by Vivian Salama
UAE retailers are looking to expand operations beyond home shores and for some, Cairo is the next big investment opportunity.
“This is a place that changes on a monthly basis – it’s absolutely booming,” John Davis, the chief executive officer of Colliers International, said yesterday.
Cairo has generally been ignored in the rush to satisfy surging consumer demand in the Middle East. However, with the recent relaxation of trade duties, which have dropped from nearly 150 per cent to 20 per cent, a pent-up demand for international consumer brands has been unleashed.
“Before, the barrier to entry for retail merchandise, textiles in particular, made it impossible to enter the market,” Mr Davis said.
As a result, a number of developers based in the UAE have moved into the greater Cairo area. Al Futtaim Group has begun work on Cairo Festival City, a 154,000 square metre indoor-outdoor shopping and entertainment centre, similar to its namesake in Dubai. The mall will feature 250 shops and services, as well as 85 restaurants and cafes.
“What’s happening in Cairo is that there’s a lot of international investment coming in,” said Peter Young, the director of retail development for Al Futtaim Group Real Estate.
Emaar has invested Dh20.33 billion (US$5.54bn) in Egypt, including a Dh7.7bn development in Uptown Cairo and the Dh2.57bn Cairo Gate, a commercial and residential development.
Majid Al Futtaim Shopping Malls has purchased 400,000 square metres in central Cairo for five new malls. The group also plans to expand existing centres in Maadi and Alexandria.
And last year, Damac Properties announced a number of ambitious projects in Egypt, including Park Avenue, a four million square metre mixed-use centre. It plans to build the New Cairo project, which will house residential and commercial properties over a 6.3 million square metre area.
The Egyptian retail sector will not be as dependent on tourism as it is in the UAE. Instead, it will focus on the domestic market.
Egypt’s gross domestic product is forecast to grow by eight per cent by 2012, with total retail and leisure expenditure in the primary and secondary trade areas projected to reach 28.5 billion Egyptian pounds (Dh19.25bn) in 2009, rising to 79 billion Egyptian pounds by 2016. The population is 78 million, the highest in the region, and is expected to rise to 90 million by 2020.
“The population is absolutely massive in Egypt,” said Mr Davis. “So it’s a very attractive market for retailers to get into.”
