Performance across Casablanca’s real estate market remained relatively stable throughout 2018 with the announcement of new projects, enhancing investor sentiment across all sectors, states JLL.
Oxford Economics predicts Morocco’s real GDP will increase by 3.3% in 2019, owing to the expansion of the industrial sector, increased tourism and higher levels of capital spending. As a result, the hospitality and retail sectors continued to remain active in 2018 with new projects set to enter the market in 2019. There was also a notable 8.5% increase in tourist arrivals in 2018 compared to the previous year, according to Morocco’s National Tourism Office (ONMT).
The retail sector in Casablanca continues to transform in relation to evolving consumer preferences. Retail developers are now responding to the change in demand by offering integrated retail parks housing additional leisure and entertainment facilities. Performance across the retail sector remained stable over 2018, paving the way for increased mall-based retail space entering the market.
The retail market has also remained broadly stable during the second half of 2018. The total retail stock remains unchanged at about 1.5 million sqft of GLA with no significant additions to the market.
This year, however, more retail space is expected to enter the market with the delivery of 430,555 sqft of GLA currently under construction in La Marina Casablanca. The completion of Marjane California extension, on the other hand, will add about 398,265 sqft of GLA to the market. Aradei Capital, a key commercial real estate player in Morocco, has announced the development of a 193,750 sqft retail park in Dar Bouazza, anchored by a 64,585 sqft Carrefour.
Other notable projects in the pipeline for the next few years include the Soft Group retail park currently under development in Dar Bouazza. This project is positioned as a shopping, dining and entertainment destination. The total mall-based retail stock is expected to reach about 2.9 million sqft of GLA by the end 2020.
Vacancies in main shopping malls remain low, although it is reasonable to expect higher vacancies with the delivery of new projects in 2019. While some shopping malls are experiencing high, average vacancies across the market remain stable – ranging between 5% and 10%. This level of vacancy is expected to continue as owners of poorly performing centres take measures to improve the attractiveness and footfall of their malls.