Why Unit-Level Yield Analysis Matters
Aggregate market yields hide the structure. A 6% average rental yield for Sheikh Zayed means nothing when studio apartments are clearing 7% and four-bedroom villas are sitting at 4.2%. Capital allocators need unit-level data: what you buy determines what you earn.
We pulled 420 lease transactions closed by RE/MAX Jareed and partner brokerages in Sheikh Zayed, 6th October, and New Zayed between January and December 2024. Every lease included: unit type, size, compound name, finish level, monthly rent, and estimated market value at lease signing. We excluded owner-occupied units, corporate bulk leases, and short-term furnished rentals under six months.
Gross rental yield = (annual rent ÷ market value) × 100. This is pre-expense, pre-tax, and assumes 100% occupancy. Subtract 1.5–2.5 percentage points for management, maintenance, and vacancy to estimate net yield.
Sheikh Zayed: Yield by Unit Type
Sheikh Zayed showed the tightest yield compression across unit types, reflecting mature demand and stable tenant pools.
Studios & One-Bedroom Units
Studios (40–60 m²): 6.2–7.1% gross yield. Sample: a 50 m² semi-finished studio in Beverly Hills rented for EGP 6,500/month against a market value of EGP 1,100,000. Annual rent EGP 78,000 ÷ EGP 1,100,000 = 7.09%.
One-bedroom apartments (60–90 m²): 5.8–6.4% gross yield. A 75 m² fully finished unit in Zed rented for EGP 9,000/month, market value EGP 1,750,000. Yield: 6.17%.
Smaller units attract single professionals and young couples with shorter search cycles. Vacancy periods averaged 18 days in 2024. Turnover is higher—median tenancy 14 months—but re-leasing is fast.
Two-Bedroom Apartments
Two-bedroom units (90–140 m²) delivered 5.3–6.0% gross yields. A 120 m² apartment in Sodic West (fully finished, first occupancy) rented for EGP 13,500/month against EGP 2,700,000 market value. Yield: 6.0%.
These units balance occupancy speed and tenant stability. Families with one child form the core demand segment. Median tenancy: 22 months. Vacancy averaged 24 days.
Three-Bedroom Units & Larger
Three-bedroom apartments (140–200 m²): 4.7–5.5% gross yield. A 165 m² unit in Allegria rented for EGP 18,000/month, market value EGP 3,850,000. Yield: 5.61%.
Four-bedroom units and standalone villas: 4.2–4.9%. A 280 m² villa in Palm Hills October rented for EGP 28,000/month, market value EGP 6,800,000. Yield: 4.94%.
Larger units face longer vacancy (35–50 days) and narrower tenant pools. Families willing to pay EGP 25,000+ monthly rent have more choices and negotiate harder. The yield compression reflects higher per-square-meter acquisition cost and slower liquidity.
6th October: Higher Absolute Yields, Different Risk Profile
6th October units posted higher nominal yields but faced longer vacancy and more tenant turnover.
Residential Units
Studios & one-bedroom: 6.8–8.1% gross yield. A 55 m² studio in Dreamland rented for EGP 5,000/month, market value EGP 750,000. Yield: 8.0%.
Two-bedroom apartments: 6.0–7.2%. A 110 m² unit in Hadayek October rented for EGP 9,500/month, market value EGP 1,600,000. Yield: 7.13%.
Three-bedroom & larger: 5.2–6.3%. Vacancy risk rises sharply above EGP 15,000/month rent. Median vacancy: 42 days.
6th October's higher yields compensate for tenant credit variability and infrastructure gaps. Neighborhoods south of the 26th of July Corridor showed weaker rent collection and higher early-termination rates.
Commercial Units in 6th October
Commercial real estate in 6th October—clinics, administrative offices, and retail storefronts—delivered the highest gross yields in our sample.
Medical clinics (50–80 m²): 8.9–10.4% gross yield. A 65 m² clinic in Mall of Arabia's medical tower rented for EGP 12,000/month, market value EGP 1,350,000. Yield: 10.67%.
Administrative offices (80–150 m²): 7.8–9.5%. A 100 m² office in October Plaza rented for EGP 10,000/month, value EGP 1,280,000. Yield: 9.38%.
Retail storefronts (30–60 m²): 9.2–11.3%, but lease structures often include revenue-share clauses that complicate yield calculation. Fixed-rent leases on standalone shops near Hyper One and Carrefour showed the cleanest data.
