You are on page 1of 24

Real Estate Overview Report Greater Cairo | Real Estate 2016

Accelerating success.

Cairo Market Overview

2016

Colliers International Service Lines

> Commercial Valuations

Mixed Use
Developments

Retail

Hospitality

Healthcare
& Life
Sciences

Education
& Human
Capital

Infrastructure
& Public Private
Partnership

Airport Cities
& City Centres

Ports and
Waterfront
Development

Industrial
&Special
Economic Zones

Leisure, Tourism
& Culture
Development

Entertainment

Sports Cities

> Residential Valuations


> Hospitality
> Healthcare and Education
> Development Solutions
> Retail Advisory
> Retail Leasing
> Corporate Solutions
> Property Management
> Sales and Leasing

Egypt | Cairo Market Overview | 2016 | Colliers International

Introduction
Real estate continues to show resilience within Cairos slowly
improving economy despite the recent devaluation of the
Egyptian pound. In terms of the property sector however,
investors continue to turn to real estate (primarily in the
residential market) as a hedge against currency risks and
inflation. At the same time Cairo offers better value for money
for International and regional tourists through the devaluation.
While the currency devaluation is expected to attract foreign
investment into the country, overall living costs including
construction costs are likely to witness an increase.
Accordingly, developers are likely to pass on these costs in
their price points. Internally with Cairo being a price sensitive
market any increases are likely to depress middle class
purchasing appetite. Conversely the currency devaluation
has increased the purchasing power of foreign investors and
Egyptians earning foreign income.
Commercial property remains both a challenge and an
opportunity. While there are a number of new business
parks and commercial developments only a few adhere to
international standards. Often the concept of international
standards is misinterpreted as a requirement to include
large landscape or waterscaped areas; these in turn carry
additional operation service costs which need to be reclaimed
by developers through rental payments. Opportunities exist
for international standard office parks that meet the (often
mandated) requirements of multinational tenants.
The retail market which was historically dominated by
traditional souks and high street retail continues to transform.
Masterplan developments are incorporating many of the
features demanded by a maturing and educated customer
base. Forward thinking developers are now concentrating on
retail as both a hub and central focal point but also using it to
establish the brand and contextual component of a masterplan.
The overall real estate landscape in Cairo continues to
adapt and evolve. Developers are driven to build functional,
efficient and price sensitive products that target a young,
more educated demographic. In order to be competitive,
new developments should reflect the changing society and
sentiment. Successful mixed-use developments reflect their
local environment while incorporating social infrastructure
facilities such as healthcare and education which in turn
results in higher absorption rates and price points. Colliers
regional experience as consultants for a number of large scale
mixed used masterplan projects suggests that up to 25%
price premium can be achieved by developing market driven
asset classes coordinated at ratios supportable by
the community.

John D. Davis
Chief Executive Officer
Middle East & North Africa
john.davis@colliers.com

Ian Albert
Regional Director
Valuations and Advisory
ian.albert@colliers.com

Stuart Gissing
Regional Director
Retail Advisory and
Management Solutions
stuart.gissing@colliers.com

Mansoor Ahmed
Director
Development Solutions
mansoor.ahmed@colliers.com

Filippo Sona
Director
Head of Hotels
filippo.sona@colliers.com

Hassan Abou Alam


Senior Manager
Business Development
hassan.aboualam@colliers.com

Egypt | Cairo Market Overview | 2016 | Colliers International

Cairo Market Overview


KEY MESSAGES

Residential Market
Build to meet affordability levels which competes successfully as a
residential destination. This not only means an attractive ticket price,
but attractive payment plans within livable communities

Retail Market
Market opportunity to tap into local brands and artisan products
combining these with the international brands within modern and
traditional formats

Hospitality Market
Adapt to Cairos changing hotel market, to meet the needs of an
increasing share of domestic and regional tourists, to a younger
generation and to price-sensitive travelers

Office Market
Build to international standards to attract multinational
corporate tenants

Healthcare Market
Build to suit hospitals and clinics are required in Egypt - Demand is
currently being met by converting residential and office buildings into
healthcare facilities. These facilities are not suitable for medical use
and are inefficient

Egypt | Cairo Market Overview | 2016 | Colliers International

Residential Market
WHERES THE
MARKET POTENTIAL?

