliers expects Greater Cairo’s organised retail market
to remain undersupplied over the short to medium term.
According to existing market sentiments, the market will be in
a position to absorb an additional 1.6 million m² GLA of new
supply by 2020. Increasing catchment population around new
residential communities will also see an offshoot demand for
a number of community shopping malls to be developed.
It is expected that, given Cairo’s growing population, young
demographics and a growing middle class, primary grade
lifestyle shopping malls with family entertainment components
will attract high visitor volumes, occupancy rates and rentals
compared to less competitive malls.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Retail Sector
Overview
BREAKDOWN OF HOUSEHOLDS’ RETAIL SPENDING
Retail
Spending
51%
Food &
Non-Alcoholic
Drinks
SECTOR DEFINITION
Tobacco
& Alcoholic
Drinks
67%
Being one of the largest retail market in the region, the
consumer base for Greater Cairo alone, exceeds 17 million,
making it an attractive market for international and
regional retailers.
Shopping malls have successfully attracted international
brands, meeting latent demand from wealthy Egyptians,
and offer a shopping experience modelled on international
retailing standards with compiled tenant mixes, food courts,
entertainment facilities, and anchor tenants.
7%
Restaurants
& Hotels
Furnishing &
Home
8%
Clothing &
Footwear
8%
10%
Source: BMI; Colliers International Analysis
RETAIL DEMAND
2 600 000
DEMAND
CAGR 3%
GLA (m²)
2 400 000
Significant income disparities have resulted in consumers
being highly price-­sensitive and with traditional shopping
habits, on one hand, and organised shopping mall activity
on the other.
2 200 000
2 000 000
1 800 000
Currently, the demand for organised retail in Greater Cairo is
estimated at 2.2 million m² GLA, and is expected to reach 2.4
million m² GLA by 2020.
2014
2015
2016
2017
2018
2019
2020
Source: Colliers International Research and Analysis
RETAIL SUPPLY -­ANNUAL COMPLETION
SUPPLY
2018
By end of 2015, the total organized retail supply in Greater
Cairo is expected to reach 1.1 million m² GLA.
GLA (m²)
2017
An additional supply of 600,000 m² GLA is scheduled to come
into the market over the next five years, provided construction
timelines are met.
2016
2015
2014
50 000
100 000
150 000
200 000
Source: Colliers International Research and Analysis
Golf City Mall
Designopolis Mall
Dandy Mall
Hyper One
Mall of Arabia
Dolphin Land Mall
Cityscape Mall
11
The District
Nile City
Towers
As highlighted in
the map, 6th of
October City and New
Cairo hold the majority of
the existing retail supply
across different retail
formats within Greater
Cairo, given the availability
of land supply.
Sun City Mall
First
Mall
City Stars
Emerald
Mall
Rehab Mall
(1 & 2)
Porto Cairo
Cairo Festival City
Downtown Mall
Maadi
City Centre
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
250 000
Retail Sector
Overview
MARKET GAP
1.5
1.3
million m²
GLA
MARKET GAP
1
million m²
GLA
2010
million m²
GLA
2015
The retail market is currently undersupplied by approximately
1.3 million m² GLA.
2020
Despite an additional supply of 600,000 m² GLA expected
to come online over the next five years, the market is still
expected to remain undersupplied by 1 million m² GLA
by 2020.
AVERAGE RENTAL RATES FOR KEY
SHOPPING MALLS (US$/M²/ANNUM)
MARKET PERFORMANCE
100%
80%
60%
40%
20%
0%
Average
Galleria40
Sky Plaza
Porto Cairo
Mall of Arabia
Centre
Maadi City
Dandy Mall
City
500
Golf City Mall
Occupancy levels for Grade A shopping malls range between
80% to full occupancy.
US$/m²/Annum
1 000
Cairo Festival
City Stars, Cairo Festival City and Mall of Arabia are achieving
the highest rentals, while secondary malls such as Golf City
Mall and Sky Plaza are witnessing some of the lowest
lease rates.
Occupancy Rate
1, 500
City Stars
The average rental rates in key shopping malls range between
US$408 per m² per annum and US$1,200 per m² per annum.
Source: Colliers International Research and Analysis
MARKET OPPORTUNITIES
Largest demographics are between the
ages of 15 – 64
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DEVELOPMENT TIPS
Target
Young
Consumers
Young consumers (20-­39 years of age)
of total population, driving
represent
demand for brands coming into the market
Community
Retail
Demand for retail components within
residential communities to meet everyday
needs of the catchment population.
