Al Futtaim in Morocco mega-project

This will be the company's third super-size project in the region after Dubai Festival City and Cairo Festival City.

Al-Futtaim Capital, an investment company based in Dubai, is to finance and develop a 40,000-home affordable housing project in ­Morocco. The development, which will cover 700 hectares, is in Bouznika, about halfway between Morocco's capital, Rabat, and its business hub, Casablanca, where hundreds of thousands of people commute daily. "We had been looking for Morocco for over five years now," said Marwan Shehadeh, the managing director of Al-Futtaim Capital. "The market to target in Morocco is the mid to low-income market." Morocco is one of the few markets where the property industry has remained robust, largely because of steady demand for affordable housing. The Moroccan housing ministry says the country needs an extra one million homes, and each year more than 100,000 new families enter the market. "We will do around 40,000 units over 10 to 15 years," Mr Shehadeh said. "The project is totally in line with the government policy of supporting the middle to low-income class and to eliminate the shanty towns, with all the benefits and tax breaks and the mortgage support they give to this segment of the market." Five years ago, the Moroccan government launched a programme to provide at least 100,000 housing units each year to help eradicate shanty towns. Developers willing to build and sell homes costing less than 200,000 Moroccan dirhams (Dh91,771) are allocated land and exempted from taxes. Properties costing up to 800,000 dirhams are covered by a government fund that guarantees bank loans at low interest rates. Mr Shehadeh said his company would sell properties at much less than 800,000 dirhams. "The primary focus is the mid-income market, but 30 per cent will be social housing," he said. The total cost of the project, including land, infrastructure and construction will be more than US$2 billion (Dh7.3bn), Mr Shehadeh said. The development will also include shops. "This is our first investment in Morocco and we are keen to grow there towards other areas of our business, namely retail, automotive, insurance," he said. Al-Futtaim Capital, part of the Al Futtaim group, will be the developer, but it is speaking with several Moroccan co-developers to bring in partners with local knowledge. The investment will be done through the Al-Futtaim MENA Real Estate Development Fund, which raised about $500 million in May last year. This is Al-Futtaim's third large-scale mixed-use project in the region, after Dubai Festival City and Cairo Festival City. The two Festival City developments focus on the high-end housing market and retail. Mr Shehadeh said the company was also eyeing other markets for possible investments, including those in Abu Dhabi, Doha and cities in India. "This is a great time to be looking to invest in real estate because prices are extremely depressed compared to last year," he said. "And we are very fortunate to still have two thirds of our fund uncommitted." The Moroccan project is expected to start next year. "We are in the process of finalising the masterplan. Then we will wait for the governmental approval to start [building]," Mr Shehadeh said. Other UAE investors have entered the Moroccan low-income market, including Al Qudra Holding, which joined Addoha Group in building 359 villas in Tamesna. In April, the Abu Dhabi Fund for Development began building 17,000 units in Kenitra, made up of low and mid-income flats, plus villas and a golf course. [e-mail]