Currency floatation to boost Morocco’s real estate market

According to JLL’s Morocco 2018 report, the bank widened the official band within which the dirham may fluctuate to 5 %, with a maximum daily move of 2.5 % above or below the official rate. As part of a broader monetary reform, this move is intended to bolster the competitiveness of Morocco’s economy and will potentially position the country as a regional economic hub, and the gateway to Africa.

The Moroccan economy is expected to record real growth of 4% in 2018, primarily driven by increased domestic consumption and public investment, highlights the report. The economy has attracted increased levels of Foreign Direct Investment (FDI) yearly since 2005 (with the exception of 2015) with real estate attracting around half of the total FDI.

The significant increase in FDI aligns with the Moroccan government’s Vision 2020 outlining Morocco’s goals of becoming one of the world’s 20 leading tourist destinations by 2020. Almost 40% of foreign investment is from the GCC region, with a significant proportion of this total being invested in the real estate sector.

“The reforms introduced by the Moroccan government, will have a ripple effect on the real estate sector, as investors across all sectors now have the opportunity to be more flexible in their decision making,” said Craig Plumb, Head of Research, JLL MENA a real estate and investment management company.

“If the currency softens against the USD and the Euro, this will effectively make Moroccan property cheaper for investors from markets denominated in these currencies and attract further FDI into the real estate sector across Morocco and most specifically into Casablanca,” he added.

Casablanca’s hospitality market is largely dependent on business travellers, and has relatively limited hotels in the luxury segment. Occupancy rates recovered in 2017 from 62% in 2016 to 66% in 2017, owing to the performance of the 4-start hotel segment catering to conferences and exhibitions across the city. 

“With the government’s vision 2020 of converting Morocco into one of the world’s hottest tourist destinations by 2020, occupancy rates seem to be growing positively. We look forward to seeing strong results in the hospitality market this year as performance shows an upward trajectory,” said Craig Plumb.

Being the gateway location between Europe and Africa, Morocco has attracted a number of major international manufacturers such as Renault Nissan investing into the key industrial areas. The government launched an industrial acceleration program in 2014, which is designed to generate half a million jobs in the industrial sector that will in turn significantly increase Morocco’s GDP as well as providing further opportunities for real estate developers and investors.

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