Colliers International said that provision and integration of social infrastructure within mixed-use development, such as, open spaces, supporting retail, F&B, healthcare, education, and other commercial activities, has tangible positive impact on real estate demand. The company added that the novel coronavrius (COVID-19) outbreak has further emphasised these needs.
Colliers International has conducted a comprehensive research in Cairo regarding which factors determine price premium. The results for a well-designed mixed-use project could range from a premium of 25% to 45%.
Colliers International’s Cairo Real Estate Overview said that Greater Cairo has witnessed rapid development across its real estate market with a greater focus on two areas: New Cairo/New Administrative Capital and 6th of October cities during the last few years.
Cairo developers have always been at the forefront of innovation, through large scale master plans. However, societal demands are changing requiring greater integration of work, leisure, health, and education.
Regardless of the additional supply coming into the market within the new cities, the market is still witnessing a strong performance, Colliers said.
“The average sales rate across Greater Cairo increased by 14% to reach approximately EGP 14,100 per sqm ($888). Similar to the rental market, Zamalek is the most expensive area, given that it is an established high-end neighbourhood. New cities such as New Cairo and 6th of October are becoming more established districts offering a number of key community/lifestyle. New Cairo and 6th of October achieve an average sales rate of approximately EGP 11,400 ($718) and EGP 6,800 per sqm ($428), respectively,” the report read.
It highlighted that Greater Cairo’s retail has evolved from traditional souks, to high-streets outlets and larger shopping malls. The retail landscape continues to evolve as consumer lifestyles change together with increased competition from both international and local retailers and developers, the report disclosed.
Colliers further noted that average rental rates range between $380 and $1,300 per sqm per annum for Grade A shopping malls. While the average rental rates for Grade B formal retail space range between $110 and $500 per sqm per annum. It is worth to note that the annual rental escalation rate can range from 5% up to 10%, based on mall’s management and tenant’s agreements.
Cairo is the acknowledged financial and business centre of Egypt. However, it does not have a clearly defined Central Business District (CBD) as compared with other international cities, according to Colliers.
Grade A office space available for lease within Greater Cairo is located on major commercial arteries such as 90th Street that also holds a significant proportion of Cairo’s Grade B office stock. Business Parks offering prime office space are mainly concentrated within western and eastern Cairo.
Colliers International’s research pointed out that demand for office space is directed towards both the east and west of Cairo, added that Cairo’s formal office market is driven by rental as opposed to sale. The average rental rates of office space in key areas within Greater Cairo range between $200 per sqm and $335 per sqm per annum.