WHY ARE
THEY BUYING?
WHATS
SELLING?
Parking space

Understanding
affordability levels
Attractive ticket price

Attractive payment plans


Housing as a saving plan

Shell & core

To hedge against inflation

Gated / secure
community

Reserved family
assets

Egypt
Egypt
| Cityscape
| Cairo Market Overview | 2016 | Colliers International

52%
of households

can afford between

Wheres the Market


Potential?
TARGET AFFORDABILITY
Based on resident income levels, the biggest market is for units
priced between US$ 26,000 US$ 35,000 catering to 52%
of Greater Cairo households. However, placing these numbers
into perspective, there is little / no supply available by private
developers within this price range.

US$

35,000

The most affordable private developments

US$

26,000

A 130sqm apartment in 6th October City (one of the more


affordable districts, excluding masterplans), for instance
can sell within the range of US$ 60,000 US$ 65,000.
Units of similar price have the potential to capture 13% of
Greater Cairos households.
Similar units within high-end developments such as Cairo
Festival City and Uptown Cairo are affordable to only 0.2%
of total households.

130sqm
apartment in 6th October
City can can sell for up to

WHAT THIS MEANS FOR THE DEVELOPER


Targeting a higher unit price, not only minimizes the potential market
size, but also translates into a much longer absorption period for the
development. Given the larger investment required, potential buyers act
more cautiously, and take time to raise finance and finalize transactions.
Whilst there continues to be an undersupply within the upper-mid and
luxury housing market, since this market segment is primarily driven by
end-users as opposed to investors, qualitative aspects such as efficient
floor plans, internal infrastructure, overall masterplaning and community
feel become the key determinants for the sale.

US$

65,000

Egypt | Cairo Market Overview | 2016 | Colliers International

Developing more affordable units on the other hand, are likely to


translate into much shorter absorption periods, targeting price sensitive
investors.

Why are they Buying?


HOUSING AS A MEANS TO HEDGE AGAINST
INFLATION
The volatility of the Egyptian pound together with historically
high inflation rates, has attracted residents to the property
investment market in order to secure their wealth.
The mortgage financing market however is yet at its infancy.
The relatively high interest rates and credit scores have
contributed negatively towards attracting potential homeowners.
Given the limitations within the local mortgage market,
developers have taken on the role financing their own units by
means of attractive payment plans. Investors also prefer the
option of purchasing off-plan units in installments. Purchasing
units in such installments is also seen as an effective savings
mechanism for local households.

WHAT THIS MEANS FOR THE DEVELOPER


In a price sensitive market such as Cairo, the total unit price and
payment plans matter.
Developers are extending payment plans by up to 7 years to allow
affordable installments to attract investors
With the recent currency devaluation, and anticipation of further
currency devaluations, demand for real estate is likely to increase further
as investors will be looking at securing their funds/ wealth.
On the other hand, devaluation of the currency will impact spending
power/ disposable income of local residents, exerting more pressure on
a price sensitive market

E X T E N D E D

payment plans

up to

years

800,000 MARRIAGES A YEAR


Half of greater Cairos population is between the ages of 15
40. The need for housing is more likely to be pressing among
this demographic as they move out of their family houses and
into new homes.

50%
approximately

of Cairos population

15

WHAT THIS MEANS FOR THE DEVELOPER

between
the
ages of

40

With population increasing annually by 2% and housing supply at a much


lower rate of 1%, in an already undersupplied market, the demand for
housing units continues to rise.
Affordability levels of new households needs to be taken into
consideration when developing pricing strategies.
Cairo being a market traditionally consisting of larger units (3/4 bedroom
apartments), with limited smaller units, forthcoming developments are
best placed to deliver 1 and 2 bedroom units (subject to location) at
attractive price points to capture demand from new households.

Population
increasing

annually

Egypt | Cairo Market Overview | 2016 | Colliers International

Whats Selling?

Fitted out units can


cost approximately

PREFERENCE FOR SHELL & CORE


The market continues to be dominated by shell and core
units, amidst a few exceptions such as Cairo Festival City and
Uptown Cairo which delivers finished products.
This is largely owing to:
The final finishes are not guaranteed to meet the owners
expectations

25%

Fitting out of the unit can be phased by the owner, thereby


easing his/ her financial commitments

more

WHAT THIS MEANS FOR THE DEVELOPER


+
25%

Delivering fitted out units can cost approximately 25% more than shell and
core units, however, a developer can generally only achieve a 15% - 20%
premium from the base sales price.
However, selling fitted-out units creates uniform build quality and
aesthetics within the overall development. The development is also less
likely to become a continuous construction site.

