New investment scheme to boost real estate in Morocco


The Moroccan real estate sector recorded a subdued performance on most indicators in 2019, as prices and demand continued to fall or show little improvement. According to the real estate price index published quarterly by Bank Al Maghrib, the country’s central bank, and the National Agency for Land Conservation, Valuation and Cartography (Agence Nationale de la Conservation Fonciere, du Cadastre et de la Cartographie, ANCFCC), property prices decreased by 0.2% year-on-year (y-o-y) in the first quarter of 2019 but rebounded to post a 0.9% y-o-y increase in the third quarter. Prices in the residential category rose by 0.4%, while land prices were up by 1.5% and professional properties – including commercial premises and offices – saw prices 2.2% higher. However, the overall transaction volume dropped by 0.8% y-o-y in the third quarter, driven by professional property transactions falling by 2.5%.

Nevertheless, building is maintained at a steady pace, with 165,526 residential units delivered in 2018, up from 155,577 in 2017, and shopping centres continue to open in large cities. Looking ahead, a new collective real estate investment scheme (organisme de placement collectif immobilier, OPCI), similar to real estate investment trusts, is set to bring new life to the sector, which, along with construction, represents some 18% of GDP.

Financing Development

In June 2019 the regulatory framework for OPCIs was introduced, bringing with it the potential to add Dh200bn ($20.8bn) worth of assets to the market. At the time, a target was set to transform 15% of the country’s real estate base into such assets. OPCI portfolios are focused on rental properties and non-built land, and allow investors to enter the market without facing the risks associated with managing the properties themselves. OPCIs will be regulated by the Moroccan Capital Markets Authority, and investors can expect returns of 6-7%, which is higher than that of stocks and bonds. To help promote the scheme, the 2019 Finance Law instituted a 60% tax exemption on dividends from OPCIs. The first OPCI accredited in the kingdom – and North Africa more widely – was launched in December 2019 by AjarInvest, a subsidiary of the Caisse de Dépot et de Gestion (CDG), a state-owned investment fund, and CIH Bank.


The price of commercial premises around the country dropped by an average of 0.4% y-o-y in the third quarter of 2019, while the number of transactions fell by 1.2%. While the retail segment showed signs of quarterly growth in many cities, in Rabat and Casablanca transactions declined by 34% and 9%, respectively. According to a report by global real estate consultancy JLL, the vacancy rate at retail properties in the economic capital of Casablanca expanded from 7% in the first half of 2018 to 9% in the first half of 2019, with the rate expected to contract to mid-2020. Retail rental rates, meanwhile, remained stable y-o-y.

JLL reports that retail space in the economic capital rose from 138,000 sq metres of gross leaseable area (GLA) in 2017 to an estimated 190,000 sq metres in 2019, and is projected to reach 265,000 sq metres in 2020. The Marina Shopping Centre, a Dh1.3bn ($135.4m) complex comprising 43,000 sq metres of GLA on the Atlantic coast in Casablanca, opened in April 2019, while the 5000-sq-metre Le Mercato d’Anfa shopping mall, built by developer Anfa Realties at a cost of Dh50m ($5.2m), opened in Dar Bouazza south of Casablanca in October 2019.

As consumer demand is driving a more diversified offer in leisure and entertainment, market players are investing in the segment. There were four largescale malls in Casablanca as of 2019 and three in Rabat, with the latter city welcoming the Arribat Center mall in November 2019, a Dh2.4bn ($250m) project by the Aksal Group that hosts 135,000 sq metres of GLA for additional commercial and leisure options. The Aksal Group opened Morocco Mall Casablanca in December 2011, which is the second-largest mall on the continent, and is working towards similar projects in Rabat and Marrakech.

Office Space

In the third quarter of 2019 the number of transactions in the office segment saw the strongest fluctuation among property lines, with an 11% y-o-y decrease; however, prices increased by 12%. Many major cities experienced quarterly declines in transaction volume during the period: a contraction of 78% was seen in Tangier, 63% in Agadir and 40% in Casablanca. JLL notes that Casablanca had an office supply stock of 1.72m sq metres of GLA in 2017, 1.77m sq metres in 2018 and 1.86m sq metres in the middle of 2019.

Unused stock remains in the market, keeping supply higher than demand. Construction is continuing nonetheless, with various sites under way for office and industrial space. In the economic capital, the delivery of major projects in 2020 – such as the CFC Tower with 13,000 sq metres of GLA and 50,000 sq metres of additional space at the Casa Nearshore business centre – will complement the deliveries of 2019, which included the 20,000-sq-metre Marina Marjane Towers. Completed in April along with the Marina Shopping Centre, these four units helped increase the supply of retail and industrial space by 200,000 sq metres of GLA in 2019, bringing total stock to 1.9m sq metres at the end of the year.

An October 2019 study by financial services firm Deloitte found that 22% of Casablanca’s 200,000 sq metres of office space under construction during that year was pre-ordered, down from 38% in 2018. Despite this fall in build-to-order projects, the study shows that Casablanca’s central business district is enjoying its highest project initiation numbers since 2014, supported by the arrival of new tramway lines to facilitate movement of professionals in the city (see Transport & Logistics chapter). “Casablanca’s population is expanding by 150,000 inhabitants each year. The real estate market – both residential and non-residential – will need to keep growing in the coming years to meet that demand. This should ensure stable activity for construction companies,” Karim Ammar, managing director of construction equipment supplier PERI Morocco, told OBG.


