Performance across Casablanca, Morocco’s real estate market remained relatively stable throughout the first half of 2019 as new and planned projects continue to positively impact investor sentiment across all sectors, states JLL’s 2019 real estate market report for H1 2019.
According to the International Monetary Fund (IMF), Morocco’s real GDP growth rate, which was 3.1% in 2018, will increase to 3.2% in 2019 and reach 4.5% by 2024. This growth will be primarily driven by rapidly improving business environment and infrastructural base and increased investment activities.
“As part of the government’s efforts to continue attracting investors to the country, earlier this year we saw the official launch of the Moroccan real estate collective investment schemes (OPCI), which is expected to create significant portfolios in Morocco in the coming years and boost demand in the real estate sector overall,” said Craig Plumb, head of research, JLL MENA.
The retail sector in Casablanca continued to witness expansion and modernisation with the development of new shopping malls and retails parks in the outskirts of the city. Mall operators are constantly introducing tailored, innovative concepts to enrich the experience for customers and retailers, in a bid to achieve higher footfalls.
With the delivery of The Marina Shopping Mall in April, the total stock of mall-based retail reached approximately 1.9 million sqft by the end of H1 2019. The new mall comprises a Marjane Hypermarket and is positioned as a shopping and dining destination with a focus on value and mass market retailers.
Another neighbourhood retail centre of 53820 sqft named Le Mercato d’Anfa is due to open in Dar Bouazza before the end of the year. The future supply pipeline remains active, with almost 1.6 million sqft of further mall-based retail space due to complete by the end of 2022. While not all the planned new supply may materialise, developers are now increasingly seeking opportunities outside Casablanca given the potential saturation of the market.
Average rents remained stable among shopping malls in H1 2019, while average vacancies increased slightly with the completion of Marina Shopping Centre, which achieved an occupancy rate of 80% upon opening. Vacancies are not expected to increase further in 2020 with the delivery of the new retail parks in Dar Bouazza, as they are likely to achieve high occupancies upon opening. Although shopping malls remain the preferred choice of many retailers, some have expressed concerns about the declining footfall and the inability to achieve the volume of sales necessary for a successful business.
In a continuously changing industry, mall operators are constantly seeking to improve the quality of services to tenants and introduce innovative concepts that can enrich the experience of both customers and retailers. Higher footfalls can be achieved through tailored services to customers, combined with a focus on leisure and entertainment activities.