Market Trends of Egypt Facility Management Industry
This section covers the major market trends shaping the Egypt Facility Management Market according to our research experts:
Growing Construction Sector in Egypt Driving the Market Growth
- The support provided by the Egyptian government has fueled the country's construction industry growth over the last four to six quarters. In the short to medium term, the industry is expected to experience strong growth due to the government's ongoing rollout of new infrastructure projects. Additionally, from a short- to medium-term perspective, the growing need for infrastructure from the expanding economy and population, particularly in terms of transportation and energy, would drive momentum in the Egyptian construction sector. Implementing public-private partnership financing frameworks would continue to fuel the momentum in the Egyptian construction sector.
- The Egyptian government has made significant investments in the construction industry. A prominent instance is the construction by the Egyptian government of a sizable "New Administrative Capital" 30 miles east of Cairo. All government cabinet departments and authorities are included in the project's first phase, which is nearly finished. By the end of 2022, the government is anticipated to move. Additionally, the government is modernizing transportation systems, ports, and airports. The Ministry of Transportation is currently working on about 25 projects related to the railroad industry. The government's major objective is to build ports and highways for industrial development and to connect the cities with reliable transportation systems.
- The French government's development agency, Agence Francaise de Developpement (AFD), is investing USD 2 billion in Egypt's infrastructure, including significant improvements to the Cairo Metro. Additionally, during the following four years, the Egyptian government intends to invest USD 32 billion in the Cairo Metro expansion project. In addition to the Cairo Metro project, funding from France's development agency will help Egypt expand its energy and water infrastructure. This creates significant demand for FM services in maintaining clean premises.
- Further, Egypt intends to develop up to 14 additional smart cities around the nation. According to the Minister of Housing, Egypt completed infrastructure projects worth approximately USD 106.25 billion in less than two years. The New Urban Communities Authority (NUCA) intends to construct new communities with integrated educational, medical, retail, and recreational services. This organization oversees creating connections between these new cities and the existing infrastructure. By providing the fundamental infrastructure needed to make these new cities appealing to investors, NUCA is encouraging private investors to take part in their development. Smart buildings can offer a variety of benefits and opportunities for facility management. It is even asserted that the smart building will completely transform facilities management.
- Therefore, the growing construction sector in the country and the growing adoption of smart technologies in Egypt, owing to the advantages and efficiency, are analyzed to contribute to the market's growth during the forecast period.
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Commercial Segment to Hold Significant Share in the Market
- The commercial sector includes buildings used for convenience stores, multichannel retailers, IT and telecommunication offices, corporate offices of manufacturers, and finance and insurance. Egypt's demand for facilities management services is rising due to the country's developing economy, which calls for significant infrastructure development.
- The demand for offices in local and foreign businesses in Cairo increased in the first quarter, according to the JLL market overview study published in April 2022. JLL added that the completion of over 260,000 square meters of office space had been anticipated by the end of 2022. Additionally, the performance of the Egyptian economy was reassuring in 2022. In November 2022, the finance minister of Egypt stated that the country plans to attract USD10 billion in FDI yearly, including the green economy.
- Commercial entities are commercial office spaces, including manufacturing plants and corporate headquarters for IT and communication companies. The availability of appropriate furnishings, interior spaces, and commercial structures drives the growth of the facility management market in the region. For instance, according to the Ministry of Communications and Information Technology, among the several state sectors, the local ICT sector experienced a growth rate of 16.3% during FY2021/22.
- Commercial buildings, including offices and shopping centers, are undergoing many transitions, including planned management of the energy, safety, and environmental systems, creating a demand growth for FM services in the country. For instance, in January 2022, GMG, a UAE-based retail distribution company, announced its plans to open more than 100 sports retail locations in Egypt within the next five years. As part of its broader worldwide expansion, the company would launch its portfolio of brands that are centered on personal wellness.
- According to the Ministry of Finance of Egypt, as of the fiscal year 2021-2022, the government investment in Egypt was close to EGP 358 billion (USD 22.8 billion). Investment in construction and real estate was approximately EGP 255 billion (USD 16.24 billion), with infrastructure receiving the majority of the investment in this category.
- The retail industry in Egypt is formalized due to the rise of mall culture. Sales at shopping centers, convenience stores, supermarket chains, and online retail platforms are being fueled by an emerging middle class, an expanding population, and growing secondary cities. For instance, in March 2022, MARAKEZ and SEOUDI Supermarkets collaborated to open two new stores at the Mall of Arabia and D5M in East Cairo.
