Morocco drive to survive slump

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MOROCCO DRIVE TO SURVIVE SLUMP

Friday, 26 Dec 2008

Economies in developing countries look set to grow while those of more prosperous nations prepare for recession, and Morocco is optimistic about its abilities to sustain its recent growth. The Morocco property market is a key part of the country’s economy, and while Spanish developer Fadesa has been an early casualty of difficult times, the company’s two Moroccan projects will not be affected. The country’s own leading real estate developer, Addoha, has taken over these units and look set to complete on schedule.

This is good news for investors and for confidence in the Morocco property industry, which is likely to benefit further from planned government projects to replace Morocco’s slums with more affordable housing. A strong shift from the production of higher to lower cost accommodation in Morocco is expected in 2009, arising from the slowing down of the international investment market.

The downturn is anticipated because traditional purchasers of Morocco property, second home buyers from the United Kingdom, Ireland and France, fear recession in their home countries. Concerns were raised about the knock-on effects of the slowdown on the Moroccan building industry. Anas Sefrioui, chairman of Addoha, is optimistic about his company’s ability to sustain itself, by refocusing its efforts to produce low-cost housing units of around 200,000 dirhams (US$25,000) each.

Having secured over US$1 billion in revenue from the 24,000 housing units of the Fadesa acquisition, Sefrioui is confident that the industry for property in Morocco is safe, saying ‘it would have been inconceivable to launch operations of this size if I did not have full confidence in our country’s growth dynamic’. He also pointed out that building tourist accommodation represented only 7% of Addoha’s sales, and that much of that sector was produced for the domestic as well as for the foreign market.