Morocco

Prime office rents remain stable

Casablanca remains Morocco’s primary business location and largest office market with over 1.2 million sqm of office stock. The main office zones include the port area and city centre. Casablanca Finance City (CFC) has begun to emerge as a rival commercial area with its principal office building, CFC Tower, adding 210,000 sqm to Casablanca’s total office stock.

While monthly prime office rents have held steady over the last five years at c.US$ 20 psm, due to occupiers’ focus on Grade A buildings, echoing global trends, older stock has continued to experience rental declines.

Resilience in the warehousing sector

The market for light industrial and logistics facilities remains largely unaffected by the pandemic, with rents growing by 9% over the last two years[NA1] . 

This is primarily due to the government’s continued positioning of the country as an automotive manufacturing hub, like nearby Tunisia. The success of this initiative is reflected in the recent significant investments from companies such as Spirit AeroSystems, Peugeot and Renault.

This continued inbound investment is attracting supporting industries, which in turn is driving up demand for warehouse space.

Booming e-commerce

Like elsewhere many brick-and-mortar retailers suffered significant drops in revenues during the pandemic, resulting in payment defaults and bankruptcies, especially amongst smaller businesses. Some retailers are continuing to downsize physical store numbers in favour of a stronger online presence.

Despite the apparent tilt towards a greater online presence, many retailers are still struggling to find the right balance in the wake of the pandemic, with vacancy rates remaining on an upward trajectory, while headline lease rates continue to weaken.

Economic pressures distill to the residential market

Following a significant fall in both prices and transactions as a result of the pandemic, the housing market in Morocco is expected to remain stagnant as the wider economy grapples with the pressures of drought, the growing cost of imports, as well as rising inflation.

Monthly lease rates remain depressed at US$ 10-15 psm, depending on the area and unit type. Average rental rates have declined by 11% in the last two years.