Al Futtaim to Decide on Morocco Project in 2010

DUBAI - United Arab Emirates fund manager Al Futtaim Capital will make a final decision on whether to develop a multi-billion dollar property project in Morocco in about a year, a company executive said on Tuesday.

By John Irish (Reuters)

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Published: Wed 8 Jul 2009, 2:35 AM

Last updated: Thu 2 Apr 2015, 4:42 AM

Dubai-based Al Futtaim has an option to develop a 7 million square metre plot in Bouznika on the Moroccan Atlantic coast, but due to the risky financial climate, is in no rush to proceed, Managing Director Marwan Shehadeh told reporters. “We are one year into our due diligence and have one more year before closing,” he said. “We have an option on this project and are doing our due diligence to exercise the option.” 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.

The Morocco project would be Al Futtaim Capital’s third large-scale, mixed-use project after Dubai Festival City and Cairo Festival City.

Shehadeh saw more visibility in Moroccan and Egyptian property markets which had not been hit as hard as at home by the financial crisis and where there was a clear gap in supply and demand.

“Real estate is all about supply and demand...You go to markets where there is a gap and in Dubai there is a lack of clarity in supply and demand,” he said.

“Egypt, Morocco’s visibility is much more don’t have the major macro issues.”

The Morocco project would be the second investment of the $500 million Al Futtaim MENA Real Estate Development Fund launched more than two years ago and which Shehadeh said had only deployed about a third of its allocation.

Al Futtaim Capital, a unit of Al-Futtaim Group, was still on the lookout for deals in other countries in North Africa, Abu Dhabi and Qatar, Shehadeh said, but extensive due diligence would be needed for any future investments.

“Today is risk management,” he said. Shehadeh told Reuters earlier this year the mixed-use Morocco project would cost in excess of a couple of billion dollars and would tap into a big shortage of residential homes in the kingdom.

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