THE COST OF DEVELOPING


A PARKING SPACE FOR A
SINGLE VEHICLE WITHIN A
BASEMENT LEVEL IN CAIRO,

CAN BUY YOU 1SQM OF


RESIDENTIAL SPACE
IN WESTMINSTER,

LONDON.

PARKING SPACE
Cairo has witnessed acute parking challenges. The situation
remains the same today, although new developments
have started to address this need. Given the high demand
for parking space, many developers (even within new
developments) are selling parking provisions instead of
providing it as an all-inclusive product along with the purchase
of a unit.

WHAT THIS MEANS FOR THE DEVELOPER


Developing a car parking space costs the developer between US$ 11,000
and US$ 13,500 per space (podium level or basement levels). Typically
sales are double costs.

Egypt | Cairo Market Overview | 2016 | Colliers International

COMMUNITIES VS. RESIDENTIAL


DEVELOPMENTS
Cairo already consists of established residential neighborhoods
such as Zamalek and Maadi, which are popular among
residents. Given the high density of the traditional city centre,
the market is now moving towards the East and the West,
following the development of 6th October City and
New Cairo.

Average
sales prices

The expansion towards the new cities was also expedited by


residents preferring to move away from Downtown Cairo,
following political instabilities experienced in the past.

masterplanned communities

Today, while price points still remain a key concern among


potential investors, living in a secure community takes priority.
While gated communities have already been established in
Cairo and are popular among the upper-mid and high-income
residents, as the market matures, so do the investors.

US$

1,100
per sqm
WHAT THIS MEANS FOR THE DEVELOPER
The best forms of development today s to create a destination. This
usually contains either public squares or walkways or boulevards that
enable people to enter in to the area, navigate their way through it and
stop to enjoy its offer of services shops, cafes and restaurants and
to meet family, friends and colleagues.
Average sales prices within masterplanned communities in New
Cairo are in the range of US$ 1,100 US$ 1,500 per sqm (luxury
developments can reach US$ 1,900+), while average sales prices of
apartments outside such communities, but within the same district
range between US$ 700 and US$ 750 per sqm.

US$

1,500
per sqm

Egypt | Cairo Market Overview | 2016 | Colliers International

Retail Market
Convenience,
safety and value

Lifestyle
products

Opportunity
The growth of
artesian products

What are
consumers
looking for?

Is there a need
for a new retail
format?

Why should you


retain the retail
component?

The necessary
glue of a mixed-use
development

10

Egypt | Cairo Market Overview | 2016 | Colliers International

eFesenko / Shutterstock.com

What are consumers


looking for?
CONVENIENCE, SAFETY AND VALUE
Shopping sentiment is now moving towards convenience,
safety and value, creating opportunities for the introduction
of new, vibrant retail formats in Cairo.
Social and economic changes are arguably driving the
convenience retail categories in Cairo. Changes such as
smaller household sizes, longer working hours, security/ safety
concerns, and price sensitivities are playing to the strengths
of convenience/ value based stores as shoppers look to shop
close to their homes and/ workplaces for tonight or for the
next couple of days.

WHAT THIS MEANS FOR THE DEVELOPER


Location remains the key success story for convenience retail market.
These formats need to be positioned in proximity to where your target
market lives and/ work, or along their normal route to and from home
or work. In a city recovering from political instability, knowing your
neighbors and living and shopping in a gated community create a
safety zone for many local residents. Convenience can also translate
into developing more efficient designs that can cater to ever growing
requirements of parking and low occupation costs.
Alongside location and safety, price or value for money is of equal
importance. With the majority of residents composed of the middle
income class, value brands and fast fashion are best positioned to
successfully dominate the market.

GENERATION X AND Y AND THE DEMAND FOR


LIFESTYLE PRODUCTS
Gen X and Y represents approximately 50% of Cairos
population. For this age group, shopping is one of the main
entertainment activities. The retail offering in the city is now
continuously evolving to cater to the needs of this age group.

