Rocking the Kasbah

Tipped to be the biggest emerging international market Morocco has much to aspire to. Elspeth Hoare examines the country's current plans for growth, and what's to come.
Rocking the Kasbah
By Elspeth Hoare
Thu 28 Aug 2008 04:00 AM

Tipped to be the biggest emerging international market Morocco has much to aspire to. Elspeth Hoare examines the country's current plans for growth, and what's to come.

With a rich history and tradition infused with Arab, African and European influences, Morocco has enjoyed impressive growth over the past few years, characterized by a move away from agriculture, the swift emergence of industry and a boom in foreign direct investment.

What's more, from an international investor perspective Morocco has it all; pristine coastlines along its Atlantic and Mediterranean coasts, breathtaking mountain ranges, year-round sunshine, hospitable locals, a handful of richly historic cultural hubs all under the direction of an ambitious leader, King Mohamed VI, (dubbed "The Cool King" by Time Magazine) who has a plan to take his country firmly into the 21st century.

There are a wealth of investment opportunities in Morocco and many investors are only just realizing the potential.

Morocco has been bobbing on the international property market scene for the last few years but two significant strategies; Vision 2010 and the ambitious Plan Azur under the instruction of King Mohamed have confirmed it as a major market for investors, second-home seekers and retirees alike.

Vision 2010 is Morocco's national tourism strategy which aims to attract 10 million visitors per year to the North African Kingdom in two years time and create 600,000 jobs in the tourism sector. In order to achieve this, the Plan Azur was announced which will see the creation of six state-of-the-art coastal resorts (five on the Atlantic coast and one on the Mediterranean coast).

Obviously, such vast development means accompanying infrastructure and the government have embarked upon a network of new roads, airport upgrades and high-speed train links which will reduce the journey time from Marrakech to Casablanca (the top two tourist destinations) from 5hrs 45mins to 2hrs 10mins.

On top of this, Tangiers is set to become the Mediterranean's largest port, holding huge commercial opportunities especially with a planned underground tunnel fast-link to mainland Spain.

Hamptons International and Emaar have identified Tangiers as a major growth area and recently unveiled Tinja, a resort on the Atlantic, twenty minutes drive from Tangiers and an hour from Spain.

Tinja will be made up of six distinctive communities with a hill-top community as the centre-piece.

Typically, the resort features a wealth of recreational and leisure facilities as well as a beach and spa hotel. With this development, Emaar aims to capitalize on the rental market; a sound strategy with a current lack of quality housing available and also no tax on rental income for purchasers for five years.

Youssef Benamour, Head of Hamptons Morocco said: "Morocco offers a very different investment from countries such as Spain. For example, while Spain remains primarily a beach destination, Morocco is very much a cultural destination targeting high-end clientele interested in a home away from home at less than three hours from Europe.  We are also seeing a high level of interest from Dubai and Abu Dhabi".In terms of pricing, on the higher-end of the market, pricing is anywhere between US$1,575 and US$4,726 per sq m built, depending on the specifications and services which Benamour states remains "seriously competitive with Europe and other Middle Eastern destinations".

"There are a wealth of investment opportunities in Morocco and many investors are only just realizing the potential. As such, only a few developments have been released to the market and many of the new developments are incorporating elements of the local culture into their layout and design. Our upcoming projects will provide a unique selection of projects with a strong sense of cultural identity and arguably among the best developments that Morocco has to offer". Prices at Tinja start at US$354,000 for a townhouse and US$571,700 for a villa.

Back to the Plan Azur, there are six options to choose from. Mediterrania-Saidia is the only Plan Azur resort on the Mediterranean coastline. Launched in 2005, prominent Spanish property developer Fadesa is integral to the construction of this 7,000,000 sq m real estate project, earmarked for completion in 2009.

The real estate projects within Mediterrania-Saidia have been a phenomenal success with many selling out in record time. Fadesa has sold several plots within the development to private developers.

Le Jardin de Fleur is one example of this. Comprised of five different communities; beach front apartments and villas, 5-star hotel, townhouses and villa compounds, prices start at US$210,000 for a 1,184 sq ft apartment with a 50 sq m terrace.

The difference with Jardin de Fleur is that they are specifically targeting those looking to capitalize on rental income by coming as a hassle-free purchase ready to use. Prices include furniture, kitchen appliances, developer's fees, taxes and VAT.

It's close to the Village du Sport complex which sold out last year at US$422m for 750 units, with many going to English Premier League footballers.

Port Lixus a lower density resort than Mediterrania-Sadia is near Larache on the northern Atlantic coast, this Azur Plan resort will include two 18-hole golf courses, a new marina, a sports and leisure complex, several hotels and luxurious apartments and villas.

Salixus, a Belgian-Dutch consortium, is the master developer of this €1 billion, 4,620,000 sq m real estate project, earmarked for final completion in 2015. Villas and apartments are now on pre-release and the resort's first phase infrastructure is nearly complete, including the first golf course.

South of Casablanca is Mazagan - Situated near El Jadida on the Atlantic coast. This Azur Plan resort was launched in late 2007 and will include a world-class casino, two 18-hole golf courses, over 15 km of beach and several hotels and luxury properties.

