According to a report by JLL, the average rental rates for Cairo’s retail sector, particularly shopping malls, have risen by at least 9% in 2023 compared to 2022.
The global real estate consultancy stated that rental rates for primary and secondary malls have increased by 11% and 9% respectively in Q4-2023, on an annual basis.
JLL’s report also highlighted that the retail sector in Cairo witnessed limited project launches and completions in 2023, with only around 83,000 sq.m. of gross leasable areas being added to the city’s retail market.
“In 2024, over 447,000 sq. m. of retail space is scheduled for completion. However, given the sector’s current market conditions, we expect further delays in project completions,” the report said.
Egypt is currently facing a serious economic crisis characterised by a severe shortage of foreign currency and rapidly increasing inflation rates. These issues are expected to keep affecting consumer purchasing power and, as a result, retail spending in 2024.
As a recent example, the retail franchise company Alshaya Group, based in Kuwait, announced recently that it would be reducing its operations in Egypt due to the challenges foreign businesses face in the country.
The company will be closing physical stores and online operations of five brands, including Debenhams, Body Shop, Mothercare, Pinkberry, and Claire’s, and also reducing the number of stores for another four brands.
According to JLL, many Egyptian brands have shifted from e-commerce to physical stores in malls due to increasing demand for affordable local products.
“It is expected that their positive performance will continue throughout 2024 and beyond,” the report stated.