By Evline Meshreky
The improved political and economic stability in Egypt has created new confidence in the real estate market, said Aymen Samy, head of Jones Lang LaSalle (JLL) in Egypt.
In a report published 22 July, JLL evaluated the performance of Cairo’s real estate in the second quarter (Q2) of 2014.
Samy added in the report that a number of projects previously placed on hold, such as those by Palm Hills Development Company, have been approved.
The residential sector was the strongest performing sector in the market during Q2. Villas witnessed the strongest increase, of 17%, in New Cairo.
“Performance has been very satisfactory and strong in the first half,” said Ahmed Badrawy, the managing director at SODIC. “The return of stability through the market is positive.”
Demand for upper middle class housing is enormous, Badrawy said, and supply must keep pace. TO this end, he said, the government should collaborate with the private sector to offer more reasonable land prices.
There were no major changes in rentals in the office sector. Demand remains active with the receipt of inquiries from international customers for additional office space in New Cairo and 6th of October City. The supply also increased by approximately 25%, compared to 21% in the Q1.
The average retail rents have remained unchanged over the quarter. The owners of some major shopping malls have raised their prices during the Q2, encouraged by the entrance of new brands to the market and retailers seek to trade up in the high quality locations that offer security, parking and accessibility.
The hotel market is currently close to the lowest level of its cycle. The level of tourist arrivals in the first four months of 2014 (January – April) declined by around 26%.