WHAT THIS MEANS FOR THE DEVELOPER


New retail design and formats therefore must be defined by products and
facilities that meet the needs of this younger demographic;
Larger childrens play areas or combined into dinning experiences
Cinemas
Large family restaurants (Local and International)
Arcade games hall
Increased ratio of leasable areas attributable to F&B concepts
While existing primary retail developments will maintain the general retail
focus, lifestyle formats that carry a higher percentage of entertainment and
F&B than general retail, are likely to experience higher footfall levels, higher
dwell time and more visitors. All of which may translate into higher sales
transactions.

Egypt | Cairo Market Overview | 2016 | Colliers International

11

Is there a need for a new retail format?


THE GROWTH OF ARTISAN PRODUCTS A REFRESHING CHANGE FROM A FORMAT
POINT OF VIEW
There are a number of quality local brands expanding
within high street shopping nodes, such as Zamalek,
Maadi, and El Korba (Heliopolis). This growing trend
highlights an opportunity for developing high street
destinations further, given the absence of this retail
category within new districts such as 6th of October City,
which is fast becoming a popular residential locality.
With the dominance of larger retail formats of formal

shopping malls, developers are ignoring the potential


growth of local artesian / SMEs, by limiting tenancy
contracts to already well established brands having
perceived value, solid business plans and certified
financial targets in place. Such limitations within
shopping malls have pushed towards local SMEs to
high streets and overplayed the returns of repetition
of concepts.

Heliopolis

Zamalek

Nasr City

Mohandessein
New Cairo
Maadi
6 of October
th

WHAT THIS MEANS FOR THE DEVELOPER


The advent of new retail formats combining both traditional aspects
of a formal retail centres along with an informal lifestyle setting, could
allow better opportunities for bespoke brands/local artisans to flourish
and showcase products. There is also a greater opportunity for Cairo
to develop organic growth by marrying up such local artisan products
with existing franchises and close the gap from both ends of the brand
spectrum.

12

Egypt | Cairo Market Overview | 2016 | Colliers International

Why should you


retain the retail
component?

Retail
is indispensable

RETAIL REMAINS A VALUABLE RETAINED


ASSET THE NECESSARY GLUE OF A
MIXED-USE DEVELOPMENT
Mixed-use developments integrate different uses within the
same structure, and generally attract a critical mass of people
during the day and night. Non-retail components of typical
mixed-use developments are frequently sold to investors.
However, retail components are typically regarded as
the indispensable component of a mixed-use project and
commonly retained by the developer. Retaining the retail
component allows the developer to control and maintain the
image and positioning of the whole mixed-use development.

WHAT THIS MEANS FOR THE DEVELOPER

Mixed-use developments are incorporating many of the features now


demanded by a maturing and educated customer base; particularly in
mid- to upper-mid and high-income areas. Therefore concentrating
shopping, live, work and play in one area helps foster a sense of
community feel for the consumers and visitors
As such, when developing a mixed-use project, concentration should
focus on the mix of uses and synergy between adjacent buildings, create
a personality and energy, as well as security, which cannot easily be
achieved within a standard retail environment. As a developer, it is
important to retain the retail component of your mixed-use development
in order to maintain your positioning and image. Retail is in short, the
necessary glue that holds together, defines and creates a destination.

Egypt | Cairo Market Overview | 2016 | Colliers International 13

Hospitality Market
Need for hospitality brands which
are already strong in the GCC
market.
Need for new and modern hotels
with strong restaurant concepts
to target younger generations.
Need for 3-star hotels and
Serviced apartments catering to
more price sensitive guests.

14

Egypt | Cairo Market Overview | 2016 | Colliers International

Need for 3-star


hotels and serviced
apartments
IMMEDIATE POTENTIAL FOR BRANDED
3-STAR HOTELS

20%
domestic

The share of domestic and regional tourism has increased in


past years, and these travelers tend to be more price sensitive
(20% domestic and 55% GCC demand). The market, however,
consists of mostly low quality owner-operated 3-star hotels,
and lacks any internationally branded 3-star hotels.

55%
GCC

DEMAND

WHAT THIS MEANS FOR THE DEVELOPER


A 3-star hotel of international standards will undercut 4-star hotel
prices to drive volume and a higher occupancy rate. At the same time,
branded 3-star hotels would induce demand from unbranded ones,
with its key selling point being a clean room for a low price. Lower
fixed operating costs and lower investment costs than 4 and 5-star
hotels make this asset class more resilient to market downturns, but still
provides the upside during market upswings.

