The Casablanca Real Estate Market H Casablanca

Transcription

1 The Casablanca Real Estate Market H Casablanca

2 Casablanca Market Summary The Casablanca real estate market have recovered some of its poise. 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 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 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 Casablanca Prime Rental Clock Industrial Rental Growth Slowing Rental Growth Accelerating Office Rents Falling Rents Bottoming Out 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 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. Retail Hotel Industrial Rental Growth Slowing Rental Growth Accelerating Rents Falling H H Several hotels are under construction near the new LGV Casablanca (high speed line) railway station, that is due to open by the end of 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) 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. Rents Bottoming Out * Hotel clock reflects the movement of RevPAR (Revenue per available room: ADR * occupancy rate) Note: The property clock is a graphical tool developed by JLL to illustrate where a market sits within its individual rental cycle. These positions are not necessarily representative of investment or development market prospects. It is important to recognize that markets move at different speeds depending on their maturity, size and economic conditions. Markets will not always move in a clockwise direction, they might move backwards or remain at the same point in their cycle for extended periods. Source: JLL Retail Hotel Office

3 05 Office Hot Topic Immorente Invest, an investment company established in the form of a REIT, completed its initial public offering on the Casablance stock exchange. The successful IPO, launched in the second quarter of 2018, has raised substantial funds (400 MMAD) to finance the company s investment in income generating assets. The company continues its acquisitive investment strategy with the latest acquisition being a 2,500 sq m office building in Marina Casablanca, leased to the telecom company Huawei. demand for high-quality office space, while delays in the delivery of new projects continue to be experienced. m), and Greenworks Centre (15,000 sq m) in the City Entrance. Two office buildings are under construction in Casanearshore and expected to add about 50,000 sq m of GLA to the market in 2019 or Supply in La Marina will increase by about 17,000 sq m in 2019 after delivery of the second phase of the project. If no delays are experienced, total office GLA will reach 1.86 million sq m by the end of Supply A few small office buildings completed in the first half of 2018, increasing the total office supply to about 1.74 million sq m of GLA. More office space is available in the City Entrance with the completion of 12,000 sq m of GLA (Bounkit Office Building) in the second quarter of The desire for companies to improve the welfare and the performance of their employees, has resulted in increased Annual supply Stock Office F F F 1.74 H Additional office premises are expected to enter the market before the end of 2018, bringing the total office stock to about 1.76 million sq m. Notable projects currently under construction include Horizon Business Centre (4,500 sq m), CCF office building (14,000 sq Million sq m of GLA Source: JLL

4 06 07 Office Vacancy (Grade A & B) 15% 10% Performance Tenants continue to report a shortage of quality office space. Average rents have slightly increased over the first half of 2018 while vacancies in prime office buildings and integrated office parks have remained low, not exceeding 10%. The upward trend in rents is likely to continue over the next 24 months with little quality office space being delivered during this time. In the long term, we expect a decline in rents starting from 2021 following the completion of several major projects, including Casa Anfa, Wessal Casablanca Port & Zenata. The office sector is expected to see increases in sales transactions due to growing interest in income generating assets. The major sale in H was a 7,000 sq m office building in Anfa Place Business Centre. H H Rents (MAD / sq m) H H Y-o-Y 4% 153 Source: JLL

5 09 Retail Hot Topic Aksal Group, a leader in the retail market in Morocco, has concluded a partnership agreement with the multi-disciplinary firm Holmarcom to develop several investment projects in the commercial real estate sector. The new partnership aims to diversify the retail supply through the development of community malls within new urban developments in the peripheral areas of the city. the total stock of mall based retail to approximately 143,000 sq m. A further 40,000 sq m of GLA is currently under construction in Casablanca Marina and scheduled for completion at the beginning of Other notable projects expected to complete in 2019 include Marjane California extension which will add about 37,000 sq m of GLA to the market. Assuming no delays, the total retail stock is expected to reach 220,000 sq m of GLA by the end Supply A new retail gallery housed in a mixedused complex named I-Dune opened on Al Massira Boulevard in the first half of It spans an area of 5,000 sq m over two storeys, 50% of which is occupied by H&M s flagship store (their biggest in Africa). The retail area of this project was fully pre-leased before construction works began in July The completion of this gallery brings Annual supply 2020F F F 143 H Stock Retail 08 Notable projects in the pipeline include a retail park by Aradei Capital (ex. Petra-VLV) in the City Entrance. The project is still in the design phase and is scheduled to be completed in 2020 or Thousand sq m of GLA Source: JLL

