In Q1 2024, 7,000 residential units were completed in Cairo, and around 24,000 units will be delivered by year-end

Average sale and rental prices increased by 83% and 42% respectively in 6th October, and by 95% and 43% in New Cairo

Cairo to add approximately 1,400 keys to the current hotel stock in 2024

Rising FDI inflows position the country as an appealing destination for future investments 

Cairo, Egypt: As the largest project market in Africa and the third largest in the Middle East and North Africa (MENA), the construction industry in Egypt is slated for consistent value growth until the end of the decade, according to JLL’s latest Egypt Construction Market Intelligence Report. 

Citing trends from the latest Mordor Intelligence study, JLL’s Q1 2024 report reveals that the growth forecast for the construction industry in Egypt is estimated to exceed 8% (compounded annual growth rate) until 2029, driven largely by increased government spending, active public-private partnerships, the rise of green buildings, a steadfast focus on infrastructure development, and continued investments in residential and mixed-use sectors. 

Based on insights gathered from industry sources and experts, the report affirms that despite prevailing national and global economic challenges, Egypt holds a share of USD 515 billion (12%) of the total pipeline value of unawarded projects in the wider MENA region, which is projected to reach USD 3.9 trillion. Taking up the third position in the MENA after Saudi Arabia and the UAE, Egypt’s residential projects make up around USD 36 billion (21%) of this share while mixed-use projects in the country account for USD 115 billion (22%).

Fuelled by a strong start in Q1 2024 and with construction and handovers progressing at full speed, the Egyptian capital, Cairo, demonstrated the resiliency of its residential sector. More than 7,000 units were completed in Q1, primarily within masterplan developments, adding to a total stock of approximately 276,000 units while around 24,000 units will be delivered throughout 2024. According to JLL Research, the average sale price in 6th October has seen an 83% year-on-year increase, while rental prices have risen by 42%. In New Cairo, JLL's data indicates an even greater increase with average sale prices up by 95% year-on-year and average rents increasing by 43%.

Egypt’s tourism sector took off to a promising start in 2024, bolstered by a new initiative involving a substantial EGP 50 billion investment to enhance the high-growth sector that saw a record performance in 2023 after having welcomed almost 15 million visitors. Under the new initiative, the government has introduced loan facilities and incentives to boost private sector participation and fulfil Egypt's ambitious goal of increasing its hotel capacity by nearly 250,000 keys as it prepares to welcome 30 million visitors by 2028.

In Q1 2024, Cairo's total hotel stock remained at 26,700 keys, with no major additions. However, new, and renovated hotels expected to open later in the year will add approximately 1,400 keys to the current stock.

Laura Morgan, Market Intelligence Lead MEA, Project & Development Services, JLL, said: “Currency volatility, inflation, regional and global geopolitical challenges are impacting market dynamics in Egypt, and the parallel market for the US dollar is leading to further price manipulation and greater market instability in the country’s construction sector. However, increased FDI commitments provide ample liquidity, and strategic government reforms are reducing market speculation, helping boost investor confidence. Drawing on the strengths of its tourism sector and in line with its Vision 2030 goals, Egypt continues to expand its construction sector through continued investments and partnerships to solidify its position as a leading market in the region."

Egypt’s government has been accelerating efforts to address macroeconomic pressures to stabilise both market volatility and devaluation of the local currency, stated the JLL report. The Egyptian currency underwent its fourth round of significant flotation against the USD in March 2024 following which the Central Bank of Egypt (CBE) liberalised the exchange rate to attract foreign currency and combat record inflation. Although CBE secured a new USD 8 billion loan agreement with the International Monetary Fund (IMF), its control over the exchange rate and limitations on foreign currency transactions led to the emergence of a parallel market for USD, leading to market imbalances and speculation by material suppliers. 

Ahead of the currency liberation, Egypt secured its largest-ever Foreign Direct Investment (FDI) deal, injecting USD 24 billion into the market and offsetting USD 11 billion of debt through a local currency payout for the Ras El Hekma deal with the UAE. In addition, Egypt received over USD 20 billion from international institutions and development partners to support its economic reform programmes.

These financial injections are expected to ease the country’s economic burdens and position Egypt as an appealing destination for future investments, said the JLL report. 

While rising oil prices in Q3 2023 led commodity prices in Egypt to experience a 5% increase, the World Bank predicts oil prices to average USD 81 per barrel in both 2024 and 2025. Ongoing currency fluctuations, speculation by suppliers, and inflation are leading to significant price increases for imported construction materials and locally manufactured materials with imported raw materials. However, following the liberalisation of the exchange rate in March, construction material prices have relatively cooled. JLL has observed fluctuations in prices for key construction materials with rebar prices witnessing a 41% year-on-year increase, copper cables rising by 112% year-on-year, and aluminium sections experiencing a 32% increase. 

About JLL
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage, and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500 company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 108,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.

About JLL MEA
Across the Middle East and Africa (MEA) JLL is a leading player in the real estate and hospitality services markets. The firm has worked in 35 countries across the region and employs over 1900 internationally qualified professionals across its offices in Dubai, Abu Dhabi, Riyadh, Jeddah, Al Khobar, Cairo, Casablanca, Cape Town, Johannesburg and Nairobi. For further information, visit jll-mena.com.

Media Contact:
May Ong
JLL MEA | +971 50 9116448
may.ong@jll.com 

Nisha Celina | Janine Alamir
Burson | +971 50 8729518
nisha.celina@bursonglobal.com | janine.alamir@bursonglobal.com 
bursonglobal.com