CAIRO, September 24, 2026 – Cairo’s real estate market demonstrated sustained resilience across its commercial, retail and hospitality sectors in the first half of 2026, while construction cost inflation and mounting affordability constraints led to short-term challenges in the residential sector, according to experts at JLL’s annual real estate industry event hosted in the Egyptian capital.
Discussions at the industry-led event focused on key developments across asset classes, construction sector updates and broader macroeconomic insights shaping the industry, as JLL emphasised continued long-term investor confidence in Egypt’s real estate market. Experts also proposed a strategic transition toward Build-to-Rent (BTR) models to navigate market affordability and cash flow constraints in the living sector.
Ayman Sami, Country Head Egypt at JLL, said: “Strong long-term fundamentals are driving optimism and investor confidence in Cairo's real estate market as it balances short-term residential headwinds. Our outlook for the Egyptian capital remains positive as we see a distinct shift in capital allocation. Developers are pivoting toward hospitality to balance their portfolios, while retail landlords are embracing collaborative partnership models to secure tenant interest and drive consumer footfall. As the resilient commercial sector evolves into wider, mixed-use ecosystems, it is creating new opportunities to optimise office space quality.”
With a 4% year-on-year increase in tourist arrivals and supported by proactive government measures, Egypt’s hospitality sector emerged as a premier growth segment in H1 2026, with resilient average daily rates and a robust development pipeline demonstrating its growth potential.
New supply is coming online in H2 in the office sector in New Cairo, the city’s primary business hub. With more tenants seeking holistic workplace experiences, competition is expected to heighten within the Grade A and prime segments. The retail sector showed stronger performance in H1 2026 compared to the same period last year, while a subdued residential sector saw developers introduce extended payment plans to mitigate affordability constraints.
To sustain cash flows, Ayah Ghanem, Head of Strategic Consulting - Africa at JLL, urged developers to pivot from traditional Build-to-Sell models to more resilient residential investment strategies like Build-to-Rent (BTR).
“As income has not kept pace with inflation, and amidst rising living expenses and residential ticket prices, residential freehold affordability is being severely compromised, leading to a notable impact on cashflow functions,” she explained. "Selling off-plan and moving on does not contribute to building the strongest brand equity for communities.”
To give developers greater control over operations and benefit from future capital appreciation and long-term brand equity, Ghanem emphasised the shift towards buildings a BTR portfolio. “By starting with small, strategic BTR pilots in mature, amenity-rich neighbourhoods, Cairo developers can command premium rental yields and tap into a global trend where investor-owned rentals now represent significant portions of the housing stock in mature markets,” she said.
Ahmed Hemmat, Head of Projects and Development Services – Egypt at JLL, highlighted the surge in construction costs and its impact on the sector’s performance. Construction costs across major Cairo asset classes rose by an average of 19% from 2025 to September 2026, with infrastructure and fitout projects recording the sharpest increases at approximately 23%.
“To mitigate these inflationary pressures, developers are adapting their business models to de-risk their pipelines," he explained. ‘Many are now finalising designs and locking in fixed prices with contractors before launching sales. Many have adopted different procurement strategies to ensure they get the maximum benefit of current prices. Unit sizes are also shrinking to maintain affordability in addition to extended payment plans payment.”
FAQs
1.) Question: Which sectors of the Cairo real estate market are currently showing the strongest growth?
Answer: Driven by a 4% year-on-year increase in international visitors and robust development pipelines aligned with Egypt’s Vision 2030 tourism goals to reach 30 million annual visitors, Cairo’s hospitality sector is showing consistent and steady growth.
With significant new Grade A office supply coming online in prime business hubs like New Cairo, capital is shifting toward holistic, mixed-use commercial ecosystems, while retail landlords are increasingly adopting collaborative revenue-share models to secure tenant interest.
Question: What key benefits does the Build-to-Rent (BTR) model have over the traditional Build-to-Sell concept?
Answer: The BTR model transforms real estate from a one-time transaction into a resilient, recurring revenue stream. In the traditional Build-to-Sell model, the future upside passes to the buyer and developer control ends at handover. Under BTR, developers can retain the asset on their books, enabling them to capture long-term asset appreciation, exercise greater control over community operations, and build lasting brand equity.
Question: How are real estate developers in Egypt changing their business models to adapt to surging construction costs?
Answer: Previously, developers would launch, sell, and then tender and build, leaving them highly exposed to sudden inflation. By fixing prices with contractors and finalising designs before launching and selling, they have greater control in locking in their costs.
To keep ticket prices affordable, developers are reducing unit sizes. Townhouses and villas that historically started at 250+ sqm, introduced versions that are less than 200 sqm. To ensure a broader reach, extended payment plans now stretch up to 15 years. Developers can also reduce the effect by speeding up the construction timelines if they adopt technology solutions from the design stage, creating robust cost plans, and managing the procurement process with balanced risk distribution.
JLL (NYSE:JLL) is a leading global commercial real estate services and investment management company with annual revenue of $26.1 billion, operations in over 80 countries and a global workforce of more than 112,000 as of June 30, 2026. For over 200 years, clients have trusted JLL, a Fortune 500® company, to help them confidently buy, build, occupy, manage and invest across a variety of industries and property types, including office, industrial, hotel, multi-family, retail and data center properties. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAY. Powered by rich global datasets and leading technology capabilities, we provide coordinated, end-to-end delivery of real estate services for a broad range of global clients who represent a wide variety of industries. Through LaSalle Investment Management, we invest for clients on a global basis in both private assets and publicly traded real estate securities. For further information, visit jll.com.
Across the Middle East and Africa (MEA) JLL is a leading player in the real estate and hospitality services markets. The firm has worked in 35 countries across the region and employs over 1800 internationally qualified professionals across its offices in Dubai, Abu Dhabi, Riyadh, Jeddah, Al Khobar, Cairo, Casablanca, Cape Town, Johannesburg and Nairobi. For further information, visit jll.com