into africa insight
Cairo has the largest number of office development projects currently underway in North Africa, and its Festival City mixed- use development by Al Futtaim Group, due for completion in 2012, mirrors its successful development in Dubai
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Cushman & Wakefield’s report cites Cairo’s main office
markets as New Cairo and Downtown, but states that peripheral areas such as Smart Village and Pyramid Heights have become more attractive to occupiers. It comments: ‘Despite the office market beginning to ease as a result of the general economic slowdown, there remains strong demand for high quality space from international companies.’ Meanwhile, Colliers International’s MENA Real Estate Overview for Q1 2010 highlights that many residential units are being converted into offices due to the lack of quality office space in the capital. The report notes that this has led to a ‘fragmentation of the office market’ and adds: ‘The market is expected to fragment further as private sector developers rush to meet unsatisfied demand for office space. Given land availability constraints in central Cairo and the focus of development activity in the new communities, New Cairo and 6th
October will house the vast majority of forthcoming office space.’ It also states that rental values have bucked the regional
trend, and adds: ‘Whilst other office sectors in the Middle East have seen large decreases in average rental rates between 2008 and 2009, the Cairo office sector registered continuous increases over the same period. ‘Due to the insufficient supply and continuously increasing
demand, the gap between demand and supply is expected to widen. Colliers International therefore remains bullish on the
ALGERIA AND TUNISIA
Development in Algeria is hampered by high levels of cor- ruption and bureaucratic resistance. According to Cushman & Wakefield, there is ‘no defined office area within Algiers’ and the majority of international occupiers are located in the Hydra and Pins Maritime submarkets. The report observes that most occupiers are still using con- verted residential premises as office buildings, and states: ‘The large majority of space within Algiers is of poor quality with only a small number of higher quality premises. However, the Algeria Business Centre in Pins Maritime has seen increased interest from a number of international tenants.’ It says that security is an issue for residential properties
but adds that the Algiers residential market has ‘grown noticeably over the past year or so, although supply levels remain low’. The most sought-after locations within Algiers are Hydra and along the Airport Road. There is also little international development and investment activity in Algeria’s western neighbour, Tunisia, but Cushman & Wakefield expects the number to increase over the next few years. The office market is located pri- marily within the capital city of Tunis, with four principal sub- markets: Centre Urbain Nord, Avenue Mohamed, Belvedere and Berges du Lac – the preferred location for international corporates as well as a number of embassies. Cushman & Wakefield’s report states that there is cur-
rently a ‘low supply of Grade A and B office space in Tunis’. However, demand for good quality space is high within Tunis and it is anticipated that rental values will continue to increase over the next 12 months due to the demand/supply imbalance. It adds: ‘The new financial centre development in Raoed Nord will significantly increase the amount of office space, although completion remains over a year away.’
The report confirms that the main resi-
dential areas are Carthage, Sidi Bou Said and La Marsa, and Berges du Lac, while two proposed projects – Sports City and Century City – will provide approximately 10,000 and 100,000 residential units respectively. Meanwhile, Sama Dubai’s Mediterranean Gate – a new town currently under con- struction just south of Tunis – will provide housing for 350,000 people.
EGYPT
Egypt is a country, like Morocco, with a favourable political and business environment for international companies. Cushman & Wakefield’s Van den Bergh says: “Egypt benefits from a relatively stable government and a more sophisticated business envi- ronment than many in the region. Its strong links with Europe, the Middle East and the GCC region in particular allows it to be a bridge for international companies to expand into North Africa. Domestic GDP growth in recent years has led to good opportunities for real estate development across the residential, leisure and retail sectors.” When it comes to key projects, van den Bergh lists Cairo’s Festival City and Madinaty
as the ones to watch. He adds: “Cairo has the largest number of office development projects currently underway in North Africa, and its Festival City mixed-use development by Al Futtaim Group, due for completion in 2012, mirrors its successful development in Dubai. Perhaps the most ambitious mixed-use development incorporating residential, leisure and retail elements is the new ‘city’ of Madinaty currently being developed by TMG Holding, projected to house 600,000 inhabitants.” Emaar has identified Egypt as a key market for growth, and its wholly-owned subsidiary Emaar Misr is embarking on a number of large projects including Marassi – a US$1.8 billion tourist and residential destination – as well as the US$1.1 billion Mivida residential community located at the fifth district, and the US$2.1 billion master-planned golf community, Uptown Cairo. Hazem Ashry, general manager, Emaar Misr, says that these three projects are pro-
5 Tunis Sport City, Tunisia 6 Marassi, Egypt
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/jun-sep 2010
gressing as per schedule with the first residences in the launch phase of Uptown Cairo and Marassi to be handed over by the end of this year. “The excitement is building up as we move closer to the handover date of the first residential units,” he adds.
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