Commercial tenants sign longer leases (median 36 months) and accept higher upfront fit-out costs. Vacancy for prime commercial space averaged 28 days. Secondary locations saw 60+ days.
Source: RE/MAX Jareed lease database; cross-checked against Property Finder and Aqarmap commercial listings Q4 2024.
Finish Level: The 18–24% Rent Premium
Furnished apartments commanded significant rent premiums but introduced new variables.
Semi-finished: Baseline. All yields above reflect semi-finished or basic-finish units unless noted.
Fully finished (no furniture): +8–12% rent premium. A 100 m² two-bedroom in VYE: semi-finished rent EGP 10,000/month; fully finished (AC, kitchen, flooring) EGP 11,000/month.
Fully furnished: +18–24% rent premium. Same unit furnished: EGP 12,200/month. But: furnished units saw 35% higher turnover, 12-month median tenancy, and depreciation on furniture/appliances. Net yield advantage shrinks to 6–9% after amortizing fit-out over three tenancy cycles.
Furnished units work best for short-term corporate tenants or expats on fixed-duration contracts. Demand is thin outside Zed, Sodic West, and Allegria.
Compound Tier & Yield Inversion
You'd expect top-tier compounds to deliver lower yields (land value capitalized into price). The data confirmed this, but the gap was smaller than anticipated.
Tier 1 (Allegria, Sodic West, Zed, Palm Hills): Two-bedroom units averaged 5.4% gross yield.
Tier 2 (Cairo Gate, Beverly Hills, VYE, Karmell): Two-bedroom units averaged 5.9%.
Tier 3 (October Gardens, Belle Vie, older phases of Dreamland): Two-bedroom units averaged 6.7%.
The 130 basis-point gap between Tier 1 and Tier 3 reflects tenant willingness to pay for compound services (security, maintenance, clubhouse access). Tier 1 compounds saw 40% faster re-leasing and 22% lower tenant default rates. After adjusting for vacancy and bad debt, net yields converge within 60–80 basis points.
Capital appreciation tells the opposite story: Tier 1 compounds appreciated 11–14% in 2024 (per Aqarmap resale data); Tier 3 appreciated 6–8%. Total return favors Tier 1 despite lower cash yield.
New Zayed (زايد الجديدة / Zayed 2000): Insufficient Sample
New Zayed remains 70% owner-occupied or under construction. We recorded only 31 lease transactions in 2024—too small for reliable yield brackets. Observed rents: EGP 11,000–16,000/month for two-bedroom units (110–130 m²), market values EGP 2,200,000–2,800,000. Implied yields: 5.7–6.9%, but high variance.
As delivery accelerates in 2025–2026 (NUCA projects 4,200 units completed by end-2026), rental supply will deepen and yields will stabilize.
Green Belt: Wait for Lease Comps
The Green Belt (الحزام الأخضر) recorded zero residential leases in our 2024 dataset. Presidential Decree 189/2024 reserved 70% of units for owner-occupancy and barred speculative flipping for five years post-delivery. The first wave of residents moves in Q2 2025.
Rental yields won't be observable until Q4 2025 at earliest. Early off-plan buyers paid EGP 12,000–16,000/m². If those units rent for EGP 35–45/m²/month (comparable to mid-tier Sheikh Zayed), gross yields would land at 3.2–3.8%—below established neighborhoods. But capital appreciation could run 18–25% annually through 2027 as infrastructure completes.
Source: NUCA Green Belt occupancy tracker; decree text published October 2024.
Leverage & Cash-on-Cash Return
Gross yield measures property performance. Cash-on-cash return measures your equity performance after debt.
Example: You buy a EGP 2,000,000 apartment in Sheikh Zayed (two-bedroom, 6% gross yield = EGP 120,000 annual rent). You put down 30% (EGP 600,000) and finance EGP 1,400,000 at 19% annual interest (CBE policy rate December 2024: 27.25%; mortgage rates 19–22%).
Annual debt service: EGP 266,000 (interest-only, no principal paydown).
Net operating income: EGP 120,000 rent − EGP 30,000 expenses (property tax, maintenance, vacancy reserve) = EGP 90,000.
Cash flow after debt: EGP 90,000 − EGP 266,000 = −EGP 176,000.
Cash-on-cash return: −29.3%.
Leverage is punitive at current rates. Mortgage debt makes sense only if you project 20%+ annual price appreciation (capital gain offsets negative carry) or if you can negotiate seller financing at sub-15% rates.
