Egypt’s Retirees Create a Potential Housing Market

Egypt’s Retirees Create a Potential Housing Market

Khadiga Hafez, vice principal at a Cairo grade school, plans to retire in the next few years. A resident of Garden City, she hopes to move outside of central Cairo, where the traffic and lack of parking is a constant drain. She has her sights set on Sheik Zayed or 6th of October, where her son lives.

 Hafez is part of a growing retiree demographic in Egypt looking to move out of Cairo, the second loudest city in the world, according to a 2018 World Hearing Index report and the fourth most traffic-congested city, as reported by CAPMAS. Developers could capitalize on this outward migration by creating communities to cater to retirees or adding healthcare facilities to existing second-home developments.

PricewaterhouseCoopers’ (PwC) recent publication titled “Real Estate 2020: Building the Future” notes the rapid aging pace of the global population. The number of people aged 60 or older is projected to increase by 2.8 percent per year from 2025 to 2030, the report states adding that in 2010, old age dependency – the number of those 65 or older as a share of those aged 15-64 – was 22.7 percent and is now forecast to be 25.4 percent by 2050. Referring to countries with the youngest populations, such as Egypt, the report predicts they will have the fastest pace of ageing and the least time to adapt after 2020.

According to a 2017 Colliers report on Egyptian healthcare, “with approximately 10 percent of Egypt’s population above the age of 65 […] the need for retirement homes has been on the rise.” In Egypt, there is pressure to begin these projects now because the retiree community is expected to increase drastically during the next two decades, as 18 percent of the current population between 40 and 59 reaches retirement age, according to statistics website Population Pyramid.

The first potential market for this demographic is retirement communities. China and other countries are already experiencing the benefit of investing in these developments. China’s largest city, Shanghai, has about 5 million more residents than Cairo’s 20 million and is seeing wealthy retirees relocating to “purpose-built retirement villages,” reports PwC. The Chinese publication Sixth Tone reports these high-end apartment complexes “provide daily care, entertainment, exercise, trips, and classes, such as English, calligraphy, and knitting – all tailored to the elderly.”

Mansoor Ahmed, director of development solutions and healthcare at Colliers International MENA, says the idea of building retirement communities in Egypt is not new. “Five years back, developers were looking to do projects on the North Coast and in Sharm El Sheikh,” he explains, though instability dampened their enthusiasm. Now, however, interest is resurgent. Ahmed says the combination of Colliers’ report highlighting the potential in the retirement market as well as the increased political and economic stability have lead several developers to discuss retirement communities in Ain Sokhna and on the North Coast.

He believes that, similar to China, these communities will be for wealthy retired Egyptians who demand high-end properties in a private community. Amenities might include rehabilitation facilities and physiotherapy. He emphasizes that these communities would be for retirees who are still active, but who may occasionally need specialized care.

Magued Sherif, CEO of SODIC, looks towards the value of the projects rather than the added amenities. He wrote via email, “I would not say that certain developments attract retired people in specific. I would however say that the more upmarket projects – the ones with the larger homes and bigger gardens - which tend to be more expensive, attract clients that have worked hard, with the better part of their career behind them and can now afford a luxurious summer home and have more time to enjoy it.”

A second market for retirees is to integrate retirement amenities into booming second-home developments in coastal destinations such as Ain Sokhna, the North Coast, Hurghada, and Sharm El Sheikh. “There is a growing trend across international markets to develop retirement communities with the look and feel of vacation homes,” Ahmed told Invest-Gate, a real estate magazine, in February. “There is potential for Egyptian developers to look at capitalizing on such concepts within their developments.”

Including retirees in the vacation home market comes with added benefits for developers. A 2017 Colliers’ report titled “Egyptian Second Home Market” addresses the problem of fluctuating year-round occupancy in second home developments. Along the North Coast, in particular, weather can be chilly four months a year. Colliers “has seen these challenges addressed by developing diversified support facilities such as healthcare driven wellness resorts, and long-term care and rehabilitation facilities,” according to the report. These additions help keep properties occupied by attracting retirees to purchase permanent homes within the communities.

Ahmed sees Ain Sokhna as the most promising location for catering to retired Egyptians. “It’s a one-hour drive from Cairo,” he says. “If my parents are there, then I can go on the weekend.” In addition, these retirement communities do not need to have comprehensive medical facilities because of their proximity to resources in Cairo.

However, the North Coast is expected to acquire more medical resources that could appeal to retirees. In March, Mohammed Hablas, executive director of German-Saudi Hospitals in the Middle East, said its new $500 million medical city outside Alexandria is scheduled to open next year. Once such facilities are up and running, nearby developments can look at ways to partner with them to address the needs of ageing residents.

Targeting the retired community could be an opportunity for developers. However, before their marketing teams work to capture the attention of that demographic, developers first need to consider high-end housing and additional facilities that cater to retiree’s quality of life.