(MENAFN- Khaleej Times)Residential prices are expected to continue to rise in Cairo according to consultancy JLL's second quarter (Q2 2015) Cairo real estate market overview report.
Four developments were completed across the residential market in Q2 adding an extra 2000 units to the residential supply. Those developments included Jiwar and the Palm Hills Extension Rehab 2 and Village Gardens Katameya in New Cairo. "Within the residential sector prices are expected to continue to rise in New Cairo on the back of major new announcements (New Capital Cairo Future City Palm Hills and MNHD joint venture) and government initiatives to further develop the suburbs of East Cairo. The same cannot be said of projects to the west of the City that are unlikely to see such strong price growth" said Ayman Sami head of Egypt office at JLL Mena. An additional 28000 units are due for completion during the second half of 2015 the majority of which are located in 6th of October. However many of these projects are likely to be delayed into 2016 and 2017. "We have seen more investment coming from Saudi Arabia and the UAE since the Egypt Economic Development Conference which was hosted in Sharm El-Sheikh in March of this year. This has resulted in the International Monetary Fund upgrading its forecasts for Egypt for 2015 and 2016 with GDP growth forecasts raised to four per cent in 2015 and 4.4 per cent in 2016" Sami added. ComCompilCairo's office supply remained unchanged at 919000 sq m GLA (gross leasable area) in Q2. While vacancy rates went up over the past year they remained relatively stable over Q2 at 33 per cent. Office rents in Central Cairo witnessed a significant decrease in Q2 falling to $30 per sq m per month as the majority of demand shifts towards satellite cities especially New Cairo. Sami said: "With the government recognising the importance of the tourism industry to the Egyptian economy the Ministry of Civil Aviation plans to reduce aviation fees at four airports (Luxor Aswan Marsa Matrouh and Taba) and the Ministry of Tourism is embarking on a major overseas marketing campaign. We anticipate the hotel sector will see some gains." No new hotels were delivered in Q2 as the reopening of the Nile Ritz Carlton (331 keys) is scheduled for September followed by the St Regis Cairo (292 keys) later in 2015. Vacancy rates in existing malls remained unchanged on a quarterly basis but have recorded a significant decline over the year as the market absorbed much of the 40000 sq m of GLA completed over the past year. The decline in vacancies has resulted in continued rental growth with prime rents for line stores increasing by five per cent over the quarter and by 13 per cent y-o-y. No retail malls were completed in Q2 with Bandar Mall and Capital Mall now scheduled to complete in Q4 2015 and Madinaty Mega Mall and Citadel Plaza postponed until 2016. -
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