A YOUNG SERVICED APARTMENT MARKET

500

There are less than 500 quality serviced apartments in Cairo,


compared to almost 30,000 units in Dubai. However, with a
large demand from GCC guests and regional families, serviced
apartments are often a preferred accommodation type. These
properties also benefit from a base of corporate long-stay
guests, often choosing serviced apartments due to a lack of
competing quality residential apartment options. In the past
years, these properties have seen constant high occupancy
rates between 75-80%.

serviced apartments

vs.

WHAT THIS MEANS FOR THE DEVELOPER


Developers choosing to develop serviced apartments are likely
to see a moderate risk, in between the residential market and the
hotel market. While relying on a constant base of long-stay guests,
serviced apartments also benefit from any upswing in the hotel market
performance. Combining a serviced apartment with a hotel in a dualcomponent property provides developers with added efficiencies,
as the serviced apartment will use the back of house, facilities and
management of the hotel.

30,000
serviced apartments

Egypt | Cairo Market Overview | 2016 | Colliers International 15

Need for New and


Modern Hotels
Targeting the
Younger Generation
GAP OF LIFESTYLE HOTELS
Cairo hotels are on average 21 years old, and have seen little
refurbishment recently. Three-star hotels are even older: 31
years old. Cairo hotels are traditional and classical, with few
modern hotels appealing to the younger generations. 91.1%
of Egypts population falls within generations X, Y, Z. A young
population will require lifestyle hotels with modern design and
strong concept food and beverage outlets, but at an affordable
price point.

WHAT THIS MEANS FOR THE DEVELOPER


Modern design and a strong concept does not necessarily mean a
higher construction cost, but it would have a positive impact on guest
experience in a market where a lot of hotels are outdated. Catering
to younger generations requires developers to have strong food and
beverage concepts that can act as a draw factor to the hotel.
Hotels part of a micro-destination will see the most benefits. Being
within a closed mixed use scheme is perceived as safe, and being part
of a retail scheme will add to the appeal, especially for GCC guests.

55%
source markets

Need for strong


hotel brands
USE HOTEL BRANDS WITH STRONG
PRESENCE IN GCC
A total of 55% of Cairos source markets stem from the GCC.

WHAT THIS MEANS FOR THE DEVELOPER


It is important to have a hotel brand that already has a strong presence
and reputation in key GCC cities. In addition to international brands, also
consider strong regional brands such as Boudl Hotels and Resorts from
Saudi Arabia and Rotana from Abu Dhabi.

from the GCC


16

Egypt | Cairo Market Overview | 2016 | Colliers International

Office Market
WHAT IS THE TENANT
LOOKING FOR?

Flexibility
Security

WHAT IS MISSING IN THE


MARKET TODAY?

Value

International quality
build space
International quality
property management

WHAT GUARANTEES
A PREMIUM?
Efficienct property
management
Build quality
Parking
Convenience retail
and F&B

Egypt | Cairo Market Overview | 2016 | Colliers International 17

What is the tenant


looking for?
FLEXIBILITY IS VITAL BE TENANT CENTRIC
A number of established international corporations are now
selling office units/buildings they own. They are looking to rent
instead of owning, which will provide them more flexibility in
the event they need to shrink/ expand their workforce. The
recent uncertainty in the market has been the primary driver
of this decision for companies operating
in Cairo.

350,000sqm

WHAT THIS MEANS FOR THE DEVELOPER


When developing office space attention needs to be paid to floorplate
efficiency. Tenants are looking for flexibility in design. Landlord flexibility
is also required in a competitive market. Being tenant centric means
that the landlord will be more understanding and accommodative
towards changing requirements of the tenants. With approximately
350,000 m2 of office space expected to be delivered over the next
5 years, being tenant centric will help secure and maintain healthy
occupancy levels in the developments.

new office space in 2021

MODERN AESTHETICS
LARGE LANDSCAPED GARDENS
AND WATER FEATURES

ATTENTION TO OCCUPATIONAL SPACE


UTILISATION AND COST
In recent years many private sector occupiers have focused
attention on occupational space efficiency as they have
become more rigorous in their management of property costs.
While there are a number of new office parks developed
along modern aesthetics (although limited in international
quality build standards) with large landscaped gardens and
water features, the maintenance costs of such developments
translate into higher rentals for tenants.

WHAT THIS MEANS FOR THE DEVELOPER


The strategic decision on selecting office space for a global tenant
generally lies in the hands of a management team initially outside the
country. Although location and build quality are of primary concern,
operating costs that fail to justify value are less likely to be attractive to
prospective tenants.

