{"id":674037,"date":"2025-10-22T00:00:00","date_gmt":"2025-10-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/the-real-estate-market-sees-structural-recovery-driven-by-real-demand-and-new-financing-trends-savills-says\/"},"modified":"2025-10-22T00:00:00","modified_gmt":"2025-10-22T00:00:00","slug":"the-real-estate-market-sees-structural-recovery-driven-by-real-demand-and-new-financing-trends-savills-says","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/the-real-estate-market-sees-structural-recovery-driven-by-real-demand-and-new-financing-trends-savills-says\/","title":{"rendered":"The real estate market sees structural recovery driven by real demand and new financing trends, Savills says"},"content":{"rendered":"

The Egyptian <\/strong>real estate<\/strong> market is going through a broad structural shift<\/strong>, with a positive outlook across major asset classes, according to real estate advisory firm Savills in its latest Cai<\/a>ro Property Market 2025 report (pdf)<\/a>. The report highlights changing demand patterns, new financing tools, and evolving consumer behavior that are reshaping the market. Signs of steady recovery are emerging amid continued macroeconomic stability, Savills Egypt head Catesby Langer-Paget said during a press conference attended by EnterpriseAM. Savills noted strong investor and developer interest across all asset classes, as the market stabilizes, driven by solid demographic trends and the return of end users as key buyers.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

The commercial segment remains one of the market\u2019s main growth drivers<\/strong>, with more than 1.1 mn sqm of new supply expected over the next few years, strategic consultancy head Rania Nazmi said. Retail sales in Egypt are expected to grow from USD 149.7 bn in 2025 to USD 201.4 bn by 2030, according to Oxford Economics. The expansion, coupled with the entry of new local and global brands, is intensifying competition and strengthening tenants\u2019 negotiating power, Nazmi added.<\/p>\n

The market is showing early signs of recovery<\/strong>, helped by new mid-market and GCC retail brands entering Egypt, particularly in F&B. Economic pressures have also helped local brands, many of which started online, expand into physical retail, operations head Sherine Badreldine said.<\/p>\n

With supply on the rise, effective property management has become a critical success <\/strong>factor<\/strong>, Badreldine said. Tenants are becoming more selective, often negotiating rent-free periods or landlord contributions to fit-out costs. Downtown Cairo is also regaining its commercial appeal thanks to adaptive reuse projects and government-led renovation efforts, the report said.<\/p>\n

The residential market remains a key pillar, with sale prices stable in USD despite EGP <\/strong>depreciation<\/strong>. Developers are working to maintain buyer confidence through modest reductions, longer payment plans, and a focus on finished, ready-to-deliver units.<\/p>\n

Affordability is the main challenge. <\/strong>The average monthly installment for an apartment priced at EGP 6 mn \u2014 the entry point in new urban communities \u2014 is around EGP 42k, affordable to only 5-10% of Egyptian households, the report noted.<\/p>\n

The market is gradually moving toward new financing mechanisms such as REITs<\/strong>, which are expected to be formally regulated soon, to widen investor access. Fractional ownership models \u2014 which allow buyers to purchase shares rather than full units \u2014 are also gaining traction, particularly for serviced apartments. Foreign demand is on the rise, supported by property ownership reforms and Egypt\u2019s growing appeal as a secondary home destination, Nazmi said.<\/p>\n

Branded residences are emerging as one of the fastest-growing subsegments in the <\/strong>market<\/strong>, with Cairo\u2019s supply expected to rise sevenfold by 2031 \u2014 from three operational projects in 2025 to around 22 by the end of the forecast period, Savills said.<\/p>\n

The expansion is being fueled by the sector\u2019s early-stage potential, strong investor <\/strong>appetite, and new partnerships with luxury hospitality and global design brands<\/strong>, such as Elie Saab, Nazmi said. The trend reflects a shift toward luxury, fully serviced living that blends lifestyle and investment. Still, the segment faces challenges, including blurred definitions \u2014 with some developers conflating serviced apartments with branded residences \u2014 and a limited track record, Nazmi added.<\/p>\n

HOSPITALITY SECTOR DOUBLES CAPACITY AS OCCUPANCY REBOUNDS- <\/p>\n

The hospitality sector continues to grow, supported by state plans to double national <\/strong>hotel capacity to 470k keys by 2028<\/strong>, up from 220k currently. Occupancy rates reached 75% in early 2025, signaling renewed investor and traveler confidence in Egypt as a leading tourism destination.<\/p>\n

New supply is increasingly catering to a broader traveler base<\/strong>, with growing focus on upper- and midscale brands such as Moxy and Hilton Garden Inn. In Downtown Cairo, historic properties are being converted into lifestyle hotels, including the Shepherd Hotel\u2019s transformation into a Mandarin Oriental and the Tahrir complex into an Autograph Collection property. Still, only around 25% of hotels initially slated to open this year have been delivered due to rising construction costs, Langer-Paget said.<\/p>\n

ADMINISTRATIVE MARKET SUFFERS FROM SUPPLY AND DEMAND MISMATCH- <\/p>\n

The office market continues to face a structural imbalance<\/strong> as developers focus on selling small units to individual investors for faster cashflow, leaving limited options for corporates \u2014 particularly multinationals \u2014 seeking large grade A office spaces, Nazmi said.<\/p>\n

This gap is opening opportunities for co-working and serviced office operators catering <\/strong>to SMEs and freelancers<\/strong>, Langer-Paget said. There are currently 44 co-working locations across Greater Cairo. REITs could also help plug the gap for large office assets thanks to their ability to acquire income-generating properties.<\/p>\n

Cairo remains highly competitive on pricing<\/strong>, with prime office rents averaging USD 723 per sqm per year \u2014 as opposed to around USD 1.6k in Dubai or Riyadh, according to Savills.<\/p>\n

EDUCATION, HEALTHCARE FACE STRONG DEMAND BUT LIMITED ACCESS TO FINANCE- <\/p>\n

Egypt\u2019s education sector is undergoing structural change fueled by rapid population <\/strong>growth<\/strong>, with students making up more than a third of the population. Despite strong demand and interest from operators to expand, projects remain capital-intensive and face high land and construction costs, as well as long payback periods, Nazmi told EnterpriseAM. A total of 182 new private schools opened during the 2024-25 academic year, mostly in the high-fee bracket, she added.<\/p>\n

The healthcare market is also expanding<\/strong>, supported by population growth and reforms such as the Universal Healthcare Law. Still, hospital construction remains one of the most expensive real estate investments due to complex technical requirements and land costs. The sector faces shortages of specialized operators and medical professionals, with only 0.7 doctors per 1k people \u2014 among the lowest ratios in the region, Nazmi said. Private healthcare spending is expected to grow at a 10.4% CAGR through 2030. <\/p>\n

The most efficient model is for developers to build and equip facilities, then sell them to <\/strong>specialized investors<\/strong>, who in turn contract qualified operators \u2014 reducing developers\u2019 exposure to long-term returns, Nazmi told EnterpriseAM.<\/p>\n

The real estate market continues to show resilience and evolving fundamentals<\/strong>, Savills executives said. The market is shifting back toward end users and long-term investors after speculative demand cooled during the peak of the EGP\u2019s depreciation. Professional consultancy and asset management are increasingly critical to guiding developers and investors and mitigating risk, Badreldine said. Projects that integrate strong advisory and management practices early on achieve higher occupancy and more consistent performance, reflecting a broader market shift toward long-term value and operational quality.<\/p>\n

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