Real estate consultancy firm JLL put Cairo’s real estate market under the spotlight in its latest report (pdf) for the first quarter of the year. While the real estate market appeared more resilient than anticipated months ago with cooling inflation and more stable EGP, debates about the future growth of the sector have become more complicated, with the residential, commercial, hospitality, and retail markets each being affected by very different trends

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ADMINISTRATIVE REAL ESTATE IS BACK ON THE UP IN 1Q 2025-

The administrative real estate market in Cairo has begun to show a noticeable recovery, with approximately 58k sqm of new space coming online during the first quarter of 2025. This brings the total supply to around 1.9 mn sqm, JLL MENA’s head of marketing Anood Haddad said during a presentation before the release. Haddad anticipates a market surge in supply by the end of 2025, following the completion of projects in the new capital and New Cairo.

Large companies — particularly multinationals — are now showing a preference for modern, flexible administrative spaces in central locations. This shift is creating a high-quality demand that is driving up average rent prices. The post-pandemic work environment has fostered a shift toward hybrid schedules, resulting in an increased demand for shared spaces and fitted-out offices, Haddad indicated.

Cairo’s office market is also experiencing a boom in rental prices — fueled by increased demand and limited market supply. The first quarter of the year saw the addition of 10.5k sqm to the office market, with an additional 615.3 sqm expected by year-end. This should help narrow the gap between supply and demand for grade A spaces. Average vacancy rates for grade A office spaces also fell from 10.9% to 8.6% during the previous quarter, pushing average rental prices for grade A spaces up by 4.7% and prime spaces by 2.9% compared to last year.

RESIDENTIAL SECTOR SHOWS STRONG PERFORMANCE DESPITE HEADWINDS-

The residential real estate market in the capital continues to see significant momentum, driven by population growth and robust local demand — accounting for over 95% of buyers, according to speakers at the event. Residential properties, especially in new cities such as New Cairo, Sheikh Zayed, and the new capital, are seeing a remarkable increase in prices — ranging between 15-20% annually — due to rising construction costs.

This trend is projected to continue throughout 2025, with developers focusing on delivering ongoing projects and launching new phases. This comes amidst increasing demand from middle- and upper-income buyers seeking homes in serviced, gated communities. This anticipated growth is underpinned by strong local and foreign demand and improving economic conditions. Forecasts suggest that developers who offer smaller, affordable, finished townhouses and apartments within mixed-use developments will have a competitive edge.

BY THE NUMBER- About 7.5k new residential units were delivered in 1Q 2025, bringing the total offerings to over 300k units. Meanwhile, sale and rental prices in key areas like Sixth of October and New Cairo continued their upward trajectory, achieving moderate y-o-y growth — reflecting sustained demand. An additional 28.5k new units are expected to be added this year, predominantly in east Greater Cairo — further expanding the market’s absorption capacity.

The rising cost of living has triggered a significant shift in buying preferences, with many buyers now seeking to rent in upscale neighborhoods — often beyond their purchasing capacity — to sustain a higher standard of living. As a result, more property owners are renting out units, offering possibilities for tenants looking to upgrade their lifestyles and for owners looking to maximize returns on investments.

HOSPITALITY IS ALSO SEEING A RECOVERY-

The hospitality sector is experiencing a notable improved performance — bolstered by the recovery in tourism and an influx of visitors from European and Gulf markets. The quarterly report indicated that hotel occupancy rates have steadily climbed since the beginning of the year, particularly in Cairo, Hurghada, and Sharm El Sheikh.

AND- The year 2025 is expected to bring more progress fueled by new investments in luxury and mid-range hotels, alongside the resurgence of cultural and business tourism in the country. Global hospitality brands are also showing increased interest in Egypt as a regional hub — especially with planned expansions in the new capital.

BY THE NUMBERS- The opening of two new five-star hotels in 1Q 2025, the Nile Hilton Maadi Cairo and Sofitel Cairo in Downtown, added approximately 870 rooms — providing a significant boost to Cairo’s hospitality sector. Another 650 rooms in the four- and five-star categories are anticipated to come online by the end of the year, increasing the sector’s total supply beyond the current 27.8k rooms, as stated in the firm’s quarterly report.

RETAIL SECTOR EXPERIMENTS WITH INTERACTIVE SHOPPING MALLS-

Developers are focusing on offering varied visitor experiences, blending entertainment and dining with traditional shopping. Major shopping malls have maintained stable tenancy levels and shown slight performance improvements, despite challenges coming on the back of citizens’ weakened purchasing power.

Demand is expected to remain driven by local and international brands seeking expansion, particularly in Greater Cairo and coastal cities, according to JLL. The integration of retail with residential and administrative spaces within master-planned projects is set to become the prevailing market trend in the coming years.

BY THE NUMBERS-The retail sector in the capital saw modest growth in 1Q 2025, with 27k sqm of newly added spaces, bringing the total supply to 3.22 mn sqm. East Greater Cairo, notably New Cairo and the New Administrative Capital, is expected to lead future growth in the sector. This will be driven by the addition of new spaces in commercial complexes, ongoing expansions in existing projects, and the emergence of community shopping centers. Smaller, open-air development projects are outperforming their larger counterparts. The sector’s gradual recovery is evident in improved sales, demand, and occupancy, with the average vacancy rate declining to 7.2% in the first quarter.

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