18

Egypt | Cairo Market Overview | 2016 | Colliers International

What is missing in
the market today?
SHORTAGE OF INTERNATIONAL QUALITY
BUILD SPACE
The majority of Cairos office space does not meet international
building standards. Utilities, services and property
management standards employed within local office buildings
lack standard quality. It is Colliers understanding that this has
had a detrimental affect on global corporates ability to lease
office space in Cairo.

WHAT THIS MEANS FOR THE DEVELOPER


The location of the development primarily defines the target market and
thereby build quality. The overall office market however is significantly
undersupplied, and office supply of international build quality standards
are especially limited. In order to attract established global and regional
tenants, international build standards must be achieved and maintained.
This includes maintaining standard property management procedure
and utilities/ amenities/ services within the development or within the
immediate catchment area.

What guarantees a
premium?

25% - 30%

KEY INGREDIENTS FOR INCREASED


PROJECT REVENUE

rental premium for higher standards

While build quality is of primary concern, the presence of


convenience retail and F&B within the development or
within the immediate catchment area are also of significant
importance when selecting office space. Although the market
continues to remain undersupplied, recent handovers of
a number of commercial developments have resulted in
landlords aggressively competing for their target tenants. Rent
free periods and fit out contributions by the landlord has also
been witnessed in the market recently in order to attract and
secure key tenants.

PARKING

RETAIL

UTILITIES

WHAT THIS MEANS FOR THE DEVELOPER


Although the market remains price sensitive, commercial developments
combining international standard build quality, parking provisions,
utilities and amenities including convenience retail within the
development can successfully achieve 25% - 30% rental premium
above developments that fail to do so.

AMENITIES

Egypt | Cairo Market Overview | 2016 | Colliers International 19

Healthcare Market
HOW MUCH IS
REQUIRED?
WHAT IS REQUIRED?
Built to suit
healthcare properties
are required to meet
current demand and
improve efficiencies.

20

WHY BUILD?

4.4m sqm of hospitals


space and 2.7m sqm of
clinics space in the next
10 years.

Egypt | Cairo Market Overview | 2016 | Colliers International

Low risk profile Hospital buildings are


pre-let and clinics can be
sold off plan

KEY MESSAGE
Egypts healthcare offers significant opportunities for real estate developers and investors seeking long term
sustainable return by way of developing healthcare facilities (hospitals, daycares, medical centers) for sale or lease to
operators and doctors.

STRONG DEMAND FOR HEALTHCARE: WHY?

Demographics: 77% of the population is generation Y and


Z categorising Egypts population as young. However, it is
important to note that healthcare expenditure significantly
increases post the age of 40 Egypt has around
22.7 million people over the age of 40.
Health insurance: in 2010 around 50% of the population
was covered by health insurance and MoH aim is to cover
around 70% of the population by 2016. In addition, it is
expected that 20% of the population has private insurance
coverage.
Lifestyle Diseases: lifestyle diseases are on the rise with
increasing number of people suffering from diabetes,
hypertension, obesity, hyperlipidemia etc.
Some key statistics:
- Diabetes: 6.5% of the total population suffer from
diabetes.

Gen Z

Gen Y

Gen X

Baby
Boomers

Silent
Generation

41.1%

33.1%

13.9%

9.2%

2.7%

Age Range

Population: Egypts population is 87.8 million (15th in the


world and largest in North Africa), it is projected
to grow at 2.3% per annum to reach 110.2 million
by 2025.

80-89
75-70
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4

Silent Generation 2.7%

Baby Boomers 9.2%


Gen X 13.9%

Gen Y & Z 77.2%

- Hypertension: 5% of the population suffers from


hypertension.
- Obesity: 33.1% of the population suffer from obesity;
women suffered more from obesity with approximately
44.5% of the women suffering from obesity whilst only
21.4% of the males suffer from obesity.
- Hyperlipidaemia: 38.6% of the population suffered
from raised cholesterol levels.
- Accidents: number of road accidents in Cairo during
2013 was 13,957, 24% increase from 2012.
- Stroke: The volume of patient deaths from stroke has
risen over the last 10 years, increasing from 28,800 in
2002 to 33,600 in 2012

