Contrary to the less buoyant national picture, the Casablanca real estate market has performed well during the first half of 2018 after a slow start to the year. While the volume of transactions has significantly increased in recent months, it remains below the level recorded during the same period of 2017 according to figures from the central bank.
The decrees implementing the law 70 – 14 on REITs (Real Estate Investment Trusts) continue to incur significant delays. Only two decrees have been adopted since the promulgation of the law in August 2016. Many companies have been established in accordance with REITs business model pending the effective application of the law.
The previous oversupply of office space has been gradually absorbed over the past 12 months, partially due to continued delays in the delivery of new buildings. There have been relatively few completions in the first half of 2018 although further completions are expected by the end of the year. While average rents have increased in prime buildings, they have decreased in poorer quality stock with increased vacancies in areas such as the Historic City Centre.
The retail segment did not experience any significant change during the first half of 2018. Supply has increased slightly with the completion of a commercial gallery of 5,000 sq. m of GLA on Al Massira Boulevard, one of the main commercial arteries of the city. Average rents have increased slightly over the first half of 2018 while vacancies in main shopping malls remain generally low.
Several hotels are under construction near the new LGV Casablanca (high speed line) railway station, that is due to open by the end of 2018. Hotel supply remained unchanged during the first half of 2018 but further openings are expected later this year including a hotel complex of 411 units being developed by Louvre Hotels Group and the investment fund H Partners. As usual, Ramadan had a significant impact on the demand for hotel rooms in Casablanca, with a significant decline in occupancies during May and June.
The Industrial Acceleration Plan (PAI) 2014-2020 has had a positive impact on the industrial sector. This plan has contributed to increased exports, an upgrading of the industrial infrastructures and the enhancement of the city’s competitiveness at the regional level.
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Author: Craig Plumb
Craig has over 20 years’ experience providing clients with quality advice on real estate market conditions in the UK, Asia Pacific and the Middle East. With a background in urban economics and spatial planning, he has particular expertise in the areas of property market research, development consultancy, transport related infrastructure projects and corporate real estate.
Since moving to the UAE in 2006, Craig has authored over 50 research reports on different aspects of the MENA real estate market. He has also provided market research and consulting services to major investor, developer and government clients and has appeared as an independent real estate expert before the Dubai International Arbitration Centre (DIAC).
Craig holds a Bachelor of Arts in Economics & Geography from Lancaster University and an M.Phil in Environmental Planning from Reading University (UK).