Jones Lang LaSalle releases Q3-2012 Cairo real estate report
- Egypt: Tuesday, October 30 - 2012 at 11:58
- PRESS RELEASE
Jones Lang LaSalle, the world's leading real estate investment and advisory firm, has released its third quarter (Q3) 2012 Cairo Real Estate Overview report. In summary it concludes that the Cairo real estate market is poised for recovery as investor confidence returns due to a more stable political environment after the recent presidential elections and the appointment of a new government.
Summary highlights, Cairo Market Overview, Q3 2012:
•The Egyptian economy was heavily hit by the revolution of 2011, with real GDP of just 1.8% recorded last year. While the political situation has now stabilised, the economy is expected to only recover slowly, with IHS Global Insights predicting real GDP growth of 1.9% in 2012 and 2.8% in 2013.
•Negotiations with the IMF in respect of the increased loan of $4.8bn are progressing but have not yet been finalised. A recent meeting between President Mohamed Morsi, and IMF Managing Director Christine Lagarde led to a technical team visiting Cairo to finalise the details of the IMF's financial assistance.
•The new government is aiming to achieve nominal growth of 4% to 5% this year. It estimates that this will require a total of $45bn in investment, significantly above the agreed loans from the IMF and Qatar.
•According to the Central Bank, Egypt's foreign exchange reserves totalled $15.1bn at the end of July, after experiencing a sharp fall earlier in the year. Qatar has contributed an amount of $500m, which was largely responsible for the increase of $685m reported in July.
•The government is studying new laws to impose fines on companies undertaking commercial activities from residential buildings. If enforced, this will increase demand for space in purpose built office premises.
•An indication of the returning economic confidence is that 703 new companies have started operations across Egypt in September.
•The Cairo Stock market has responded positively since the appointment of the new president, with Egypt's benchmark EGX30 index increasing by 9% in September.
•The government is undertaking major efforts to boost tourism as this sector contributes 12% of GDP and employs 4 million workers (12.6% of the labour force) Several countries including USA, Japan and China have lifted travel bans to Egypt and the direct contribution of travel and tourism to GDP is projected to grow to $16.2bn in 2012. (World Travel and Tourism Council, WTTC)
•Expressing their confidence in the future of the Cairo real estate market, Al-Futtaim Group and Emaar Properties (two of the UAE's largest developers) have announced plans to join forces to develop Cairo Gate, a $830m retail and entertainment complex on a 16 acre site on the Cairo to Alexandria desert highway.
•Another indicator of increased sales activity comes from Amer Group that has recently declared real estate sales of around $388m over the past 9 months. Most of these sales are from residential units in projects to be delivered to the market over the coming two years.
Craig Plumb, Head of Research at Jones Lang LaSalle in MENA, commented on the Q3 2012 report, "Egypt appears to be on track for a return to more robust economic growth. It is evident that the new Government is pro-investment and will be working hard to encourage a more dynamic market environment. While the political situation remains fragile and some caution inevitably remains, we would anticipate increased demand across the Cairo market over the next 12 months, providing the Government can maintain political and economic stability."
Articles in this section are primarily provided directly by the companies appearing or PR agencies which are solely responsible for the content. The companies concerned may use the above content on their respective web sites provided they link back to http://www.ameinfo.com
Any opinions, advice, statements, offers or other information expressed in this section of the AMEinfo.com Web site are those of the authors and do not necessarily reflect the views of Mediaquest FZ LLC. Mediaquest FZ LLC is not responsible or liable for the content, accuracy or reliability of any material, advice, opinion or statement in this section of the AMEinfo.com Web site.