Office rents in Egypt to fall 30% in 2023 on higher inflation – Fitch Solutions

Office rents in Egypt to fall 30% in 2023 on higher inflation – Fitch Solutions

Office rents are predicted to fall sharply in Egypt in 2023 in US dollar terms as the country grapples with high inflation, a tight monetary policy and slowing economic growth, London-based research consultancy Fitch Solution said in its Q2 2023 report on the real estate sector.

“In the longer term, a stabilisation in GDP growth as well as in the growth of tertiary services output should provide some support for office space demand,” it added.

The average rent in Cairo, which has the highest rents, is set to fall by over 30% year-on-year to $17.4 per sq m per month. Giza and Alexandria’s declines will be steeper at 31.6% to $9.3 and 35.7% to $8.2 per sq m monthly, respectively.

Over the rest of its medium-term forecast period to 2027, the picture is brighter, with real GDP growth increasing to 5.1% in 2024, the inflation rate trending downwards and the monetary policy loosening, the report stated.

In terms of yields, Cairo and Giza will maintain the highest net yield of 8-10%, unchanged from recent years, followed by Alexandria (6-7%).

According to Fitch, there will be significant potential for expansion in the office real estate market, particularly as the growth of new cities creates more demand