Construction and Real Estate Developments in Morocco Presentation - - PowerPoint PPT Presentation

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Construction and Real Estate Developments in Morocco Presentation - - PowerPoint PPT Presentation

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Construction and Real Estate Developments in Morocco Presentation by MEYS Emerging Markets Research www.meys.eu Profile Construction & Real Estate sector Morocco Construction & Public Works (excluding Real Estate) is 6.1% of GDP

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Construction and Real Estate Developments in Morocco

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Presentation by MEYS Emerging Markets Research

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Profile Construction & Real Estate sector Morocco

▪ Construction & Public Works (excluding Real Estate) is 6.1% of GDP (2018) ▪ Total Value Added of Construction & Public Works (excluding Real Estate) is 59.7 billion dirhams (2018) ▪ Approximately 60.000 companies (formal) ▪ 90% are SMEs (turnover < 75 million dirham) ▪ With a turnover of 4.1 billion dirhams (2018) conglomerate Addoha is the largest Moroccan real estate company in Morocco ▪ The largest Moroccan construction company is SGTM with a turnover of 2.8 billion dirhams (2018)

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Sub-sector Market size 2017 Steel and Aluminium construction works 8 billion dirhams Steel and Aluminium production 24 billion dirhams Production building materials (cement, concrete, bricks, ceramics, marble) 38 billion dirhams Real estate developers and construction companies (incl. infrastructure): Private 84 billion dirhams Public 17 billion dirhams Market size formal 171 billion dirhams Market size informal 35 billion dirhams Total market size 206 billion dirhams

Total market size Moroccan Real Estate & Contruction sector is estimated by MEYS at 206 billion dirhams (19 billion euros)

Source: HCP, Ministry of Finance, Maroc1000.net, annual reports, business associations

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960.000 980.000 1.000.000 1.020.000 1.040.000 1.060.000 1.080.000 2012 2013 2014 2015 2016 2017 2018

Total (formal) employment in Construction*

Total employment in Construction is around one million people (10% of total formal employment)

Note: (*) informal sector provides over 210,000 jobs Source: Ministry of Housing and Urban Planning

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  • 2,0%
  • 1,0%

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0%

Growth rate y/y Construction Industry Growth rate y/y GDP

Growth rate construction industry lagging behind national economy since 2012

Source: HCP Maroc; compiled by MEYS

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  • 15%
  • 10%
  • 5%

0% 5% 10% 15% 2014Q1 2014Q2 2014Q3 2014 Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2

Annual growth rate local cement consumption (%)

Low growth rate cement consumption in 2018

Total cement consumption in 2018 at the lowest level in ten years

Source: APC, Ministry of Housing and Urban Planning; compiled by MEYS

15,1 16,2 19,1 20,4 20,6 21 21 21 21 21 21 14 14,5 14,6 16,1 15,9 14,9 14,1 14,2 14,2 13,8 13,3 10 12 14 16 18 20 22 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Cement market Morocco

Production capacity cement (Mt) Consumption cement (Mt)

Source: APC, BMCE Capital

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8.000 10.000 12.000 14.000 16.000 18.000 20.000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Constructed floor space* (1,000 m2)

Residential Other

Lower volumes authorized constructed floor space in 2018

On average 80% is for construction of residential property

Note: (*) authorized construction projects Source: HCP Maroc

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Size of the current Moroccan housing market

7.1 million housing units occupied, of which 65% in urban areas

Urban % Rural % Total % Housing units occupied 4 627 110 74,8 2 444 008 91,3 7 071 118 79,8 Housing units vacant 986 441 15,9 100 705 3,8 1 087 146 12,3 Housing units seasonal occupied 574 833 9,3 131 288 4,9 706 121 8,0 Total housing units 6 188 384 69,8 2 676 001 30,2 8 864 385 100

Source: HCP Maroc

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0,4% 1,1% 1,3% 3,9% 6,6% 7,3% 8,3% 11,0% 12,5% 12,8% 13,9% 20,9%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% Dakhla-Oued Ed Dahab Laâyoune-Sakia El Hamra Guelmim-Oued Noun Drâa-Tafilalet Oriental Béni Mellal-Khénifra Souss-Massa Tanger-Tétouan-Al Hoceïma Fès-Meknès Marrakech-Safi Rabat-Salé-Kénitra Grand Casablanca-Settat

Number of current housing units occupied per region (% of total)

Largest number of housing units occupied in Morocco’s four main cities Casablanca, Rabat, Marrakech, and Fes

Source: HCP Maroc

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Total demand for housing is estimated at 1.6 million units

1.4 million in urban areas, 0.2 million units in rural areas

Source: Ministry of Housing and Urban Planning

Regional Main cities

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Market size commercial real estate in Morocco

Grand Casablanca is dominating the national market of real estate property

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  • Total authorized constructed floor space commercial real estate in 2018 about 2 million m2
  • Since 2009 annual average constructed floor space real estate is between 1.6 – 2.2 million m2,

with the exception of 2014

  • Grand Casablanca largest real estate market with a share of 15% in national volume
  • Total (expected) value of authorized construction projects commercial real estate in 2018 is

5.3 billion dirhams (approx. 486 million euros)

500 1.000 1.500 2.000 2.500 3.000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Constructed floor space commercial property Morocco* (1,000 m2)

Note: (*) authorized construction projects Source: HCP Maroc

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Strong increase in hotel capacity in Morocco