6 10 11 Retail Vacancy Rate 7% 7% Performance Average rents for new leases in the prime malls have remained stable over the first half of 2018 while rents across street retail stores increased by around 9% compared to the same period last year. This upward trend in street front rental prices is likely to continue until the malls currently under development enter the market and give tenants more choice and bargaining power. Vacancies in shopping malls are generally low (5%-10%) except for the Twin Centre which continues to experience high vacancy rates. (100% on 4th and 5th floors). This is mainly due to the sale of these units to investors and the low quality of facilities management and maintenance. Developers are continually working to increase the attractiveness and footfall of their malls by improving the retail mix and introducing new concepts and services, an example of this trend is Anfa Place which is currently undergoing major renovation works. The retail market in Casablanca is dominated by street retail, with few shopping malls. Vacancies in these malls (averaging 7%) are low when compared to the whole market, that records much higher levels of vacancies (25-30 %). H H Change in Average Rents Shopping Malls Street Retail 0% Y-o-Y 9% Y-o-Y Source: JLL

7 13 Hotel Hot Topic A number of the major urban projects initiated in the past years will reach completion over the next 12 months, improving the attractiveness of the city to visitors. These include the Grand Théâtre of Casablanca, coastal redevelopment, rehabilitation of the Arab League Park and the Zoological Park of Ain Sebâa, and the Archeological Park of Sidi Abderrahmane that will have its official inauguration towards the end of keys) in the I-Dune complex located on Al Massira Boulevard and the reopening of Rivoli Hotel (210 keys) on Anfa Boulevard following its acquisition by the joint venture between Barceló Group and Tikida Group. These openings will add more than 800 rooms to the total supply of quality hotel, increasing the hotel capacity in Casablanca to about 8,200 rooms by the end of In addition to these hotel rooms, there are around 500 serviced apartment keys in Casablanca. Two other hotels are under construction in the City Entrance and will open in the few coming years, Hilton Garden Inn (118 keys) and the hotel component (120 keys) of the mixed-used development CCF. New hotel brands expected to enter the Casablanca hotel market over the coming years include Marriott (700 beds) and Oberoï (300 beds) in La Marina. Supply The overall hotel supply in Casablanca remained relatively stable over the first 6 months of 2018 at around 7,400 hotel rooms. Further properties expected to enter the market in the second half of the year include Louvre Hotel Groups complex (410 keys) in the historic city centre on Mohamed 5 Boulevard, which will operate under three economy and mid-range brands. Other anticipated completions include Onomo Hotel (200 Annual supply Stock Hotel F 8, F 8, F 7,400 H , , ,300 5,000 5, ,000 6,500 7,000 Hotel Rooms Source: JLL 7,500 8,000 8,500 9,000 9,500

8 14 15 Hotel Occupancy 65.3% 66.7% Performance The overall performance of the hotel market improved slightly over the first half of 2018 compared to the same period last year. Occupancies increased to 66.7% in the first six months of 2018, compared to 65.3% during the same period last year. Occupancy rates are expected to maintain their upward trend during the second half of the year. ADRs also increased by more than 8% compared to last year to reach USD 116. RevPAR stood at USD 77 YT June, increasing by 11% compared to the same period last year. The positive performance of the market in 2018 reflects a number of new promotion programmes for both leisure and business travellers. The opening of a representative office of the Moroccan National Tourism Board (ONMT) in China contributed to the significant increase in Chinese tourists (170,000 in 2017). It is anticipated that this positive experience will be replicated by the opening of a new representative office in India during the second half of YTD June 2017 Y-o-Y 1.4bp YTD June 2018 ADR (USD) USD107 YT June 2017 Y-o-Y 8.4% USD116 YT June 2018 Source: STR

9 Industrial Industrial Hot Topic Development of the 840 hectare Oulad Hadda industrial zone should finally materialize, with this project being carried out as a matter of priority within the Regional Development Plan (PDR) of the Casablanca-Settat regional council. Another industrial zone that will evolve in the coming years is Supply Sahel-Lakhayayta, that will be financed through the Sustainable Industrial Zones Fund (FONZID). This fund is the result of cooperation between the Moroccan government and the Millennium Challenge Cooperation (MCA-Morocco). Casablanca has 13 major industrial zones and parks totaling more than 2,000 hectares Name of industrial area Total area (hectares) ZI Ain Sebâa-Hay Mohammadi 600 ZI Bernoussi Zenata 500 ZI Mohammedia 58 PI Bled Solb Chellalate 130 ZI Moulay Rachid 29 ZI Mediouna - Tit Mellil 135 ZI Had Soualem Lakhyayta 26 ZI Dar Bouazza 10 PI Bouskoura 28 Aéropole de Nouaceur 210 Soft Group announced the development of a new industrial, logistics and retail park in Sidi Bernoussi in March The park is being developed on a site of 13 hectares with about 200,000 sq m of built area. The first phase of the project is expected for completion in the first quarter of PI Sapino 262 P2I Midparc 125 PI Ouled Saleh 32 Total 2,145

