The third quarter of the year saw increased confidence in Cairo’s real estate market against an improving economic backdrop, and demand remained relatively active across all segments, a report said.

Developers are moving forward with both new and re-launched projects, added the latest Cairo Real Estate Market Overview Q3 2014 released by JLL, a global real estate services firm.

The third quarter of 2014 saw further political stability as the regime proceeded with implementing its roadmap. Following the reduction of energy subsidies, the government is currently reforming the tax system, a measure that should boost the economy and halve the budget deficit within seven years, according to the Finance Minister.

The positive sentiment that has placed the economy on the road to recovery is reflected in the announcement of the ambitious Suez Canal Regional Development Project, the report said.

The plan to expand Egypt's economic lifeline is expected to draw in domestic and international investment and finance industrial and export services as well as reinforcing the industrial and logistics backbone of Egypt's economy. Blueprints for other major national projects are also being prepared, including the 'Golden Triangle' which aims at exploiting the natural resources and mineral wealth in Upper Egypt.

Office market

The office sector remained relatively unchanged over the third quarter with the addition of just one new project.

The release of additional space at City Stars Properties added 4,000 sq m to the total office stock, which now stands at around 890,000 sq m.

Rental rates have remained flat over the past year. While vacancy rates remain high (27 per cent), there is increased interest from international occupiers for additional office space in New Cairo.

Vacancy rates have increased marginally over the quarter due to the introduction of an additional 4,000 sq m of office space by City Stars and 50 per cent of Future Gate New Cairo that is currently being offered for rent on a sub-lease basis.

Residential market

The residential market has been the strongest sector in Cairo in Q3, with the sales recovering ahead of rents in most locations as confidence returns.

With the exception of villa rents in 6th of October, sales and rents increased across the basket monitored by JLL.

While prices and rents in New Cairo remain above those in 6th of October, the gap has narrowed somewhat in recent months, with the strongest price growth being recorded in 6th of October City.

As confidence is restored to the market, the residential sector is expected to recover its dynamism and show continued growth in prices and rentals over the remainder of 2014 and into 2015, the JLL report said. – TradeArabia News Service