Al-Futtaim Capital, the investment arm of the United Arab Emirates-based Al-Futtaim Group, plans to develop a multi-billion dollar property project in Morocco, it said on Sunday. Al-Futtaim Capital is in the final stages of acquiring a 7 million square metre plot in Bouznika on the Moroccan Atlantic coast, where up to 42,000 residential units would be built, managing director Marwan Shehadeh told Reuters.
"The total development cost of the project will be in excess of a couple of billions of dollars," Shehadeh said, adding the project was subject to Moroccan government approval. Al Futtaim Capital has been approached by a number of potential partners for the project, some of which are listed real estate firms from Morocco, Shehadeh said, declining to name them. The Bouznika project would have a 20-year timeline.
"We are extremely bullish about the market in Morocco. There is a big gap in the middle to lower income residential market so there are very strong fundamentals," Shehadeh said. "Banks are conservative and the government is keen to support its population with housing," he said, adding that neither the population nor the government were highly leveraged.
The Morocco project is Al Futtaim Capital's third large-scale, mixed-use project after Dubai Festival City and Cairo Festival City, it said in a statement. It is also the second investment of the $500 million Al Futtaim MENA Real Estate Development Fund launched more than two years ago. Al Futtaim Capital was still on the lookout for deals in other countries in North Africa, Shehadeh said, in particular in Libya, where the housing market is still underdeveloped.
The announcement comes as some major North African real estate projects have been delayed or quietly abandoned as firms hit by the global downturn retreat from a frontier market dogged by an opaque business environment and heavy bureaucracy. As the financial crisis hit, property groups, some from the Gulf Arab region that had unveiled multi-billion-dollar deals in recent years, were forced to focus on home markets or on foreign investments most likely to generate quick cash.