Egypt has introduced 20 new city developments and upgraded existing 23 cities which lead to higher demand on Egypt’s real estate sector despite the impact of the covid-19, Fitch Solutions said in its 3Q2020 real estate report.
This demand has mainly been fueled by office assets sought after by banks and financial institutions and for which Cairo remains an epicentre, especially in the New Cairo area.
Rentals in Cairo are projected to see rates climb by over 13 percent.
New cities driving higher rents: Mega projects on the North Coast could drive up Alexandria office rental prices after years of moderate demand and limited supply that kept the rental rates in check.
New Alamein is particularly interesting for real estate investors as it could raise rental rates in 2020 by 7.7 percent to an average of USD 14.6/sqm.
Office space driving growth in Greater Cairo: Demand for office space in the Greater Cairo area remains strong, with Sheikh Zayed being the most attractive. While outdated buildings in Giza push away prime office seekers, demand is great from occupants who seek lower prices for quality supply compared to Alexandria and Cairo.
However, Fitch expects the demand for residential housing to slow down, mainly as the EGP is expected to depreciate and purchasing power decreases
In addition, only 10 percent of housing is supplied by real estate developers and they are mostly focused on mid to high end developments and have been unable to exploit pent-up demand, despite a growing population, increasing urbanization, and high marriage rates.