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How increased demand in F&B will boost the retail market in Cairo

The retail sector in Cairo gained momentum in the third quarter of 2020, driven by increased demand from food and beverage tenants for smaller neighbourhoods and community malls, says JLL

It’s been an interesting few months for Cairo’s real estate market, with a surprising turn for the retail sector. Cairo’s retail sector gained momentum in the third quarter of 2020, driven by increased demand from food and beverage tenants for smaller neighborhoods and community malls, according to JLL’s Q3 Cairo Real Estate Market Performance report.

Cityscape Intelligence looks at the top key takeaways from the JLL report for Cairo’s retail, hospitality, residential and office sector:

Retail

  • Many retail lease agreements were reverted to original pre-COVID commitments, increasing the rents in primary and secondary malls by 10% and 3% respectively.
  • Although new leases are being signed and retailers are proceeding with their expansion plans in specific prime areas, the demand for regional and super regional malls still remain subdued.
  • Retailers need to offer a spacious place for people to meet outside of their home, while ensuring customers are met with positive and unique experiences. To this extent, shopping centres need to evolve to become more than a place to shop
  • Although new leases are being signed and retailers are proceeding with their expansion plans in specific prime areas, the demand for regional and super regional malls still remain subdued.

Hospitality

  • Cairo’s hotel sector saw the opening of The St. Regis Cairo in downtown, the first major hotel completion in the city for 2020. Around 440 more keys are scheduled for completion during the fourth quarter of 2020.
  • Low levels of tourist arrivals have continued to pose downward pressure on Cairo’s hotel sector.

Residential

  • Q3 2020 witnessed no new additions to the residential market, maintaining the total stock at 159,000 units.
  • Sales prices in the primary market remained stable as developers continued to attract demand through extended payment plans, while the secondary market declined by 2% and 9% on an annual basis.
  • Various project launches, mostly focused on waterfront developments entered the market -these areas have become increasingly popular over the summer months, particularly in light of corporates and individuals continuing to work from home.

Office

  • The office sector in Cairo remained stable at 1.1 million sq m of GLA during the third quarter.
  • While business activity is not back to pre-COVID levels, the market witnessed an increase in leasing enquiries, driven by expansion plans of international corporates, particularly in the e-commerce and pharmaceutical industries.
  • Looking ahead, around 83,000 sq m of GLA is expected to enter the market by the end of 2020.

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