Male %

Female %

DEMAND FOR HEALTHCARE PROPERTIES TILL 2025

HOSPITALS

EGYPT

CLINICS

EGYPT

AREA sqm

AREA sqm

INVESTMENT EGP

INVESTMENT EGP

4.4m

40.5Bn

2.7m

17.8Bn

Quality of Service: Egypt has earned a strong


reputation within the region of having quality doctors
and infrastructure. This has helped the country earn a
reputation of a medical tourism hub for the region, mainly
North, East and West Africa & GCC, which increases the
utilisation of the existing healthcare facilities.
Clinical & Beauty Related Treatment: Increasing income
and population becoming aesthetically aware has resulted
in a growing demand for beauty and cosmetic related
treatments such as body contouring, anti-aging, lipoplasty
(liposuction), eyelid surgery, breast implants, nose jobs,
facelifts, Botox, medical spas, hair transplant etc. which has
created demand for large number of beauty and cosmetic
centers in upscale areas in Cairo and elsewhere.

CAIRO

AREA sqm

CAIRO

AREA sqm

875,000

500,000

INVESTMENT EGP

INVESTMENT EGP

8.0Bn

3.3Bn

*the estimates are based on shell and core and exclude land

Egypt | Cairo Market Overview | 2016 | Colliers International 21

Implications of
demand on healthcare
real estate?
Hospitals: based on current bed to population ratio, Egypt would
require an additional 35,000 beds over the next ten years and Cairo
(Giza included) would require an additional 7,000 beds. This means
Cairo alone requires an additional 4 to 5 hospitals annually to meet
demand and the estimated ten year incremental demand for Cairo
stands at 700,000m to 875,000m of hospital space.

DOCTORS
REQUIRED BY 2025

EGYPT

6000
CAIRO

1,100

Clinic and Health Centres: it is common practice for doctors to


maintain private practice clinics even when employed at government
or private hospitals. To cater to the annual increasing patient
demand, Egypt and Cairo (Giza included) require an additional 6,000
and 1,100 doctors per annum respectively. Therefore, clinic space
demand in Egypt and Cairo over the next 10 years would be in the
region of 2.7M m and 0.5M m respectively- At present significant
clinic demand is being serviced by office and residential space.

WHAT THIS MEANS FOR THE INVESTOR


With increased competition and demand for higher quality, real
estate developers would need to tie up with operators to create
bespoke healthcare facilities that need to be creative and efficient to
meet the increasing requirements of the healthcare sector.

22

Egypt | Cairo Market Overview | 2016 | Colliers International

Accelerating success.

Egypt | Cairo Market Overview | 2016 | Colliers International 23

554 offices in
66 countries on
6 continents
United States: 153
Canada: 34
Latin America: 24
Asia Pacific: 231
EMEA: 112

$2.5 billion
in annual revenue

2 billion

square metres
under management

16,000
Professionals
and staff

Ian Albert
Regional Director | MENA Region
ian.albert@colliers.com
Stuart Gissing
Regional Director | MENA Region
stuart.gissing@colliers.com
Mansoor Ahmed
Director | Head of Development Solutions | MENA Region
Healthcare | Education | Public Private Partnership (PPP)
mansoor.ahmed@colliers.com
Filippo Sona
Director | Head of Hotels | MENA Region
filippo.sona@colliers.com
Hassan Abou Alam
Senior Manager | Business Development | Egypt
Mobile +20 106 094 4550
hassan.aboualam@colliers.com
Colliers International | MENA Region
Dubai | United Arab Emirates
+971 4 453 7400

About Colliers International


Colliers International is a leading global real estate services company with more than 16,000 skilled professionals
operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals
provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic
advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project
management; workplace solutions; appraisal, valuation; customized research; and thought leadership consulting.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help
clients accelerate their success. Colliers has been ranked among the top 100 outsourcing firms by the International
Association of Outsourcing Professionals Global Outsourcing for 11 consecutive years, more than any other real
estate services firm.
In MENA, Colliers International has provided leading advisory services through its regional offices located in Dubai,
Abu Dhabi, Riyadh and Jeddah since 1996. The latest annual real estate survey by Euromoney named Colliers
International Best Advisor in the MENA region, UAE, Qatar and Saudi Arabia.
www.colliers.com/uae
Disclaimer
The information contained herein has been obtained from sources deemed reliable. While every
reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is
assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to
acting on any of the material contained in this report.
24

Greater Cairo | Real Estate Market Overview | 2015 | Colliers International

You might also like