Profitability and Leverage of Egyptian Listed Real Estate Companies in Response to Interest Rates | ||
| مجلة البحوث الإدارية | ||
| Volume 43, Issue 4, October 2025 PDF (855.66 K) | ||
| Document Type: المقالة الأصلية | ||
| DOI: 10.21608/jso.2025.414132.1440 | ||
| Author | ||
| Baraa Hemida* | ||
| Postgraduate Studies, Faculty of Management Sciences, Sadat Academy for Management Sciences, Maadi, Cairo, Egypt. (Msc student) - Business Administration Department, Faculty of Business Administration, Canadian International College | ||
| Abstract | ||
| This study examines Egypt’s real estate sector and uncovers a marked asymmetry in how interest rate fluctuations transmit to firms’ financial outcomes. Profitability responds appreciably: developers and property firms adjust pricing strategies, renegotiate input costs, or streamline processes to offset the rise in borrowing expenses. In contrast, leverage appears largely unresponsive in the short run, consistent with the sector’s dependence on long‑maturity, fixed‑terms debt contracts that cushion capital structures from rapid monetary shifts. The coexistence of pressured operating performance with stable financing configurations indicates that, in asset‑heavy industries, balance sheets can remain anchored even as margins compress. For policymakers, these dynamics suggest that measures enabling operational flexibility—such as easing regulatory frictions, facilitating cost management, or improving access to working capital—may offer more immediate protection against financial disturbances than policies aimed at engineering swift changes in debt composition. Comparative analysis across sectors and peer economies would clarify whether Egypt’s pattern reflects sector‑specific features or a broader regularity in markets with similar capital intensity and contracting institutions, thereby informing both macro‑prudential design and firm‑level risk management. | ||
| Keywords | ||
| Profitability; Leverage; Interest Rates; Real Estate; Egypt | ||
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