Expectations and Opportunities in the Commercial Real Estate Market in Egypt in 2023

The commercial real estate market in Egypt is considered one of the most important economic sectors that has experienced rapid development in recent years. With the Egyptian government's focus on enhancing the investment climate and improving the business environment, it is anticipated that this sector will witness sustainable growth and attract both domestic and foreign investments in 2023 and beyond.

Egypt is considered the gateway to the Middle East and a significant investment destination due to its strategic location and robust economy. The advanced infrastructure and positive political and economic developments are attracting an increasing interest from investors seeking to capitalize on employment opportunities and anticipated economic growth in the Egyptian market. These positive factors are expected to reflect on the commercial real estate market in Egypt in 2023. Both local and foreign investments are anticipated to increase significantly, leading to a surge in demand for commercial properties and an improvement in the performance of this sector.

Among the commercial sectors poised to benefit from this anticipated growth, the commercial real estate sector in Cairo takes the lead. Cairo, as the capital of Egypt and the largest city in the Middle East in terms of population, garners significant interest from investors aiming to establish and expand their businesses in this vibrant city. Furthermore, Egypt's hospitality and tourism sector are witnessing notable growth, boosting the demand for commercial properties in tourist areas, commercial hubs, and vital districts. The hospitality sector is considered one of the most important economic drivers in the country, significantly contributing to enhancing economic growth and increasing investment opportunities in the commercial real estate market.

It is expected that the commercial real estate market in Egypt will witness promising growth. This sector will benefit from economic reforms, improvements in the business environment, and the increasing demand for commercial properties in Cairo and tourist areas. Interest in investing in this sector is expected to continue, thus providing new opportunities for both local and foreign investors to capitalize on future growth expectations and achieve profitable returns. However, it is important to note that the commercial real estate market in Egypt faces certain challenges. Among these challenges are the laws and regulations surrounding real estate investment, which may impact the ease of investment and operations in this sector. Additionally, the market might face short-term fluctuations due to general economic conditions or political events.

The future of the commercial real estate market in Egypt in 2023 and beyond appears promising and bright. Exciting investment opportunities are available in this sector, and the Egyptian government is diligently working to provide a conducive investment environment and encourage both domestic and foreign investments. Growth and development are expected to persist in Egypt's commercial real estate market, with increasing interest in Cairo, tourist areas, and the hospitality sector.

The reality of investment in the commercial sector:

Investing in the commercial sector involves allocating capital and resources to purchase and develop commercial businesses. This includes buying stores, offices, and commercial buildings, leasing or using them to provide services and goods to customers and consumers. Commercial sector investments are considered a fundamental part of economic activity, fostering economic growth and expansion. They contribute to job creation, boost trade, stimulate innovation, and enhance economic prosperity. There are several forms of investment in the commercial sector. This might involve investing in small and medium-sized stores and shops, commercial centers and large complexes, offices and commercial buildings, as well as hotels and restaurants.

Investments in the commercial sector are popular among investors due to the potential financial returns they can yield. However, they also carry certain risks. These may relate to changes in demand and supply, economic and political fluctuations, local legislation and laws, technological advancements, competition, and other factors that could impact business performance. Hence, conducting a thorough market study and evaluating opportunities and risks is recommended before making an investment decision in the commercial sector. Financial consultants and experts in the field can assist in providing appropriate advice and guidance to investors.

Expectations of increased foreign investments in Egypt's commercial real estate market:

There are expectations of increased foreign investments in Egypt's commercial real estate market. This anticipation is driven by several positive factors that enhance the attractiveness of the Egyptian market for foreign investors.

• Firstly, the Egyptian government adopts economic policies and reforms aimed at improving the investment climate and providing a conducive and encouraging business environment. Measures have been taken to streamline administrative procedures and reduce bureaucracy, in addition to incentivizing investment and safeguarding investors' rights.
• Secondly, Egypt benefits from a strategic geographical location, making it one of the key economic centers in the Middle East and North Africa. Cairo, the capital of Egypt, is considered a gateway for trade and business in the region, rendering it an attractive destination for foreign investments in the commercial real estate sector.
• Thirdly, Egypt has experienced significant economic development and sustained growth in recent years. This growth enhances confidence in the Egyptian market and encourages foreign investors to invest in the commercial real estate sector, considering real estate as a safe and profitable investment.
• Fourthly, Egypt is undergoing rapid infrastructure development, particularly in major economic and commercial areas. There are promising investment opportunities in developing commercial complexes, business centers, and industrial zones, attracting foreign investments in this sector.

The benefits of investing in the commercial sector:

• Investors can achieve good returns from investing in the commercial sector, especially if the right project is chosen and managed effectively.
• Investing in the commercial sector presents an opportunity for diversification in investment portfolios and reduces potential risks.
• The commercial sector is characterized by stability and consistency, with continuous demand throughout the year.
• Investors can achieve high investment returns in the commercial sector, especially if the right project is chosen and managed effectively.
• Investors can generate a steady annual income from investing in the commercial sector by leasing commercial spaces and offices.
• Investors have the opportunity to invest in multiple commercial projects in the New Administrative Capital, increasing the potential for high investment returns.
• The Egyptian government offers various forms of support and facilitation to investors in the commercial sector, making investment in this sector a good opportunity for investors.

