Egypt’s real estate sector grows increasingly attractive and affordable for foreign investors, in terms of USD, according to a recent report by Savills Egypt
Egypt’s real estate sector grows increasingly attractive and affordable for foreign investors, in terms of USD, according to a recent report by Savills Egypt.
Savills Egypt, a real estate consultancy, has published its latest report on the Egyptian real estate market, focusing on retail and office sectors.
To further improve the market’s appeal, Head of Savills Egypt, Catesby Langer-Paget, said “certain adjustments need to be put in place to incentivize them further. Firstly, ensuring currency stability will give investors confidence that their purchase will appreciate over time. Secondly, creating a better legal and commercial framework will make the purchasing process smoother and more transparent”.
Langer-Paget added that facilitating registration processes will reduce friction that may discourage potential investors, pointing out that these improvements will strengthen the sector’s attractiveness to foreign investors.
According to the report, the retail sector has encountered significant hurdles such as global supply chain disruptions, import restrictions, local currency devaluation, inflationary pressures, and the repercussions of global conflicts.
Despite this, new local Food and Beverage (F&B) brands that offer unique dining experiences and innovative take-out concepts surged, with several European F&B brands having successfully entered the Egyptian market.
The current market dynamics are advantageous for retailers and F&B operators, enabling them to negotiate more flexible lease terms with landlords, Savills Egypt's report explained.
Sherine Badreldine, Head of Operations at Savills Egypt, emphasized the need for experiential retail concepts, expanded entertainment options, and a wider range of international brands to cater to the young demographic and Generation Z, who prefer technology-driven shopping experiences.
Retail rental rates in Greater Cairo recorded an average of EGP 940 per square meter (sqm) per month, with an 85% occupancy rate. West Greater Cairo registered an average of EGP 820 per sqm per month (79% occupancy), while Central Cairo stood at EGP 900 per sqm per month (90% occupancy). East Greater Cairo recorded the highest average at EGP 1,020 per sqm per month (88% occupancy).
Savills Egypt's report revealed that the EGP’s floatation and rising inflation rates have led tenants to accelerate fit-out work in leased office spaces, anticipating price increases and limited availability of raw materials due to import restrictions.
Landlords responded by offering more flexible lease models and have moved to leasing office spaces in USD instead of EGP to mitigate the impact of currency depreciation.
Langer-Paget pointed out the increased demand for office spaces ranging from 200 to 500 square meters by international tenants adopting hybrid working practices.
Startups embracing the "work from anywhere" model have also contributed to the growing demand for serviced offices and co-working spaces across Greater Cairo. This operational model offers flexibility, reduced rental fees, and eliminates the hassle of maintaining dedicated office spaces, the report explained.
On average, office rental rates in Greater Cairo currently stand at EGP 760 per sqm per month, with an occupancy rate of 81%. West Greater Cairo reports an average of EGP 660 per sqm per month (80% occupancy), while Central Cairo stands at EGP 740 per sqm per month (68% occupancy). East Greater Cairo exhibits the highest average at EGP 840 per sqm per month (90% occupancy).