The main consortium developer for this real estate project is the popular South African company Kerzner, with a long track record of high- profile projects including Sun City in South Africa, Atlantis on The Palm and the One and Only Royal Mirage in Dubai.Mogador Essaouira the fourth Plan Azur resort covering 5,700,000 sq m will include two 18-hole Gary Player golf courses with more plenteous properties and hotels.

Situated within three km of the mythical beach town of Essaouira, this resort is perfectly placed to become the premier beach destination for Marrakech holiday goers. Consortium leader for this project is Thomas & Piron, also developing Port Lixus and a new world-class casino resort near Ouzazate.

A consortium comprising Colony Capital, an American real estate investment firm and a large Canary Islands-based residential tourism company, has been awarded development rights to Taghazout, a US$2 billion tourism infrastructure project near Agadir on the southern Atlantic coast.

Designed as an up- market tourist destination, the development will include several four and five star hotels, two golf courses, and several residential, leisure and retail facilities. Phase 1 properties are due for completion in late 2008.

The final of the six of the Plan Azur regions is Plage Blanche where Master Development rights have been awarded again to Fadesa, the main master developer of Mediterrania-Saidia.

Investment opportunities are not relegated to these six areas and there are plenty of other areas to look at such as Rabat, (the administrative Capital), Fez the oldest and largest Medieval City in the world, Mekres (Morocco's Versailles), Agadir and not forgetting the main tourist traps of Casablanca and Marrakech.

Many buyers have been put off from the Plan Azur developments (especially Mediterrania-Saidia) because of the distance from the historical cultural centres of Morocco.

Tim Tolbert of the Essential Morocco Real Estate Agency based in Spain said: "The majority of clients who buy here do so for the lifestyle that Saidia offers, not so much because they desperately want a property in Morocco."

For those who do want a property in authentic Morocco there is Palmeraie, equivalent to Dubai's Emirate's Hills, an up- market district of Marrakech with land plots available at US$170,000-US$565,000 per acre. Construction costs here vary from US$85-US$170 per sq ft.

"Ten years ago the Palmeraie barely existed, and the land was almost worthless," said Alban Pamart, owner and director of Atlas Immobilier, a Marrakech-based real-estate agency specializing in expensive properties.

But within the last several years, Marrakech has emerged as a major style capital. Gulf Finance House recently announced its backing of The Royal Ranches in Marrakech.

The Royal Ranches forms the first element of Gateway to Morocco, a vibrant secluded resort at the foot of the Atlas mountains.Dedicating a total area of 380 hectares - a large portion of which is for the equestrian world - the development includes a world-class racing track, veterinary facilities, and climate-controlled grandstands.

Further to meeting the demands of the most ardent equestrians, the Royal Ranches boasts spectacular villas and apartments amidst rivers, lakes and waterfalls - all this alongside the finest spas, an 18-hole mountain-view golf course and upscale retail outlets.

GFH's other project Royal Resort Cap Malabata (RRCM), located on the shores of the Mediterranean has a different focus; a mixed-use tourism, commercial and residential destination covering an area of 127 hectares in Tangiers.

Cafes, galleries, exclusive shopping areas, beach houses, a 9-hole golf course, an equestrian club and convention centre are all featured. RRCM will also offer the international business community an exclusive destination for corporate meetings, conventions and exhibitions.

Commenting on the appeal of the two resorts, Ali Lamsouber, General Manager of Royal Ranches Marrakesh and Royal Resort Cap Malabata said: "Morocco is the perfect location for this landmark GFH project. Tangiers offers numerous and awe-inspiring beaches ideally located for residential, tourist and business purposes, while Marrakesh enjoys a global reputation thanks to the breathtaking landscapes it boasts in the foothills of the Atlas mountains".

Hotels have been tipped as the best long-term property investment in Morocco. Phil Kasselis, Vice President for Development in MEA announced Intercontinental Hotel Group's return to the Moroccan market earlier this year in response to a maturing UAE market describing it as "one of the most important tourist destinations proximate to the European Market".

This is further aided by Morocco's Open-Skies agreement with the EU aiming to increase its weekly connections to 1400 and which has already paved the way for the low-cost airlines providing new Moroccan routes.

As well as attracting investors, holiday-home seekers and tourists Morocco has also a large number of retirees attracted by 80% tax relief on investments within the Kingdom and deposits in Moroccan accounts.

Max Ferrero a retiree who located to Tangiers three years ago said: "The money we save on taxes pays for nearly an entire year of rent here. Tangiers is like an unspoilt Spanish city and has not become a package tour casualty".

Other incentives include no capital gains tax or inheritance tax and tax free on income from lettings for five years. (Some resorts offer guaranteed rental incomes) Property prices remain on average 50% less than in European resorts with 70% mortgages available.

Mortgage lending has increased from US$9.6bn in 2002 to more than US$27.2bn in 2007, according to Abderrahmane Chorfi, General Director of Town Planning at the Housing Ministry.

No wonder Morocco has become a burgeoning market. Adam Cornwell of GEM Estates sums it up succinctly, "Morocco will continue to grow for many years. It is a large country with infinite appeal. Expect average property prices to appreciate annually by 15 to 20% over the next five years or so."

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