Ongoing privatization program to expedite Cairo's real estate growth: JLL

Updated 4/19/2023 11:29:00 AM

Arab Finance: The recovery of Cairo’s real estate sector and construction activities is likely to be accelerated by a revitalized privatization program aimed at attracting much-needed foreign direct investments (FDI) into Egypt’s economy, according to JLL’s Cairo Real Estate Market Overview Report for the first quarter (Q1) of 2023.

The government seeks to double the role of the private sector in the economy to 65% in line with its ongoing divestment of state-owned assets, planning to lure $40 billion in private investment by 2026, the report highlighted.

“The anticipated FDI inflow is fueling optimism and is expected to relieve pressure on real estate activities across the country, particularly in Cairo,” Ayman Sami, Country Head, Egypt at JLL, said.

“The government’s proactive measures in the form of state support and extension of construction deadlines are aimed to ease the current challenges in the real estate sector, enabling stakeholders to navigate the economic headwinds,” Sami added.

The performance of the hospitality sector in Cairo during Q1 2023 remained stable at 28,000 keys, which indicates a positive outlook for the sector, with the expectations of completing around 900 keys this year, the report showed.

Moreover, tourist arrivals to the country are likely to increase by 28% year on year (YoY) on the back of the government’s announcement of a five-year visa for 180 nationalities, JLL highlighted.

In the first two months of 2023 alone, the number of visitors to Egypt grew by 34% increase, the report pointed out.

As for occupancy levels in Cairo, they were registered at 74% from the beginning of this year until February, compared to 62% during the same period last year, according to the report.

Meanwhile, average daily rates (ADRs) and revenue per available room (RevPARs) rose by 19% to $135 and 40% to $100, respectively, over the same period, it added.