TGM Consulting will manage the marketing of 135,000 sqm for Cleopatra Real Estate Development, distributed accross a space of 115,000 sqm in Cleopatra Mall, in addition to 20,000 sqm in the Cleopatra Plaza project in Alexandria.
In an interview with Daily News Egypt, solidarity partner in TGM, Philip Evans said he expects unprecedented growth in the Egyptian retail sector in the upcoming years, with the presence of many brands and trademarks that will be launched in the local market for the first time.
What are the areas of the commercial buildings that TGM plans to lease or market in Egypt?
Cleopatra group has hired TGM Consulting as an exclusive agent for the leasing of retail shops and Cleopatra Mall. The company is responsible for leasing Cleopatra Mall units. The mall is considered an upmarket mall with an area for leasing of 115,000 sqm on three storeys.
The area includes a number of shops specialised in fashion, food and entertainment. Moreover, TGM is working in the Cleopatra Plaza project, which is a shopping mall in downtown Alexandria on the area of 20,000 sqm.
Are there any negotiations with other Egyptian real estate companies to obtain leasing rights and manage administrative and commercial projects?
We are currently focusing on leasing and marketing the units of Cleopatra Mall, which is set to be inaugurated in 2017.
How do you view the growth opportunities of the Egyptian retail sector, and how do you see the company’s expansions during the upcoming period?
The youth segment in Egypt has been growing rapidly, until it became the vast majority of the population. It is expected that the Egyptian retail market will witness an unprecedented growth over the upcoming years.
Developers and workers in the retail sector are convinced that the market has a lot of potential that can aid the growth of the local retail sector, whereby the upcoming period will witness the launching of a number of brands and trademarks in the local market for the first time.
What are the most prominent difficulties that face the marketing and leasing of shopping malls in Egypt?
The retail sector achieved exceptional growth during the past five years, and we expect that growth rates will continue to rise.
The most prominent problem facing the sector is the lack of international brands, whereby the sector still lacks the most important ingredient, which is the presence of international brands that attract shoppers.
Does the currency in which rent is paid, whether dollars or Egyptian pounds, affect the units’ attractiveness to tenants?
The used currency in rents is the US dollar. We are currently negotiating with a number of tenants in the fields of educational entertainment, as well as family entertainment centres and cinemas. Moreover, there are ongoing negotiations with brand shops, which we will reveal at the right time.
What your vision for commercial property prices in the current period? And how relevant is it to market conditions?
The lack of distinctive places for the establishment of real estate retail units and shopping centres has allowed real estate developers in Cairo to achieve high returns on their investments. In some places in Cairo, rents rates are almost similar to the levels of the city of Dubai and some Gulf countries, which are places controlled by giant malls culture.
What are the most important observations taken into account in pricing for the rental or ownership of commercial units?
Like any industry or field, the retail sector basically depends on supply and demand, and as I mentioned before, the supply is limited in Egypt, thus real estate developers have the ability to impose high rents.
Due to this factor, several other factors should be taken into account, such as location and accessibility of the place, quality, and the company responsible for management and operation of the mall.
How much space was rented in Cleopatra Mall, in addition to the area rented by Lulu Hypermarket?
We recently signed an agreement with Lulu Hypermarket to rent a large area for the establishment of a hypermarket in Cleopatra Mall. We are also holding multiple negotiations with another group of entertainment and food companies to manage a number of entertainment venues in the second floor of the mall. We aim to bring in a number of luxury department stores and several world-famous brands from Paris and Milan.
Have the real estate marketers’ fees and commissions changed during the recent period, and by how much?
The fees differ from one project to another, and from one company to another.
How many projects you target to rent in the medium term of three to five years?
As we are the exclusive agent for renting Cleopatra Mall’s units, considering the projects under construction, the TGM is looking forward to renting five shopping centres in the next three to five years with a total available area amounting to 250,000 sqm.
To what extent you view the impact of economic conditions on the retail sector, and mall activity, rentals and cash flows?
I think the Egyptian economy is moving in the right direction now, and the retail sector is one of the sectors that are strongly recovering, as the venues allocated for the retail sector are currently enjoying an excellent position due to the increase of visitors to the malls. It also entails the increase of sales rates for various department stores in malls.