Are serviced apartments the next big thing in the real estate market? Given the saturation of the luxury and mid-income housing segments, developers are looking to introduce new products in 2025 as way to make sure that demand keeps pace. To meet evolving consumer needs amid rising construction costs that are pushing unit prices up, the real estate division is currently advising developers to venture into serviced apartments as a promising new product, Head of the Federation of Egyptian Industries’ (FEI) real estate division, Osama Saad El Din told EnterpriseAM.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

But what is a serviced apartment, exactly? Serviced apartments are similar to rented units, but with some important differences. The units are fully finished, usually small in size, often leased immediately upon completion by specialized companies, and include services and amenities included in the rental price. These services often include things like housekeeping, laundry services, and even sometimes meals and a concierge, while internet, cleaning, and other amenities are included at no extra cost — an attractive prospect for those with busy lives or who will not use the property as their main place of residence.

Demand for serviced apartments reflects a changing market: Serviced apartments correspond to the market’s demand for adaptable offerings and meet the preferences of both current and potential clients, including foreign buyers and Egyptians abroad. The goal, Saad El Din says, is to adapt to market shifts and address rising costs that are changing customer habits.

The target audience: Egyptians living abroad, Arab and foreign tourists, and incoming students are among the primary target customers for these units, industry insiders told us. Small units are particularly in high demand in business hubs and tourism areas, positioning serviced apartments as a highly sought-after product for the foreseeable future.

Serviced units could be the new best seller during the next couple of years: Saad El Din sees demand for serviced apartments remaining strong in 2025 and 2026, with major developers already focusing their resources on these projects to meet both domestic and international demand. Some of Egypt’s top developers are already working on these projects and have begun marketing them internationally to attract more clients, he added.

Luxury appeal and competitive returns: These units prioritize luxury, premium finishes, and competitive features that promise significant investment returns, Saad El Din told us. He also noted that some companies — tied to major developers or operating independently — now offer marketing services for a share of the returns, which works to make investing in serviced apartments more secure.

A sought-after product in today’s market: Real estate marketing agency, B2B Marketing President Nehad Adel told EnterpriseAM that the market’s rising prices have driven demand for smaller units, particularly those under 50 sqm with long repayment plans and high savings potential. Serviced apartments in designated areas are likewise gaining traction for similar reasons, Adel explained to us, adding that Egypt’s real estate demand now falls into two categories — end-use properties, which are widely available across various price ranges, and investment properties, including serviced apartments and office spaces in commercial areas.

The price tag: The average price per sqm in these luxury units reaches EGP 100k, offering solid investment returns, while office spaces command higher prices, averaging EGP 150k per sqm, with potentially greater returns, according to Adel.

The new trend is in line with larger government targets: The real estate division is working in line with the country’s investment map to boost Egypt’s tourism infrastructure and increase hotel room capacity, Saad El Din told us. Developers have asked the government for more detailed investment maps for coastal areas, where demand for serviced apartments is expected to grow in line with projected tourism increases.

The industry is calling for the units to qualify for tourism incentives: Our sources confirmed to us that the FEI’s real estate division has asked the government to allow developers looking to build serviced apartments to benefit from the government’s EGP 50 bn subsidized loan program for hospitality companies. We also heard that the government has given its preliminary approval to the proposal.

Serviced units are already a big feature of the new capital: The business district in the new capital will host many of these serviced apartments, as will similar developments in Ras El Hekma and New Alamein.

Serviced apartments show that real estate is becoming more than just a safe haven asset: Mohamed El Bustani, the deputy head of the Federation of Egyptian Chambers of Commerce’s real estate division, told EnterpriseAM that the real estate market is expanding, noting that Egypt’s current economic environment has made real estate an attractive investment option, beyond its traditional role as a safe haven asset.

Your top infrastructure stories for the week:

  • Egypt and Italy are launching a new ro-ro shipping line in November connectingDamietta Port with Italy’s Port of Trieste. The shipping line will facilitate the transport of perishable agricultural commodities to European markets.
  • New hospitals in the pipeline: The government will offer up 21 plots of land to the private sector to develop the country’s healthcare sector in an effort to add 173k beds to the country’s residential capacity by 2030.
  • New Egyptian-Libyan industrial complex in the works? An Egyptian business delegation agreed with its Libyan counterpart to set up a comprehensive industrial complex leveraging Egyptian raw materials to serve as a trade corridor to Algeria, Tunisia, and other African markets.
Tags: