The average rental rates for Cairo’s retail sector, mainly shopping malls, have increased by at least 9% in 2023 compared to 2022, according to a JLL report. 

The global real estate consultancy said that rental rates across primary and secondary malls in Q4-2023 have risen by 11% and 9% respectively, on an annual basis. 

The retail sector saw limited project launches and completions in Cairo in 2023, with nearly 83,000 sq. m. of gross leasable areas added to the city’s retail market, JLL said in its report.  

“In 2024, over 447,000 sq. m. of retail space is scheduled for completion,” the report said. “However, given the sector’s current market conditions, we expect further delays in project completions.” 

Egypt is grappling with dire economic situation marked by its worst-foreign currency crunch in decades and rising inflation rates. These challenges are expected to continue exerting pressures on consumer purchasing power and hence retail spending in 2024, JLL said.

Last week, Kuwait-based retail franchise conglomerate Alshaya Group announced that it was scaling down its operations in Egypt citing challenges facing foreign businesses. The company, which carries several renowned foreign brands, decided to shut down physical stores and online operations of five brands including Debenhams, Body Shop, Mothercare, Pinkberry and Claire’s and, to reduce the number of stores of another four brands.

On the other hand, JLL noted that many local brands have already shifted from e-commerce channels to physical stores inside shopping malls, as more Egyptians are looking for affordable alternatives to foreign products.  “It is expected that their positive performance will continue throughout 2024 and beyond,” the report added.

(Writing by Noha El Hennawy; editing by Seban Scaria seban.scaria@lseg.com)