The kingdom’s overall residential market also recorded slight y-o-y movement in the third quarter of 2019, with a 0.4% increase in prices and a 0.8% decrease in transaction volume. Quarterly, the number of villa transactions dropped by 14% in Casablanca, 22% in Rabat and 25% in Agadir, while rising by 25% in Fez and 23% in Tangier. Apartment transactions also grew by 17% in Tangier in the third quarter compared to the previous three months, while the category expanded by 9.5% in Fez. No major city saw apartment transactions fall by more than 10%. The transaction volume for houses, meanwhile, grew by 23% quarter-on-quarter in Marrakech and fell by 36% in Fez.

From a financing perspective, around 30% of Moroccan household income is absorbed by loans, while the rate is slightly higher, at 32%, for public servants, who enjoy specific advantages for loans. “The maximum borrowing capacity of households should be Dh4000-4500 ($415-470) per month to be able to finance property investments,” Sara Kadiri, head of sales at real estate website Mubawab, told OBG, indicating that the mismatch between supply and demand in this segment is more about price than quality. “There is strong demand from the middle class for properties valued between Dh700,000 ($72,900) and Dh1m ($104,000), but supply is lacking. Upper-middle-class demand for properties over Dh1m ($104,000) is also underserved,” she said.

Real estate values for taxation purposes have historically been shaped by the reference systems published by the ANCFCC and the General Directorate of Tax, but these have been criticised for not properly reflecting the market value of properties and standardising them without incorporating a unit’s unique attributes. Officials of these organisations have moved to remedy this by developing a single valuation system to avoid divergence between the administrations; rezoning areas for more detailed mapping; and better integrating factors such as the age of the building and specific characteristics of the unit or land plot into valuations. The new price database – which is digital, accessible to the public and set to be updated more frequently – was introduced in Casablanca in mid-2019 and is slated to be applied in all cities by June 2020.

Social Housing

In the social housing category of the residential market, over 400,000 units have been built since the adoption of the social housing programme in 2010, including nearly 110,000 units constructed in 2017 and 2018. These units of 50-80 sq metres are sold for Dh250,000 ($26,100) or less. According to Youssef Ibn Mansour, former president of the National Federation of Property Developers, a drastic improvement was made in the social housing deficit between 2000 and 2018, with the figure falling from 1.2m units to 400,000 over the period.

As of late 2019 some 80% of all residential buildings under construction fell within the parameters of social housing. Such projects benefit from tax waivers and duties payable exemptions, in addition to a value-added tax break for buyers and easier access to credit. However, these incentives are set to end in December 2020, and many stakeholders are waiting to see if the benefits will be extended or revised in some way. Mansour also notes that many families who can afford homes in the Dh350, 000-800,000 ($36,500-83,300) price range cannot find properties that cater to the segment, and thus fall back on social housing, which keeps demand high.

One problem with social housing is that the locations where many of the units are being built are in new areas that lack proper city infrastructure, due to cheaper and more available land. “There is robust demand for properties in the Dh150,000-300,000 ($15,600-31,300) price range and about 1m unoccupied buildings. This mismatch is mainly due to the poor quality of the apartments on the market and a lack of appropriate services in those living areas to support uptake of the properties,” Kadiri told OBG.

New Cities Programme

In order to decongest a handful of large cities and meet demand for housing in certain regions, the New Cities Programme was launched in 2004 as a mega-project to create additional urban centres. The project was awarded to public contractor Al Omrane, and 15 years later four cities with a total capacity of 1m people had been completed at a cost of more than Dh100bn ($10.4bn). The cities are Tamansourt, near Marrakech; Tamesna, near Rabat; Chrafate, outside Tangier; and Lakhyata, south-west of Casablanca.

However, the uptake of residential properties in the new cities has been limited, with residents citing a lack of public infrastructure and other amenities, which has a knock-on effect on resale values. As of early 2018 just 150,000 people lived in the four locales. To revitalise their offering, in January 2020 Al Omrane signed a deal with Aswaq Management Services Africa. The management firm is tasked with creating and carrying out a strategy that will renew the image of these cities as attractive places to live, while efforts are ongoing to build up security, connectivity and the necessary infrastructure.

The CDG and state phosphate company OCP Group are also working to create new cities, including the eco-cities of Ben Guerir in the Marrakech-Safi region and Zenata outside of Casablanca. The former is being built to strict LEED standards for 90,000 residents, with the Mohammed VI Polytechnic University as the area’s focal point. Zenata, for its part, is being built with a focus on air quality, sewage, transport and job creation. Green space is emphasised, the direction of winds off the Atlantic ocean have been modelled for a natural cooling effect and rainwater will be directed to retention ponds.


The anticipated establishment of various OPCIs during 2020 is set to bring more investors into real estate. However, the funds channelled through these vehicles must be used to finance offerings that are more in line with buyers’ needs, especially in the residential segment. An adequate supply of housing catering to all income segments is needed, but developers must be cognisant of the factors that potential buyers consider, from quality to supporting area infrastructure. Nevertheless, construction will drive on across all real estate segments, as Morocco experiences rapid population and economic growth.

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