10 18 19 Industrial Performance of industrial areas Performance Demand is oriented towards quality assets, generally located within integrated industrial parks and benefiting from quality infrastructure and services. Both rents and the sale price for industrial land remained generally stable over the first half of Many industrial parks offer build-to-suit facilities with prices/rents varying considerably depending on the specific needs and characteristics of each industry sector. Name of industrial area Monthly rental rates (MAD per sq. m) Land Sale price* Serviced land Industrial unit (MAD per sq. m) ZI Ain Sebaa-Hay Mohammadi ZI Bernoussi - Zenata ZI Mohammedia ZI Moulay Rachid ZI Mediouna - Tit Mellil ZI Had Soualem - Lakhyayta ZI Dar Bouazza PI Bouskoura Aéropole de Nouaceur PI Sapino P2I Midparc PI Ouled Saleh *Sale prices vary depending on the location of the industrial area, the property s size and state of repair (raw vs serviced land)

11 20 21 Property Clock Definitions 12 O clock Office Retail 9 O clock Indicates the market has reached the rental growth peak. While rents may continue to increase over coming quarters the market is heading towards a period of rental stabilisation. Indicates a turning point towards a market consolidation / slowdown. At this position, the market has no further rental growth potential left in the current cycle, with the next move likely to be downwards. 6 O clock Indicates a turning point towards rental growth. At this position, we believe the market has reached its lowest point and the next movement in rents is likely to be upwards. 3 O clock Indicates the market has reached its point of fastest decline. While rents may continue to decline for some time, the rate of decrease is expected to slow as the market moves towards a period of rental stabilisation. Figures are based on physical surveys undertaken by JLL. The supply data covers major modern office premises, but not all of this space would be considered Grade A by international standards. We monitor supply in 6 major areas across the city, namely Historic City Centre (CVH), Central Business District (QCA), City Entrance (Sidi Maarouf), Casanearshore, Casa Anfa and Ain Diab (La Corniche). These include purpose built offices and an allowance for office space in mixed use buildings. Our estimate of future supply only includes purpose built offices that are currently under construction. Rents: The basket of office buildings in Casablanca reflects the prime office buildings. The data relates to quoted (asking rents) on a net basis (exclusive of service charges, tax and other charges) JLL data only includes space in retail malls and therefore does not cover the majority of the current stock of retail space in Casablanca, which comprises street front retail units, often standalone or as part of mixed use (residential and commercial) towers. Data on retail vacancies are based on Morocco Mall, Anfaplace Shopping Center, and Tachfine Center. Hotels Hotel room supply is based on existing supply figures provided by l Observatoire National du Tourisme. JLL Hotels tracks future hotel development data. Room supply includes all graded hotel rooms but excludes serviced apartments. Hotel performance data is based on a monthly survey conducted by STR Global on a sample of international standard midscale and upscale hotels. Industrial Definitions The industrial zones referred to in the report are in accordance with the Moroccan authorities, which are in line with international standards. The areas of the 13 main industrial areas are estimated by JLL.

12 22 Casablanca Espace les Palmiers Building, 2nd floor Ibnou Toufail street, 13 Palmiers district 20340, Casablanca, Morocco Tel: Fax: For questions and inquires about the Casablanca real estate market, please contact: Dana Williamson Head of Corporate Solutions & Tenant Representation, MENA dana.williamson@eu.jll.com Craig Plumb Head of Research, MENA craig.plumb@eu.jll.com Arthur Viseux Head of Transaction Management, Morocco arthur.viseux@eu.jll.com John Fekete Head of Consulting, MENA john.fekete@eu.jll.com Dana Salbak Associate, Research, MENA dana.salbak@eu.jll.com Walid Riahi Senior Analyst, Morocco walid.riahi@eu.jll.com Amr El Nady Head of Hotels & Hospitality, MENA SVP, Global Hotel Desk amr.elnady@eu.jll.com Dani Mansour Head of Project & Development Services, Morocco dani.mansour@eu.jll.com With MEA offices in: Dubai, Abu Dhabi, Cairo, Riyadh, Jeddah, Al Khobar, Johannesburg, Nairobi and Lagos COPYRIGHT JONES LANG LASALLE IP, INC This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on sources we believe to be reliable, but we have not independently verified those sources and we do not guarantee that the information in the report is accurate or complete. Any views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. Advice we give to clients in particular situations may differ from the views expressed in this report. No investment or other business decisions should be made based solely on the views expressed in this report.