Cairo 175 m² serviced apartment at EGP 54.24m — how should I adjust the comparables?

FirstCreek

Property investor
I would like the light and location to justify pursuing this apartment, but the dated finishes and uncertain ongoing costs may make the asking price difficult to support. It is a 4-bed serviced apartment in Cairo, about 175 m² and in average condition, offered at EGP 54,240,000.

My evidence consists of three current listings and one recorded sale. Rather than choosing an arbitrary discount, how would you grade the condition and account for the larger floor area? I also need to establish whether the stated size is net or gross and whether any balcony, terrace or other outdoor area is included.

This would be our first rental property, so the annual service charge, operator-related costs and the meaning of the quoted lease length could materially alter the numbers. Which of those would you verify first? I will have an independent local valuation completed before making a final decision.
 
The ask works out at roughly EGP 310,000 per m², which is a useful starting point but not a valuation by itself. I would run 5%, 10% and 15% condition-discount scenarios rather than select one percentage before pricing the refurbishment. For floor area, use the completed comparable’s price per m² cautiously; larger apartments do not always retain the same rate. Exact micro-location is probably the biggest missing fact.
 
Before adjusting anything, is the 175 m² net usable area or a gross figure that includes common areas? The comparable needs to use the same measurement basis.

Also, what does “lease length” refer to here: the ownership interest, an operator agreement, or an existing tenancy? I would want the annual service charge, what it covers, and whether parking or outdoor space is included.
 
I would be reluctant to let one completed sale anchor the whole exercise, especially if it differs in building, floor, outlook or condition. The asking comparables still show the seller competition, even though they do not prove achieved value.

Because this is intended as a rental, the missing number for me is realistic net rent. Service charges, furnishing replacement, management or operator fees, maintenance and vacancy can turn an attractive headline rent into a weak return.
 
“Cairo” is much too broad for the light and location premium to carry much weight. You need comparables from the same building or genuinely similar nearby buildings, not merely apartments with the same bedroom count. Floor, outlook, traffic exposure and whether the light can later be obstructed may matter more than a modest difference in area. Clarifying the legal and contractual meaning of the remaining lease term should come before fine-tuning the price.
 
Maria’s area question is crucial. I would keep the adjustments separate: first normalize every comparable to the same area definition, then account for condition, parking and outdoor space. Do not simply add all the percentages together.

At the asking price, the 5%, 10% and 15% condition scenarios equal EGP 2.712m, EGP 5.424m and EGP 8.136m. Compare those amounts with a realistic refurbishment budget. For floor area, I would avoid an arbitrary percentage unless the comparables show how the local market prices the size difference.
 
Cost to refurbish is useful, but I disagree that it should be the sole condition adjustment. Buyers can discount dated space by more than the works cost because of disruption, uncertainty and personal taste. I would compare the cost-based figure with the discount visible between renovated and dated listings, then treat any overlap as more credible. Parking and outdoor space should be valued only from comparable evidence, not assumed premiums.
 
I would make a single comparison table showing asking versus completed, transaction or listing date, building and micro-location, floor, area basis, condition, parking, outdoor space, service charge and relevant lease term. That will expose where the one completed sale is genuinely comparable.

Before making an offer, request the current fee schedule, the relevant lease or service agreement, parking rights and evidence supporting the stated area. For the rental calculation, allow separately for service charges, furnishing and replacement, management or operator costs, maintenance, vacancy, insurance and any Egypt-specific tax treatment that applies.
 
One addition to Omar’s list: establish who pays each recurring charge when the apartment is occupied and when it is empty. A serviced arrangement can otherwise lead to the same expense being missed or counted twice.

I would not settle on a valuation range until you have four items: exact micro-location, full details of the completed sale, the area measurement basis, and the lease/service-charge position. Those could move the answer more than a finely tuned floor-area adjustment.
 
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