Commercial, Administrative Property Prices Surge 200% Compared To 2022: Redcon's Abdallah

(MENAFN- Daily News Egypt) Ahmed Abdallah, Deputy Chairperson of Redcon Properties, highlights the growing appeal of investing in commercial and administrative real estate. These property types offer higher returns on investment compared to other Real estate categories.

The value of commercial and administrative assets tends to appreciate more rapidly over time than residential properties. Notably, prices for these properties have surged by 200% since the first quarter of 2022, according to Abdallah.

Several factors contribute to this price increase:

Economic Changes: Economic shifts that began in the second half of 2022 and continued throughout 2023 impacted the market. These changes included exchange rate fluctuations, a sharp devaluation of the Egyptian pound, and a shortage of foreign currencies. The resulting halt in construction material imports led to increased costs.

Inflation: General inflation in Egypt reached over 40% in 2023. Investors sought property as a hedge against inflation, further driving demand for commercial and administrative real estate.

Construction Costs: Rising labor and contractor wages, coupled with material shortages, contributed to higher construction costs.

Abdallah said:“There are several reasons for the recent surge in prices for commercial and administrative properties in the area. Key factors include economic changes that began affecting the market in the second half of 2022 and continued throughout 2023. These changes involved fluctuations in the exchange rate, a sharp decline in the value of the Egyptian pound, and a significant shortage of foreign currencies during that period, which led to a halt in the import of construction materials. Consequently, there was a severe increase in the cost of construction materials, coupled with a shortage of imported materials and rising wages for labor and contractors. Additionally, general inflation in the country peaked at over 40% in 2023. As a result, investors and capital owners expanded their property purchases as a hedge against inflation. These factors, including increased construction costs and high demand for commercial and administrative properties, have led to an unprecedented rise in the prices of these types of real estate.”

Abdallah also highlighted the unique features of the“Golden Gate” project in the Fifth Settlement. This mixed-use development spans administrative, commercial, and entertainment spaces across a 38-feddan plot with over 200,000 sqm of built-up area. Notably, its strategic location on South Teseen Street in New Cairo, facing the American University in Cairo, adds to its appeal.

Moreover, the project has achieved the highest green building certifications. Designed with energy and water conservation principles, it reduces energy consumption by 53% and water usage by 44% compared to traditional buildings.

Given the importance of parking facilities for such types of projects, Abdallah said the company implemented the largest and most efficient parking area, covering 250,000 sqm, with two underground basements in the project. This facility has a maximum capacity of eight thousand vehicles and is equipped with electric vehicle charging stations to support environmentally friendly transportation.

One of the key features of the project, which is rarely found in similar projects, is the high floor-to-ceiling height. For commercial spaces, the net internal height is six meters, while for administrative offices, it reaches four meters, providing an exceptional interior space.

Golden Gate offers a unique blend of commercial and recreational spaces that cater to diverse lifestyles. It includes vibrant commercial areas totaling up to 70,000 sqm, featuring luxury global stores, various local and international restaurants, and renowned specialty cafes. Additionally, the project includes entertainment centers, such as a well-known gym in Cairo and recreational facilities suitable for different age groups, catering to the whole family. It also boasts a large hypermarket from one of the most famous brands in the sector.

“At Golden Gate, we not only commit to sustainability but also go beyond it by providing a healthy environment that is more energy-efficient and has lower operational costs, delivering exceptional economic benefits to our project's successful partners,” Abdallah concluded.

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