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Rental market performance better in New Cairo than 6th of October City: JLL The financial performance of Cairo hotels improved slower than the occupancy rate, says Sami
All sectors of the Cairo real estate market showed positive performances during quarter three (Q3) of 2015, according to a Jones Lang La Salle (JLL) report. The report said that the rental market performed better in New Cairo than in 6th of October City, where rental prices for apartments and villas declined in dollars during Q3. The report added that the office market performed exceptionally well over the past quarter, as Cairo's office space supply reached 911,000 sqm in Q3. Domestic demand in the residential market remains positive, however, prices have declined in dollars, due to the recent devaluation of the currency by the Central Bank of Egypt (CBE). The report added that the retail and hospitality sectors continued to show slow but steady growth during Q3. Head of JLL in Egypt, Ayman Sami, said the devaluation of the Egyptian pound resulted in a decrease in the sales prices of apartments and villas in New Cairo, as well as apartments in 6th of October City. Sami added the only exception was for villas in 6th of October City, where shortages in the new supply resulted in a modest price increase (3%), despite the currency devaluation. No new developments or major new phases were completed across the residential market in Q3, with only minor additions to the supply in Rehab and Cairo Festival City, according to Sami. Sami noted that Q3 of 2015 witnessed the opening of Mirage Mall in New Cairo and the completion of a further 8,000 sqm of retail within Cairo Festival City. "No further projects are due to be delivered in 2015 as construction delays continue," added Sami. "Vacancy rates in existing retail malls remained largely unchanged over Q3, but vacancies have fallen by 5% to 17% over the past year." Pertaining to hotels, occupancy rates rose 53% this year from January until August, compared to 41% in the same period of 2014. Sami added that the increase reflects the return of confidence and increasing visitor arrivals. He noted that the financial performance of Cairo hotels improved slower than the occupancy rate, with the average daily rate increasing from January to August 2015 by 2% compared to the same period in 2014.