All-cash buyers earn the gross yield minus operating expenses: roughly 4–5% net for residential, 7–9% net for commercial.
Tax & Holding Costs
Egypt's 2023 Unified Property Tax Law imposes 10% tax on annual rental income. Enforcement has been inconsistent—many landlords in West Cairo compounds report zero tax collection in 2024—but budget pressure may tighten compliance in 2025–2026.
Other costs: building maintenance fees (EGP 3–8/m²/month in managed compounds), property management (8–12% of rent if outsourced), and a 2.5% real estate tax on property value every five years (rarely enforced on residential units under EGP 2 million).
Budget 15–20% of gross rent for non-mortgage holding costs.
What the Yields Tell You
Smaller units win on cash yield. Studios and one-bedroom apartments in Sheikh Zayed and 6th October clear 6–7% gross, re-lease fast, and face minimal vacancy risk. Capital appreciation lags larger units, but cash flow is predictable.
Commercial beats residential for income-focused allocators. Medical and administrative spaces in 6th October deliver 9–11% gross yields with longer tenant hold and lower turnover. Acquisition cost per square meter is higher, but income stability justifies the premium.
Tier 1 compounds compress yield but reduce operational friction. Lower gross yield, faster re-leasing, better tenant credit, and stronger price appreciation. Total return (income + capital gain) favors Tier 1 for hold periods beyond 36 months.
Furnished units are a value trap unless you're targeting short-term corporate tenants. The rent premium doesn't cover furniture depreciation and higher turnover.
Leverage doesn't work at 19% interest. Cash buyers clear 4–5% net residential yield, 7–9% net commercial. Financed buyers run negative carry unless they're banking on double-digit annual appreciation.
How to Model Your Deal
Pull comparable lease data for your target unit type and compound. Aqarmap and Property Finder publish rent ranges; RE/MAX Jareed's market reports (available on request) include closed-deal data by compound.
Calculate gross yield: (monthly rent × 12) ÷ acquisition price.
Subtract operating expenses: 15% of gross rent for semi-finished units in managed compounds, 20% for furnished or standalone properties.
If financing, subtract annual debt service. If cash-on-cash return is negative, your bet is on price appreciation. Model three scenarios: 5%, 10%, and 15% annual gain. If 5% appreciation doesn't clear your hurdle rate, walk.
Track vacancy and re-leasing time. A 6% gross yield with 45 days vacancy per cycle is worse than a 5.5% yield with 20 days vacancy.
Commercial deals require sector-specific underwriting (tenant creditworthiness, fit-out responsibility, lease escalation clauses). Consult a property consultant with commercial transaction history before committing capital.
What We're Watching in 2025
New Zayed lease comps. As 4,000+ units deliver in 2025, rental data will clarify whether New Zayed yields match or exceed Sheikh Zayed. Early movers into resale inventory may capture a 12–18 month yield advantage before supply floods the market.
Green Belt rental activation. First leases should appear Q4 2025. If gross yields land below 4%, the investment case pivots entirely to capital appreciation—fine for patient capital, poor for income buyers.
CBE rate trajectory. If the Central Bank of Egypt cuts rates below 20% in H2 2025 (inflation permitting), mortgage economics improve and leveraged deals become viable again. Watch the quarterly Monetary Policy Committee announcements.
Commercial supply in 6th October. Three new mixed-use projects (totaling 180,000 m² of leasable space) are scheduled for 2025 delivery. If vacancy rises above 15%, medical and administrative yields will compress 100–150 basis points.
Source: CBE Monetary Policy Committee minutes December 2024; NUCA quarterly delivery tracker.
Data Hygiene Note
This analysis rests on closed lease transactions with verified rent and market value. We excluded: developer-advertised rents (often aspirational), sub-six-month furnished rentals (vacation market, different pricing), and corporate bulk leases (negotiated rates that don't reflect open-market demand).
Market value was estimated using: recent resale comps within the same compound and phase, Property Finder and Aqarmap listed prices adjusted downward 8–12% for negotiation, and developer price lists for new units when no resale data existed.
Yield calculations assume 100% annual occupancy. Real-world occupancy in Sheikh Zayed averaged 94% in 2024; in 6th October, 89%. Adjust yields downward accordingly: multiply gross yield by your expected occupancy rate to get occupancy-adjusted yield.