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Low cost property projects set to help developers in Morocco

The country's leading real estate developer, Addoha, has acquired two Moroccan units from failed Spanish developer Fadesa and is completing projects on time. It is also moving into affordable housing, a change that is regarded as being the best way forward in the current economic climate as sales of luxury property decline.

'Morocco is well placed to weather an international recession thanks to big public infrastructure projects, rising public sector wages, falling income taxes and a promising start to the farming season,' said Anas Sefrioui, chairman of Addoha.

As well as aquiring the units from Fadesa it has sale commitments covering 24,000 housing units over the next 18 months, representing $1.02 billion in secured revenue and the construction of two cement plants have been completed on time.

'These projects represent a considerable investment of more than 7 billion dirhams It would have been inconceivable to launch operations of this size if I did not have full confidence in our country's growth dynamic,' Sefrioui said.

He added that developers will benefit in 2009 from growth in consumer mortgage lending and a government-backed drive to replace slums with cheap affordable apartments.

However concerns are increasing in Morocco about the viability of leisure and tourism developments if the supply of foreign investors dries up. Traditionally property investors from the UK, Ireland and France have bought in Morocco but these countries are facing recession.

Sefrioui said this is being taken into account and was one reason why the company is refocusing its efforts to concentrate mainly on low-budget housing units costing 200,000 dirhams each.

He admitted that sales of tourist residences would certainly slow in 2009 but pointed out that the sector represented only 7% of Addoha's sales and that those projects were geared towards Moroccan as well as international buyers.