BMI View: Short-term problems surrounding foreign currency, high inflation and security issues have dampened economic growth in early 2016. However, the government's economic reforms and closer relations with fellow Arab states will lead to greater opportunities in the commercial real estate sector in the longer term.
Egypt has been struggling to retain foreign capital since the uprising in 2011 that led to the downfall of former president Hosni Mubarak. The administration of President Abdel Fattah el-Sisi has sought to increase macroeconomic stability and enact reforms to make the country more attractive to international investors, and investment, particularly from other Arab countries, has increased. On the back of low oil prices, there is room for an acceleration in the government's reforms.
Overall, an improving economy will lead to increased opportunities in the office real estate sub-sector, while rental rates are likely to rise on the back of growing demand for space. In 2016 rental rates are set to remain more or less stable, and demand for premium property in particular will remain good.
Demand for retail space in New Cairo is set to rise in 2016, booting rental rates on the back of limited supply. In Cairo we could see a similar story later in 2016, as long as the overall economy remains stable and the security situation does not worsen. Giza currently has limited supply of retail space, and the main focus of investor interest and of demand is on New Cairo, Cairo and 6th of October City.
Industrial real estate is set to benefit from a weaker Egyptian pound, which is making exports cheaper, and rising foreign investment in Egypt. Rental rates are set to rise in Cairo, while we see stability in the other areas we cover.
Activity in the commercial real estate segment is closely tied to the health of the overall economy. As Egypt continues a tentative recovery, there are risks factors that could destabilise the market. These include further Islamic State (IS) activity. However, on the back of increasing economic stability and confidence in the Sisi administration, we see upside risks to our forecasts.
The Egypt Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's Egypt Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Egypt.
- Benchmark BMI's independent real estate industry forecasts for Egypt to test other views - a key input for successful budgeting and strategic business planning in the Egyptian real estate market.
- Target business opportunities and risks in Egypt through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
- Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.
Industry Forecasts Outlook
Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.
- Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).
- Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
- economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).
BMI’s Real Estate Risk Reward Index
BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.
Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors
Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.