Lifestyle
Retail
The higher proportion of generation X & Y
consumers and their preferences to spend
more time dining and entertaining outside,
make it more likely for the F&B and the
entertainment components within shopping
malls to increase
47%
85-100
65-85
45-65
30-45
15-30
12-15
9-12
6-9
3-6
1-3
0-1
Given Cairo’s growing population and composition of
generations X & Y, primary grade lifestyle shopping malls
complete with family entertainment components will attract
high visitor volumes, occupancy rates and rentals.
Source: Colliers International Research and Analysis
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Hospitality Market
Overview
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
The Hospitality
Market
In the first half of 2015, the number of room nights sold in
Egypt’s key cities (Cairo, Alexandria, Hurghada, Sharm El
Sheikh, Luxor) grew by 13% year-­on-­year. Cairo in particular
saw a 39% increase in demand, while Hurghada experienced
a decrease of 7% due to strong competition with Sharm
El Sheikh.
Filippo Sona
Director | Head of Hotels
Colliers International
filippo.sona@colliers.com
In another positive move for the tourism industry, August
2015 saw Germany lift its travel ban on all tourist destinations
in Egypt. The lift is expected to lead to higher visitation figures
from this key source market, which contributed approximately
800,000 tourists and EGP 2 billion (US$255 million) in
revenues during 2014. Germans’ length of stay is also
expected to increase from its current average of one week,
slowly returning to the two week stays witnessed in 2010.
In addition to the traditional source markets, the ministry of
tourism is aiming to diversify its demand base, for instance
by targeting 200,000 Iranian tourists by 2016, and 1 million
Indian tourists by 2017. The tourism authorities are bullishly
targeting a total 20 million tourists by 2020, up from
9.8 million in 2014.
The improved confidence in the hotel industry is apparent
through the recent signings of international hotel brands, such
as the Swissotel Katameya in Cairo, the DoubleTree by Hilton
in Ain Al Sokhna, and the Westin Resort in Soma Bay. With
the recovery in full swing, hotel investors interested in Egypt
are now reaching their highest level of confidence in the last
four years.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Hospitality Sector
Overview
HOSPITALITY LAND SCAPE OF CAIRO
70%
5 STAR
20%
4 STAR
SECTOR LANDSCAPE
Egypt relies heavily on its tourism sector which accounted for
over 5% of the nation’s GDP in 2014.
Despite benefitting from a wide tourism market, Egypt’s
internationally branded hotel supply is heavily weighted
towards the 5-star segment providing various hotel
development opportunities across other segments.
10%
3 STAR
Source: Colliers International
PURPOSE OF VISIT TO CAIRO
70%
CORPORATE
DEMAND
With the exception of the Pyramids market, all other hotel
submarkets of Cairo rely on corporate travelers.
9%
FIT
15%
LEISURE
Hotel demand has seen a notable shift towards eastern (New
Cairo) and Western (6th of October City) Cairo in recent years.
This shift is due to new business parks providing high quality
office spaces and thus appealing to high-profile companies.
2%
4%
MICE/
OTHERS
Groups
Source: Colliers International
SUPPLY
PROJECTED HOTEL SUPPLY | NO. OF KEYS
Supply remained stable between Q2 2014 and Q2 2015.
However six hotels are expected to enter the market by year
end 2015, operated by Marriott International, Starwood Hotels,
Time Hotels, Kempinski, and Hilton Worldwide.
CAGR 5%
Internationally branded supply currently represents 64% of
Cairo’s hotel market, of which 86% are 5-star rated.
Q2
2014
Q2
2015
Source: Colliers International
Note: Includes 3,4 and 5-star quality supply
FY
2015
(f)
FY
2016
(f)
Heliopolis
Zamalek
Nasr City
Mohandessein
New Cairo
Maadi
6th of October
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
FY
2017
(f)
Hospitality Sector
Overview
ADDITIONAL SUPPORTABLE ROOMS
10,540
2,018
14,321
MARKET GAP
Colliers expects a 7.5% average annual increase in Cairo’s
hospitality demand over the next five to ten year period, in-­
line with Euromonitor’s tourism projections for Egypt.
Projected
Keys
2020
2015
KPIs | YOY % CHANGE
MARKET PERFORMANCE
Cairo’s hospitality demand is mainly generated by Egyptian
and GCC nationals, accounting for 78% of total guest nights.
ADR
MARKET OPPORTUNITIES
+26%
-­14%
+6%
+43%
Occ 50%
+­29%
+­1%
+8%
US$117
OCC
Growth in corporate demand has fueled Cairo’s hotel market
performance increase in Q2 2015.
+26%
Q2 2013 Q2 2014 Q2 2015 Forecast
FY 2015
RevPAR
Source: STR Global, Colliers International
Lack of quality serviced apartments appealing to domestic
leisure tourists represents an opportunity for international
operators to penetrate the market.
