Mixed-use retail and residential developments expand in Egypt

Benefitting from rising disposable incomes, a large, young consumer base, and a gradual return to political and economic stability, Egypt’s retail real estate market showed impressive expansion in 2015, with rental rates rising and vacancy rates falling even as the supply of formal, high-end retail supply increases. Foreign investors have flocked to the market in recent years, launching a number of ambitious mixed-use projects offering an array of recreational activities and international brands, including Cairo Festival City, Mirage Mall, Cleopatra Mall, and the Mall of Egypt. Investment in the sector is expected to continue rising over the medium term, particularly within the country’s fast-expanding retail supermarket and hypermarket segments (see overview).


Egypt’s retail market has been on a strong upwards trajectory in recent years, with retail sales rising by a compound annual growth rate of 14.2% between 2007 and 2011. This trend is driven largely by a young, tech-savvy population, growth in disposable incomes, and rising demand for formal and upscale retail options.

TGM, a marketing firm responsible for promoting the upcoming Cleopatra Mall and Cleopatra Plaza, reports that the country’s current shortage of distinctive retail units and shopping centres has allowed developers in Cairo to earn high returns on investments, with retail rents in Cairo standing close to rates in the United Arab Emirates (UAE), which is known for its strong retail culture.

Retail growth has continued to remain strong in 2015. According to Jones Lang LaSalle’s (JLL) Cairo Real Estate Market Overview – Q3 2015, vacancy rates within the retail segment fell by 5% year-on-year to hit 17%, while average retail rents recorded a 10% increase over Q3 2014, to reach $1600 per sq metre for prime retail space. “It is expected that the Egyptian retail market will witness an unprecedented growth over the upcoming years. Developers and workers in the retail sector are convinced that the market has a lot of potential that can aid the growth of the local retail sector, whereby the upcoming period will witness the launching of a number of brands and trademarks in the local market for the first time,” Philip Evans, solidarity partner at TGM, told Daily News Egypt in an October 2015 interview.

Foreign Investment

Foreign investors have flocked to Egypt’s retail market in recent years, launching a number of major projects such as Cairo Festival City, which opened in 2013 under UAE-based Al Futtaim Group, and offers over 168,000 sq metres of GLA. JLL reports that Cairo Festival City added an additional 8000 sq metres of GLA in Q3 2015, while the Mirage Mall opened in New Cairo during the same quarter. An influx of new retail space is expected over the medium-term, including 444,000 sq metre of gross leasable area (GLA) in 2016, and 104,000 GLA in 2017.

The largest of these is the Mall of Egypt, which will offer over 160,000 sq metre of GLA, including an indoor ski resort known as Ski Egypt, in line with the Gulf trend of offering mixed-use recreational facilities within retail developments to increase footfall. Under development by the Al Futtaim Group, the mall will also offer a 17-screen cinema, family entertainment centre, and over 50 food and beverage outlets. It is scheduled to open in 2016.

Another major development is the Cleopatra Mall, located on 280,000 sq metre of built-up area, and slated to offer 115,000 sq metre of GLA when construction finishes in 2017. The mall will feature over 300 shops, an outdoor musical fountain, gourmet food markets, and a separate luxury shopping area for high-end retailers. Rising foreign investment has also recently extended into the supermarket and hypermarket segments.

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The Report: Egypt 2016

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