The residential property market in Cairo, Egypt, showed signs of strengthening in the second quarter of 2014 due to the new projects that had been announced recently, said a report.

The apartment and villa sale prices in the Egyptian capital increased during 2014 across all sectors, according to property expert JLL.
 
Similarly, the rental market in Cairo has registered annual growth levels in most locations. Over the past quarter, the strongest growth has been recorded in villa prices in 6th October (up nine per cent) and apartment rents in New Cairo (up seven per cent), stated JLL in its report for the fourth quarter.

Cairo's residential market continues to recover with improved sales figures. The positive political and economic outlook is expected to drive investments in the residential sector, particularly in prime property, thus strengthening the market further in 2015, it added.

On the office sector, JLL said Cairo’s performance remained relatively unchanged over the last quarter, with rents stable across all the commercial locations.

The major completion in the fourth quarter was a further 14,000 sq m in Mivida (New Cairo). An additional 52,000 sq m is expected to be delivered in 2015, of which 31,000 sq m are due for delivery in the first quarter.

This will increase the total stock across Greater Cairo to 955,000 sq m, it added.

Despite an increase in enquiries for commercial space, vacancy levels increased to 35 per cent in the basket of buildings monitored by JLL at the end of 2014, as an additional 85,000 sq m was added to the current stock during the past year.

On the hotel sector, JLL said the fourth quarter saw delays in the handover of the Nile Ritz Carlton (331 keys), increasing the total expected supply in 2015 to 623 keys.

While the year-to-date occupancy rates remained lower in November than they were in 2013, average daily rate (ADR) improved significantly (78 per cent). This reflects government initiatives to increase room rates on the back of scrapping fuel subsidies, said the report.

The Cairo retail market remained stable in the fourth quarter, with average prime retail rents static at between $720 to $1,416 sq m and average line store rents unchanged at $1,170 sq m.

The demand has been relatively active over the quarter, particularly from the food and beverage segment, thus decreasing vacancy rates to 19 per cent (compared to 23 per cent in Q3).

This trend is expected to continue into the future as market sentiment improves and demand continues to increase, reflecting positively on rental rates, said JLL in its report.

Commenting on the report, Ayman Sami, the head of Egypt Office at JLL Mena, said Cairo's real estate market showed signs of strengthening in the residential market and stability in the commercial sector due to new projects.

Cairo's office landscape expansion will increase the total stock across Greater Cairo and rents will be stable across all the commercial locations, stated Sami.

"Developers are now able to progress with stalled projects, and the high level of delays witnessed in recent years is therefore likely to decline. As confidence returns and the Ministry of Tourism continues to promote a number of mega investments across the country, 2015 could see major new hospitality projects announced in Cairo," he added.-TradeArabia News Service