Important advice for new investors in the commercial sector:

• Before investing, conduct a thorough market study. Look for opportunities, unmet needs, and analyze the demand and supply in the targeted market. A good understanding of the market and potential customers will help in making well-informed investment decisions.
• Develop a clear and specific investment plan. Define your investment goals and an appropriate timeline. The plan should include estimates of costs, expected returns, marketing strategies, and risk management.
• Build a professional team that can assist you in your investment journey. You might need financial consultants, lawyers, real estate agents, marketing experts, project managers, as needed. These experts can provide advice, guidance, and necessary support for the success of your investments.
• It is advisable to diversify your investments in the commercial sector. Diversification in asset types, locations, and industries presents an opportunity to mitigate risks and increase potential returns. Do not rely entirely on a single investment, but distribute your investments across several different projects.
• Carefully analyze and manage risks. Evaluate potential risks and develop strategies to deal with them. Risk management strategies may include insurance, investment diversification, and conducting periodic assessments of projects.
• Continue to enhance your knowledge and skills in commercial investment. Seek appropriate educational and training opportunities, and benefit from experiences and advice from professionals in the industry. Continuous learning will aid in making better decisions and achieving greater success in your investments.

Remember, investing in the commercial sector involves risks and may require focused and continuous efforts. It's important to be prepared to deal with challenges and remain patient on your investment journey. Simultaneously, investing in the commercial sector can be rewarding and intriguing if the market is carefully studied and coherent investment procedures are followed.

The impact of the rise in the dollar on real estate prices:

Real estate prices in Egypt have been significantly affected following the increase in the value of the US dollar and the multiple devaluations of the Egyptian pound. Changes in real estate investment prices have occurred due to the rising costs of construction, reinforcement steel, and essential materials like cement. Real estate prices in Egypt have surged by around 5-10%. This rise in property prices has led to a decline and slowdown in the pace of escalation in the latter half of 2023. A qualitative leap in the real estate market is expected in the coming months.

Real Estate Market Analysis in Egypt 2023:

The real estate market in Egypt has seen significant growth over the past decades and continues to experience further evolution and growth presently. Economic factors remain among the most influential elements impacting the Egyptian real estate market, as continuous economic growth leads to increased demand for properties and rising prices. The Egyptian economy is expected to witness notable growth in the upcoming years, owing to economic reforms aimed at improving the investment climate in the country. However, the Egyptian real estate market is facing uncertainty due to current economic conditions, which include inflation hikes and currency devaluation.

The real estate market is experiencing a complex and intertwined crisis during this period, facing additional pressures due to rising costs of both rent and ownership. A qualitative leap in the real estate market is expected in the coming months.

Future Expectations for the Real Estate Market in Egypt:

• The Egyptian government is expected to continue implementing large-scale projects and urban development in the country, leading to an increased demand for properties and higher investments in this sector.
• The real estate market in Egypt can be relied upon as an investment source, provided that care, caution, and thorough analysis of the current situation and future expectations are exercised.
• Experts anticipate a rise in property prices in new areas in Egypt due to the presence of a robust infrastructure, integrated facilities, and modern technologies.
• Additionally, experts foresee an increase in demand for commercial and hospitality properties in Egypt owing to the rise in tourism in the country.

How can real estate investors in Egypt benefit from inflation?

• Investing in commercial and hospitality properties, as they can yield higher returns compared to residential properties.
• Investing in properties in emerging areas, as they can generate higher returns due to the continual increase in demand for real estate in these areas.
• Investing in ready properties, as higher returns can be achieved due to increased demand for ready-to-move-in real estate.
• Investing in small residential properties, as higher returns can be possible due to increased demand for smaller properties.
• Investing in properties ready for immediate delivery, as higher returns can be attained due to increased demand for properties available for immediate occupancy.

It is important to exercise caution and conduct a thorough analysis of the current situation and future expectations before making any investment decisions in this sector. Real estate investors in Egypt can benefit from the expertise of Egyptian real estate market experts to make sound purchasing decisions.

The commercial real estate market in Egypt faces several challenges amidst the current economic conditions, including high inflation and the devaluation of the Egyptian pound. However, the Egyptian real estate market remains a good investment opportunity, provided there is careful consideration, caution, and a good analysis of the current situation and future expectations. Real estate investors in Egypt can leverage the expertise of Egyptian real estate market experts to make informed purchasing decisions. The real estate market in Egypt is expected to witness an increase in prices in the coming period. Therefore, it's important to be cautious and conduct a thorough analysis of the current situation and future expectations before making any investment decisions in this sector.

The commercial real estate market in Egypt is a vital and significant sector within the Egyptian economy. Real estate investors can benefit from the investment opportunities available in this sector provided they exercise caution and conduct a thorough analysis of the current situation and future expectations.