Egypt’s improved economic conditions are reflected in stabilised prices, reduced vacancy rates, and a positive PMI reading in the third quarter (Q3) of 2024, according to data from the real estate research agency JLL.
The outsourcing and ICT sectors are poised for development, supported by operational cost advantages and government investment.
In Q3 2024, the total office stock increased to more than 2.1 million sq.m. of gross leasable area (GLA) to the office market. “While some projects experienced construction delays, others in the Central Business District (CBD) of the New Administrative Capital (NAC) are also facing delays in practical completion. Furthermore, approximately 162,000sq. m. of GLA is scheduled for completion in the last quarter of the year,” said a JLL report, a copy of which was made available to The Egyptian Gazette.
According to the report, there was an improvement in the office sector’s rental performance in 2024 Q3, demonstrating stability with minimal change compared to the previous year. “This improvement followed enhanced market conditions and increased business confidence, reflected in the S&P Global Egypt PMI reading, which rose to 50.4 in August 2024. This reading marked the first expansion in the non-oil private sector since November 2020, surpassing the neutral threshold of 50.0 which differentiates growth from contraction,” it said.
Average citywide rents decreased marginally by 1% annually, reaching $356 per sq.m. per annum. Meanwhile, the average vacancy rate reduced to nine per cent in 2024Q3, down from 12 per cent during the same period last year.
As for the outlook of Egypt’s real estate sector, the report expects several new business parks will deliver new office spaces in the near future. This new stock will cater to the growing demand for high-quality, accessible offerings in East Cairo, which standalone buildings often lack, according to the report.
“Moreover, given Cairo’s favourable operational costs, we expect strong demand for office space from the outsourcing market. In support of this, the government has allocated approximately LE85billion to the ICT sector, its fastest growing industry, aiming to increase revenues from outsourcing and tech consulting activities to $8 billion by 2026,” it added.
