MEMPHIS REISEN

Cairo’s hospitality sector sees occupancy rates rise to 70% in November 2023 – Dailynewsegypt

Egypt’s tourism numbers, soaring at about 8 times the global tourism rate of 4.5%, have been crucial in boosting overall growth, according to JLL’s “A Year in Review” report of the North African country’s real estate market.

From January to October 2023, Egypt recorded about 13.9 million tourist arrivals, a nearly 36% increase compared to the same period last year. Notably, October 2023 saw the second-highest number of tourist arrivals in Egypt since October 2010, welcoming about 1.3 million tourists (up by 8% compared to October 2022).

Ayman Sami, Country Head of JLL Egypt, said: “The rapidly growing tourist demand and increased spending on leisure and tourism infrastructure once again confirm the strong position of the hospitality market in Egypt, which is expected to keep growing in the coming years. Tourism is a key pillar of Egypt’s economy, and the launch of numerous new projects in Cairo and other prominent Egyptian cities throughout 2023 is further driving the robust growth of the hospitality sector and creating an upward momentum across other real estate segments.”

The capital’s city-wide occupancy reached 70% in November 2023, reflecting an annual increase of around 100 basis points (bp). However, over the same period, average daily rates (ADRs) and revenue per available room (RevPARs) decreased by around 7% and 6% respectively. Resilience and strength in the residential sector

A total of 23,000 residential units were added in 2023, increasing the total stock to almost 268,000 units. Around 33,000 units, mainly apartments within mixed-use developments, are planned for completion in 2024.

Property owners in the secondary market also saw higher selling prices and rental rates, which surged significantly especially during the fourth quarter of 2023. This surge was in line with both high inflationary pressures and active demand from buyers looking to hedge against inflation and devaluation. In the 6th of October and New Cairo cities, average sale prices in Q4 2023 increased by 56% and 63%, while rental rates increased by 25% and 30%, respectively.

With possible currency devaluations and subsequent cost inflation expected to continue throughout 2024, developers are carefully preparing and adjusting their off-plan sale prices to recover losses and maintain healthy profit margins going forward. As a result, sale prices in Cairo are expected to keep rising in the short to medium term.

In the retail market, average rental rates across primary and secondary malls stayed stable every quarter in Q4 and increased annually by 11% and 9% for both segments, respectively. Meanwhile, the average vacancy rate dropped slightly from 10% in Q4 2022 to 9% in Q4 2023.

In the office market, around 136,000 sq. m. of office space was delivered in 2023, bringing the total office stock to about 2 million sq. m. Moreover, nearly 570,000 sq. m. of office GLA is projected for 2024, mainly within the New Administrative Capital (NAC), followed by New Cairo and the west of the capital city.

The Q4 2023 saw average city-wide office rents decrease by 3% to $362 per sq. m. per annum, compared to the same period in 2022. Similarly, the average vacancy rate increased to 10% from 8% in Q4 2023.