From a retail perspective, it is a difficult time for landlords and occupiers/operators. The economic instability and recent further devaluation of the Egyptian pound have brought challenges and a need for the sector to adapt to remain competitive. The past two weeks we have seen many negotiations fall through or been put on hold until the market settles. Negotiations are also taking longer as retailers are cautious with the raise of investment costs for new stores as well as import difficulties. Operators asking for white-box capex contribution from landlords is becoming a standard requirement to help alleviate some of the burden retailers are facing.

It is also worth mentioning that developers have become more creative and flexible with regard to the commercial terms in an attempt to finalize deals. Given the current market volatility, as well as the increase in new and upcoming commercial developments, the market is inevitably empowering the tenants/retailers as the number of good operators in the market is significantly less than the upcoming supply of retail space.

Despite all the contractions in the retail world, there are still new international brands which are interested to explore the Egyptian market, we have seen this from strong F&B brands from UK & Europe who have been actively looking in the market for expansion and entry. There has also been a boom of local F&B concepts from Egyptian entrepreneurs aspiring to create and operate their own F&B concepts with many showing ambitions to expand both locally and regionally.

The Egyptian retail market is still very much in its development stage and the young and educated population is hungry to experience all the varied retail experience found in more developed markets. With the significant of ongoing development in East Cairo, particularly in New Cairo and the New Administrative Capital, there will be an influx of available retail and admin space which will give retailers more choice and potentially more room for negotiations as projects fight for the best brands/operators.

Like the rest of the world, retail in Egypt is becoming more interactive and brands are aware they need to be connecting with their consumers not only through their physical stores but also through their e-commerce portals and social media. The Egyptian consumers are growing more educated and demanding and expect a high level of service and offering from the brands they connect with.

Despite all the challenges we have seen in the retail market over the past year, economic downturn, currency devaluation and import restrictions, recent surveys have still shown that local/international retailers and operators have a positive outlook to the market. Large regional operators such as GMG who still have plans to open 100 stores in Egypt by 2026 and a growing middle-class, educated and tech-savvy population will continue to drive the retail market and the need for new and exciting retail experiences. Local sourcing will continue to be the protagonist, but we see this relaxing as back-log of products are being slowly released from the ports. As local/international brands and concepts fix their sourcing and operation issues, they shall be able to gradually exit the market drawbacks over time.