Professional Documents
Culture Documents
Accelerating success.
2016
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
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
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
Residential Market
WHERES THE
MARKET POTENTIAL?
WHY ARE
THEY BUYING?
WHATS
SELLING?
Parking space
Understanding
affordability levels
Attractive ticket price
Gated / secure
community
Reserved family
assets
Egypt
Egypt
| Cityscape
| Cairo Market Overview | 2016 | Colliers International
52%
of households
US$
35,000
US$
26,000
130sqm
apartment in 6th October
City can can sell for up to
US$
65,000
E X T E N D E D
payment plans
up to
years
50%
approximately
of Cairos population
15
between
the
ages of
40
Population
increasing
annually
Whats Selling?
25%
more
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.
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.
Average
sales prices
masterplanned communities
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
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?
The necessary
glue of a mixed-use
development
10
eFesenko / Shutterstock.com
11
Heliopolis
Zamalek
Nasr City
Mohandessein
New Cairo
Maadi
6 of October
th
12
Retail
is indispensable
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
20%
domestic
55%
GCC
DEMAND
500
serviced apartments
vs.
30,000
serviced apartments
55%
source markets
Office Market
WHAT IS THE TENANT
LOOKING FOR?
Flexibility
Security
Value
International quality
build space
International quality
property management
WHAT GUARANTEES
A PREMIUM?
Efficienct property
management
Build quality
Parking
Convenience retail
and F&B
350,000sqm
MODERN AESTHETICS
LARGE LANDSCAPED GARDENS
AND WATER FEATURES
18
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 guarantees a
premium?
25% - 30%
PARKING
RETAIL
UTILITIES
AMENITIES
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?
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.
Gen Z
Gen Y
Gen X
Baby
Boomers
Silent
Generation
41.1%
33.1%
13.9%
9.2%
2.7%
Age Range
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
Male %
Female %
HOSPITALS
EGYPT
CLINICS
EGYPT
AREA sqm
AREA sqm
INVESTMENT EGP
INVESTMENT EGP
4.4m
40.5Bn
2.7m
17.8Bn
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
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
22
Accelerating success.
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