16
2025
Source: Colliers International
Given the above mentioned demand growth, Cairo’s hotel
market will need an additional 10,540 keys over and above
the announced supply by 2025.
Due to the large number of currently outdated, and new
forthcoming 5-­star supply, opportunity lies in developing
economy and midscale hotels targeting leisure tourists
visiting the pyramids.
Additional
supportable
keys
Additional
supportable
keys
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
DEVELOPMENT TIPS
Midscale &
Economy
Hotels
In locations near the pyramids
catering to the leisure segment
Upscale
Hotels
In 6th of October City and 5th
Settlement districts to cater to the
Upscale business parks
Serviced
Apartments
Within Ma’adi district to cater to relocating employees
Commercial (Offices)
Market Overview
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
The Commercial
(Office) Market
Cairo is the acknowledged financial and business centre
of Egypt. However the city does not have a clearly defined
Central Business District (CBD) as compared to other
international and regional cities. Grade A office space
currently available for lease within Greater Cairo is located
on major commercial arteries that also hold a significant
proportion of Cairo’s Grade B office stock.
Hassan Abou Alam
Senior Manager | Business Development
Colliers International
hassan.aboualam@colliers.com
High occupancy rates across Cairo’s limited Grade A office
stock has prompted the conversion of ground floor residential
developments into office space as a short-term measure to
counter the undersupplied market. However, this has only
intensified the existing fragmentation of the office market in
Greater Cairo.
The existing undersupplied market is supported by rising
rental levels. The average rental rates of office space in key
areas within Greater Cairo range between US$300 per m²
per annum and US$ 350 per m² per annum in 2015,
increasing 6% since 2014.
We are continuing to witness significant demand for office
space in new cities from local business entities who are
willing to relocate to new offices in less congested areas and
into developments with better build quality. In the absence
of a defined CBD within Greater Cairo, New Cairo has
emerged lately as the capital’s CBD assisted by its location -­
adequate infrastructure, ease of access, proximity to the Cairo
International Airport, and the availability of supporting services.
The market is expected to remain undersupplied in the short
to medium term, with an additional 3.1 million m² NLA of
new supply required by 2020. We expect rentals to remain
strong, especially across developments offering international
build quality in districts away from highly dense areas of the
traditional city centre.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Commercial (Office)
Sector Overview
GRADE A OFFICE DEMAND
SECTOR DEFINITION
Egypt’s economy is the third largest in the Arab world, only
behind KSA and the UAE.
Despite a labour force of 4.5 million, the city remains
fragmented in terms of a Central Business District (CBD).
New Cairo and 6th of October City currently holds
approximately 2 million m² NLA of Greater Cairo’s formal
office supply.
GRADE A OFFICE DEMAND
CAGR 2%
5 100 000
DEMAND
Demand for office space is driven by the volume of workers
who actually require office space.
Tenants are considering New Cairo and 6th of October
City as favourable commercial districts, given their ease of
accessibility and better building quality in comparison with
older areas like Maadi and El Dokki.
NLA (m²)
4 800 000
4 500 000
4 200 000
3 900 000
2014
2015
2016
2017
2018
With demand expected to increase 2% annually, by 2020
cumulative office demand is expected to reach 4.7 million
m² NLA.
2020
GRADE A OFFICE SUPPLY -­ANNUAL COMPLETION
2018
SUPPLY
Provided construction timelines are met, cumulative office
supply is expected to reach approximately 2.3 million m² NLA
over the next 5 years.
2017
NLA (m²)
Based on Colliers research, more than 800,000 m² office
space are expected to be completed over 2015 – 2018. There
are currently no upcoming developments planned for delivery
between 2019 and 2020.
2016
2015
2014
100 000
200 000
300 000
400 000
Source: Colliers International Research and Analysis
Heliopolis
Zamalek
Moving
away from
traditional
business
centres
Nasr City
Mohandessein
New Cairo
Maadi
6 of October
th
19
2019
Source: Colliers International Research and Analysis
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
500 000
Commercial (Office)
Sector Overview
MARKET GAP
2.7
1.8
million m²
NLA
MARKET GAP
2020
AVERAGE RENTAL RATE FOR
GRADE A OFFICES(US$/M²/ANNUM)
AND OCCUPANCY LEVEL
Despite nearly 800,000 m² NLA expected to come online
during 2015 – 2020, the market still requires an additional
480,000 m² of formal office space to be delivered annually in
order to meet market equilibrium in 2020.
