Egyptian real estate performs well in times of crisis: Savills
Property prices in Egypt are certain to rise over the next four months due to rising inflation and spikes in building material prices, which will force developers to raise the cost of units for sale, said Catesby Langer-Paget, head of Savills Egypt, to the Daily. Egypt News.
“Egyptian real estate, as an investment sector, has generally performed well in times of crisis,” Langer-Paget said.
He noted that the number of branded residences has increased around the world, not just in Egypt. It is a global trend and we have seen that Egypt has had great success with branded residences in Cairo in the past. However, this type of property still represents a small part of the residential supply to come.
He further pointed out, “There is a demand for residential real estate at all price levels in Egypt, as the population increases by 2 million every year. That is to say, the demand increases in all sectors every year. In addition, there is a strong demand for commercial and administrative space from investors, both local and foreign, especially in the New Administrative Capital. In addition, the opening of the Grand Egyptian Museum will give a boost to the real estate market in western Cairo as well as to the Sphinx airport. This is part of Egypt’s efforts to develop and expand in this region.
Regarding the most promising sectors of the local market, he added: “We believe that the logistics and industrial sector is the one that is likely to see the strongest growth in the short and medium term as new entrants are entering the market to meet the demand for modern space.
Regarding the second home market, he said it was a promising sector, especially after the fallout from COVID-19, saying, “I think this sector has enormous and massive potential, especially on the north coast and with the arrival of New Alamein. With new flexible working practices, we may even start to see areas of the North Coast and Sokhna functioning as primary residences.
Lange-Paget believes that more mergers and acquisitions will occur in the Egyptian real estate market in the coming period, and went on to say, “We expected something like the acquisition of SODIC by Aldar-ADQ to happen. . Additionally, we think it’s likely that we’ll start to see the acquisition of smaller developers by larger ones locally. As a result, we expect more acquisitions to come to the Egyptian property market, which will in turn lead to more investment opportunities as new land banks are tapped.
The Egyptian government has paid a lot of attention to the real estate market, but much more needs to be done to regulate the local market and bring it into line with other real estate markets in the region such as Dubai and Bahrain which already have a RERA real estate regulatory body) fully functional,” Langer-Paget said.
Historically, the maintenance of properties has not been a priority in Cairo, which is essential to maintain their value. Recently, as developers focus more on commercial real estate, they have started to invest more in providing high quality property management for retail and offices. In addition, after-sales and rental services are very important to maintain property value, create a vibrant community and better serve your buyers.
Regarding the challenges in the Egyptian real estate sector, Langer-Paget said the local market needs more regulations between developers and buyers, in addition to the government.
He would prefer to invest in the Egyptian real estate sector as it remains strong and enjoys strong demand. He added: “Historically, prices have risen faster than inflation and have performed well even in times of financial uncertainty. I am very positive about real estate in Egypt.
Langer-Paget believes that COVID-19 has not affected the retail sector in Egypt as much as others in other countries; everything is back to how it was before the pandemic. However, other issues are currently plaguing the retail industry, such as difficulties in importing goods and dealing with rapidly rising prices of fit-out costs.
“The Egyptian retail market has grown rapidly in a very short time and is thriving in Egypt more than any other place in the region. The retail market is moving in the right direction. As a result, retail demand will continue to grow and well-designed and managed programs will continue to perform well.
He predicted that we will see price growth in all sectors, including retail and office sectors, but that the logistics sector will be the fastest growing sector in Egypt over the next 24 years. month..
“Savills provides any consultancy service related to real estate. Our clients include major Egyptian developers and institutions, as well as major international investors. We provide them with various services ranging from property management, strategic consulting, project management to marketing consulting, to name a few, depending on the client’s needs. Our customer base continues to grow and we don’t expect that to slow down anytime soon,” he noted.
“We are very excited about the prospect of COP27 to be held from 7 to 18 November 2022 in Sharm el-Sheikh, South Sinai. We are happy that COP27 is coming to Egypt this year. Real estate contributes 40% of global carbon emissions, a concerning statistic for anyone leading the sustainability agenda in the industry. Climate change has moved from a marginal issue to a global priority, and we recognize our responsibility to do our part and bring about change for good. We are very interested in implementing sustainable practices both within our company and for our customers,” he said. “As a result, Savills aims to shed light on this and other sustainability challenges facing the global and regional real estate sector at COP27.”
Savills Egypt participated in the Race to Zero campaign in 2021, an event held at the British Embassy in Cairo, where Savills Egypt pledged to optimize processes to achieve net zero carbon emissions by 2050, Langer concluded. -Paget.