In mid-2010, BMI's in-country sources confirmed that Egypt is in the early stages of a major real estate boom. Across all five cities from which we have gathered data (Cairo, Alexandria, Sixth of October City, New Cairo and Giza), rents and capital values have risen over the past six months or so in the office and retail sub-sectors, while yields have fallen. Rents and yields appear to have tracked sideways in the less active industrial sub-sector.
The findings from the latest round of interviews are consistent with what we deduced from the previous round, which we conducted at the end of 2009. A very substantial increase in the supply of commercial property - thanks in part to the development of new cities to the east and west of Cairo and in part due to projects in the capital itself - means that years (perhaps decades) of under-development are finally being addressed. For a long time businesses have had little option but to operate in (typically old) buildings originally constructed for residential purposes. Now they have some choice.
Demand is also coming from two other quarters. Western multinationals are establishing and/or expanding their presence in Egypt, with the result that they need more office space. At the same time, Middle Eastern companies are relocating to Egypt, often in response to more difficult conditions in Dubai and Lebanon. Significantly, this second group of companies understands and is tolerant of the risks of operating in Egypt. Even if the political noises surrounding the forthcoming elections produces widespread unrest, these regional companies are unlikely to reconsider their plans.
The result is that conditions are dynamic. Vacancy rates vary, but are generally low or falling. Looking ahead, we expect that the optimism of protagonists in the office and retail sub-sectors will be justified. There should be a double-digit increase in rentals in these sub-sectors in 2011; further - if smaller - rises are likely in the following years. Over the forecast period (2011-2014), we envisage that capital values will increase rather more than rentals. As a result, the general downtrend in yields should continue. Egyptian assets are being rerated, and the country's commercial real estate sector is a clear beneficiary of this.
Key Features Of This Report
This is the latest edition of a new series of industry reports published by BMI that seeks to identify the key dynamics of the real estate sectors of 44 countries around the world, some of which are developed and some of which are, in every sense, emerging markets. The questions that we seek to answer for each country remain as follows: What are the main issues for actors in and around real estate development in the country concerned, over both the long and the short term? What are the main constraints that they face? What are the key insights to be gleaned by comparing the real estate sector of a country with its regional peers?
In Q3 we introduced a very substantial improvement to our reports. We incorporated data and qualitative observations provided to us by commercial real estate agents operating in the countries we survey. As a result we have gained a much clearer picture of the balance between demand and supply in each of three main sub-sectors - office, retail and industrial. We have also introduced a new approach to the forecasting of rental yields, which is discussed in the methodology section of this report.
In Q410 we have incorporated a lot of new data in relation to rents and yields in 2010. We gained this data through a new round of interviews with our in-country sources in mid-2010. In some cases, the latest information from our sources has caused us to make significant revisions to our forecasts for 2011-2014. We asked our sources to indicate what growth in rents is likely for 2011. We explain their answers in the Forecast Scenarios.
For more information or to purchase this report, go to:
- http://www.fastmr.com/
Partial Table of Contents:
Executive Summary
SWOT Analysis
- Egypt Real Estate/Construction SWOT
- Egypt Economic SWOT
- Egypt Business Environment SWOT
Regional Real Estate Overview
- Table: Middle East And Africa's Office Markets At A Glance - Rents, 2009-2011 (US$ per square metre per month)
- Table: Middle East And Africa's Retail Markets At A Glance - Rents, 2009-2011 (US$ per square metre per month)
- Table: Middle East And Africa's Industrial Markets At A Glance - Rents, 2009-2011 (US$ per square metre per month)
Real Estate Market Overview
- Table: Egypt's Real Estate Market - Rentals, 2008 And 2009 (mSq/month, US$)
- Table: Egypt's Real Estate Market - Net Yield, 2008 And 2009 (%)
- Table: Egypt's Real Estate Market - Terms Of Contract/Lease
Industry Forecast Scenario
- Real Estate Outlook
- Table: Egypt Real Estate Markets - Rentals, 2009-2011 (US$, mSq/month)
- Table: Egypt Real Estate Markets - Net Yield, 2008-2014 (%)
- Construction And Infrastructure Forecast Scenario
- Table: Egypt's Economic And Construction Data, 2008-2014
- Egypt's Macroeconomic Outlook
- Table: Egypt - Economic Activity
Business Environment
- Real Estate/Construction Business Environment Ratings
- Table: Middle East And Africa Real Estate/Construction Business Environment Ratings
- Egypt's RECBER
- Project Finance Ratings - Middle East
- Table: Design And Construction Rating
- Table: Commissioning And Operating Rating
- Table: Overall Project Finance Rating
- Egypt's Business Environment
- Table: BMI Business And Operational Risk Ratings
- Table: BMI Legal Framework Ratings
- Table: Foreign Direct Investment Inflows Into The Middle East And Africa, 2006-2008
- Table: Egypt's Top Export Destinations, 2001-2008 (US$mn)
- Table: BMI Trade Ratings
Company Monitor
-
Full Table of Contents is available at:
-- http://www.fastmr.com/
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at http://www.fastmr.com/
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