Rental Market
MARKET PERFORMANCE
Occupancy Level
70%
80%
6%
Average rental rates of office space in key areas within
Greater Cairo range between US$300 per m² per annum and
US$350 per m² per annum. The highest rentals are achieved
in New Cairo, averaging at US$ 370 per m² per annum.
to % Change
2015
The overall market witnessed an average rental growth of 6%
during 2014 – 2015, underpinned by the limited primary grade
office stock in the market.
Occupancy
Level 2015
Av. Office Rent
US$ 340/m²
Per Annum
MARKET OPPORTUNITIES
Source: Colliers International Research and Analysis
With demand for office space expected to outweigh supply
over the next five years, there is a potential market gap that
can be met by new primary grade office space.
PROMISING MARKETS
90th
6
th
New
Cairo
The demand for commercial lands in
New Cairo is towards the 90th street,
given the majority of commercial
developments are located in the vicinity
6th of
October
City
6th of October City is another key
location for residential and commercial
land demand, based on Colliers ground
research
Source: Colliers International Research and Analysis
20
million m²
NLA
2015
2010
Currently, formal office supply in Greater Cairo is witnessing
a shortfall of approximately 2.7 million m² NLA. This
undersupply is expected to narrow down to 2.4 million by
2020, provided construction timelines are met.
Tenants are likely to prefer locations away from the traditional
city centre in order to avoid severer traffic congestion and
pollution experienced in the downtown areas of Cairo.
2.4
million m²
NLA
Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
Mega Projects Market Insights
A number of national mega projects are planned and
implemented including Cairo Airport City, Suez Canal
expansion, and New Capital City that are likely to drive
demand for additional real estate products.
Suez Canal
Expansion
29,000 mi²
Area of proposed
logistics around
canal
SUEZ CANAL EXPANSION
The Suez Canal expansion will increase the Canal’s annual
revenues from US$5.3 billion to approximately US$13.2 billion
in 2023. According to the Suez Canal Authority’s projections,
daily transits will rise from their current level of 49 ships to
97 ships by 2023.
97 ships
Daily transits
by 2023
US$13.5bn
Projected Revenues
by 2023
One of the canal expansion’s positive impacts is a planned
scheme of establishing an airport in Ain Sokhna. This will
enhance the corporate demand for residential, commercial,
retail, education and healthcare facilities along with hotel
rooms, especially in the East side of the City Centre. Airports
and aviation sector around the Suez Canal are also planned to
compliment the major investment being made to expand the
Suez Canal.
More than
120,000 job
Creation
CAIRO AIRPORT CITY
2,8mn m²
Cairo Airport City is aimed at positioning Cairo as the
centre of the region through a series of logistical, retail, and
recreational developments. There is a study to link the Airport
City with the new Suez Canal through a new railway line with
Ain Sokhna port, and Cairo International Airport. Cairo Airport
is likely to be a major assembly and distribution centre of
passengers and cargos.
The Airport City is a complete city around the airport and
will include a new trade free zone, cargo village, factories
belonging to the civil aviation for packaging, and food outlets.
In addition, an entertainment area, administrative offices,
hotels and a hospital are planned or under construction. The
project is expected to provide more than 120,000 jobs on the
short and long term. This will translate to additional demand
for residential units, commercial space, and hotel rooms.
Aero City
Commercial
Entertainment
District:
5mn m²
447mn m²
Cairo Airport Core
NEW CAPITAL CITY
The New Capital City is expected to be a new administrative
and financial district, extending Cairo eastwards to the Coast
of Red Sea. According to the Egyptian Government and the
master planners, the City will be a new urbanization area
that is projected to host over 7 million residents. The new
city is expected to be surrounded by local schools, religious
buildings, civic amenities and shops.
The project is expected to attract domestic and international
investors. Therefore, a stronger demand for real estate
developments is anticipated in the future.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
7 Million
residents
Cargo & Logistics
Village
Awards Wining Company
58
2012
Voted #1 Advisor MENA
2013
Voted #1 Advisors and Consultants MENA
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2014
Voted #1 Advisors and Consultants MENA
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16 first place awards in total
2014/15
Best Property Consultancy Arabia 2014-2015
2015
Voted #1 Advisors and Consultants MENA
Voted #1 Advisors and Consultants UAE
Voted #1 Advisors and Consultants KSA
Best Consultants – to the Private Sector (Shortlisted)
Education Infrastructure – Best Education Property
Consultants (Shortlisted)
Best Financial Advisor (Shortlisted)
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International
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160
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About Colliers International
Colliers International is a global leader in commercial real estate services, with over
16,300 professionals operating out of more than 502 offices in 67 countries. Colliers
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Disclaimer
The information contained herein has been obtained from sources deemed reliable. While every
reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is
assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to
acting on any of the material contained in this report.
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Greater Cairo | Real Estate Market Overview | 2015 | Colliers International