Daily News Egypt

Commercial projects acquires lion's share of projects’ demand - Daily News Egypt

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Commercial projects acquires lion’s share of projects’ demand

The West and East Cairo regions had the highest percentage of companies investing in the commercial sector during the past year, followed by the New Administrative Capital (NAC).

Commercial and administrative projects have witnessed growth during the last period, contrary to the slowdown of residential real estate sector. The project accounted for the highest percentage of sales in 2018, since most companies tended to diversify their products to stimulate sales.

Real estate developers expected that the commercial and administrative sector will continue its growth trend during the coming period. Especially that developers aim to continue developing new commercial, administrative and medical projects.

The West and East Cairo regions had the highest percentage of companies investing in the commercial sector during the past year, followed by the New Administrative Capital (NAC).

According to NextMove exhibitors, companies participating in the exhibition will showcase their best commercial and administrative projects, mostly offering them for the first time.

The administrative and commercial projects in the NAC have the highest demand, compared to the rest of the new cities during the recent period, in light of the relative decline in housing demand.

Co-Owner of Royal for Real Estate Investment Karim Shaalan said that there is a great demand on administrative and commercial projects in east Cairo.

Shaalan noted that commercial and administrative units are attractive for customers who are willing to buy units for investment purposes because they have a high investment return.

CEO of Brickzey Property Management Ahmed Selim said that the valuation of such commercial and administrative projects is high whether by banks or by other financial entities, raising the listed company’s shares in stock market.

Selim added that some real estate developers tend to invest in administrative and commercial projects to compensate for part of their losses in residential projects, especially with the increase in construction costs after the increase in raw materials’ prices.

Selim explained that the large investment return for administrative and commercial projects attracted real estate developers especially in the provinces, adding that governorates are in an urgent need for such projects.

He noted that the saturation of the New Cairo area by commercial, administrative, and medical projects encouraged investors to move to the NAC as a promising market and witness growth in the volume of investments compared to new cities.

He pointed out that the selling prices in service projects range from EGP 30,000 to EGP 40,000 per square metre for the administrative and medical units and from EGP 60,000 to EGP 100,000 for commercial units.

Country Head Egypt at commercial property services company Jones Lang LaSalle (JLL), Ayman Sami said that buying commercial and administrative units for investment purpose has increased during the past period to offset the sales of housing units that have absorbed investment demand in previous years.

Sami added that the Egyptian market is witnessing the implementation of commercial malls under the management of large companies, whether regional or international, which is a magnet for global brands that seek to increase sales.

He further noted that the increase in demand raises leasing prices, which is accepted by tenants because of their shops in malls increase their sales.

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