Objective Government is +200,000 hotel beds during period 2010 - 2020

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95.180 174.019 187.874 200.091 211.974 221.611 231.334 242.707 251.206 261.256 375.000

50.000 100.000 150.000 200.000 250.000 300.000 350.000 400.000 2000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020*

Number of hotel beds in Morocco

Note: Objective of ‘Vision 2020’ Source: Ministry of Tourism

  • Approx. 3,500 hotels
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Marrakech main destination for hotel construction

Almost 30% of hotel beds can be found in Marrakech

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27,2% 1,2% 1,8% 2,4% 2,5% 2,8% 3,3% 3,9% 4,7% 7,8% 14,9% 27,4%

0% 5% 10% 15% 20% 25% 30% Other cities Oudja-Saidia Meknes Essaouira-Mogador Rabat Ouarzazate Ifrane Fes Tanger-Assilah Casablanca Agadir Marrakech

Hotel beds by main Moroccan cities, 2018 (% in total hotel beds)

Source: HCP Maroc

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  • 50.000

100.000 150.000 200.000 250.000 300.000 350.000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total number started newly built social housing units (lots, appartments)

Lower volume new social housing projects

Between 2018 – 2022 Government objective to build 800,000 new social housing units, mainly appartments

Source: Ministry of Housing and Urban Planning

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5.000 5.500 6.000 6.500 7.000 7.500 8.000 8.500 9.000 9.500 10.000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Government fiscal expenditures in real estate activities* (million dirham)

Lower fiscal stimulus by central government in real estate

Social housing programs important benificiary public investment funds

Note: (*) include investments in public real estate companies and tax advantages for social housing programs Source: Ministry of Finance; compiled by MEYS

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Two types of social housing programs initiated since 2008 as part of reducing the national housing deficit:

  • 250,000 dirham social housing program; objective to build 300,000 houses between 2010 - 2020
  • 140,000 dirham social housing program; primarily aimed at reducing the number of

‘bidonvilles’ or city slums in Morocco; objective to build 130,000 houses between 2008 - 2020

Main results ‘250,000 dirham program’ by the end of 2017:

  • 595,794 housing

units received authorisation for construction

  • 221,660 housing

units are still under construction

  • 366,462 housing

units have been completed

  • 70% of the realised

construction projects are in three regions Casablanca (45%), Tanger (13%), Rabat (12%)

  • 96% developed by

private sector

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Main results ‘140,000 dirham housing program’ by end 2017:

  • 44,239 housing units received authorisation for construction
  • 9,838 housing units are still under construction
  • 28,549 housing units have been completed
  • 91% of the realised housing projects are in the five regions Fes/Meknes (27%), Souss Massa (22%),

Casablanca (17%), Marrakech (16%), Oriental (9%)

  • 60% developed by private sector
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50.000 100.000 150.000 200.000 250.000 300.000 2010 2011 2012 2013 2014 2015 2016 2017

Volume real estate loans in Morocco* (million dirhams)

Total Households Developers

Total volume in real estate loans has increased with more than 30% since 2010 to almost 260 billion dirhams

Real estate loans to households has highest share (75%)

Note: (*) level in December Source: BAM

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5.000 6.000 7.000 8.000 9.000 10.000 11.000 12.000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018p

Foreign direct investments flows in Moroccan real estate (million dirham)

Note: (p) provisional figure Source: Office des Changes

FDI-flows in Moroccan real estate under pressure in 2018

Main investors from Europe and Gulf region

Mojor investors Moroccan real estate market

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High volumes money transfers Moroccan Diaspora

85% is invested in real estate (primarily housing)

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50.000 52.000 54.000 56.000 58.000 60.000 62.000 64.000 66.000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total money transfers MRE (million dirhams)

Source: Office des Changes

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Marrakech Redevelopment inner city (570 million euro): ▪ Infrastructure ▪ Touristic sites Casablanca Casablanca Port (570 million euro): ▪ Shipyard ▪ Fishing port ▪ Marina ▪ Commercial ▪ Restaurants ▪ Residential Tanger Tanger Metropole (730 million euro): ▪ Marina ▪ Cruise terminal ▪ Commercial ▪ Leisure ▪ Hotels ▪ Residential

Major real estate projects 2014 - 2020

Rabat – Salé Bouregreg Valley (820 million euro): ▪ Theatre ▪ Residential ▪ Museum ▪ Marina ▪ Leisure ▪ Hotels ▪ Commercial

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The Bank of Africa Tower, Rabat (250m) Construction 2018 - 2022 Casa Finance City, Casablanca Construction

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Large social housing projects

Tamansourt (near Marrakech):

  • 2004 - 2015
  • 90.000 new units
  • 450.000 inhabitants
  • Total costs: 39.5 billion dh

Tamesna (near Rabat):

  • 2004 – 2020
  • 50.000 new units
  • 250.000 inhabitants
  • Total costs: 23 billion dh

Sahel Lakhyayta (near Casablanca):

  • 58.000 units
  • 300.000 inhabitants
  • Total costs: 25 billion dh

Chrafat (near Tanger): ▪ 2009 - 2016 ▪ 30.000 units ▪ 150.000 inhabitants ▪ Total costs: 24 billion dh

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Thank you for your attention MEYS Emerging Markets Research E-mail: info@meys.eu Website: www.meys.eu