Office real estate: lower prices expected in a turbulent economic environment

Office real estate: lower prices expected in a turbulent economic environment

According to a study on the evolution of business real estate in Casablanca, carried out by the Carré Immobilier agency, the majority of respondents consider that the offers are unsuitable, in particular because of the excessive cost.

The Carré Immobilier real estate agency organized a press conference on Monday June 20 at its premises to present the results of its study on business real estate in Casablanca. The group conducted the survey for three months, from March to May 2022, and interviewed 226 panelists.

The latter were companies made up of 80% VSMEs and 20% large companies. In addition, 57% of the companies surveyed were active in the service sector, 13% in trade and 30% in industry. 93% have their headquarters in Casablanca.

The study shows a generally mixed level of satisfaction from the panel. 47% of respondents consider the business real estate offer “not sufficiently” appropriate, while 7% consider it “not at all” appropriate. In 74% of cases, the reason given is related to the cost, considered too high.

“The objective of this survey was really to look at user needs. We therefore focused on demand and examined how they perceived the supply of business real estate in Casablanca,” explains William Simoncelli, director and founder of Carré Immobilier.

More specifically, the aim was to take stock of what has happened over the past three years, in addition to prospective work. For this, the panelists were asked to comment on their possible searches for business premises in Casablanca during the last three years, and on their searches for premises for the next three years. “We focused largely on the office real estate aspect. This is the segment that attracts the most transactions on the market and represents the majority of panelists,” says William Simoncelli.

A changing demand for the years to come

52% of the panelists questioned said that they had looked for a business premises in the last three years. The properties sought were, up to 63%, intended for the creation (43%) or the extension of businesses (20%). In 37% of cases, it was a desire to relocate. “We can assume that the Covid context has influenced these relocation wishes. Indeed, a certain number of professionals have been obliged to review the organization of their premises in a more restrictive sanitary context”, notes Carré Immobilier.

On the nature of the searches front, 75% of respondents indicate that their search was exclusively for premises. Among them, 60% were based on leasing, against only 29% on acquisition. The surface areas mainly sought concerned overall moderate surface areas, less than 300 m² in 60% of cases. In the panel surveyed, 48% of asset research projects were unsuccessful. “It was the VSMEs and the service sector that had the most difficulty in carrying out their project”, specifies Carré Immobilier.

Regarding the next three years, the survey noted a certain stability in demand despite a post-Covid economic context. Some aspects of the application, however, change. Thus, 52% of respondents say they are looking for investment in new premises, attesting to a certain continuity in the overall volume of demand. 73% of respondents planning investments said they had projects in the past years.

The first change is that the majority of projects relate to extensions and creations at 27% and 53% respectively. “We also note a decline in the share of relocations compared to past projects, and an increase of 7 points in extensions, a sign that economic activity is tending to revitalize”, notes the real estate agency. In 68% of cases, the nature of the search concerns premises, compared to 75% in the last three years. For the rest, 22% concern bare land and 10% both (premises and bare land).

The second change is related to the desire to acquire. In 55% of cases, acquisition is desired for future projects, while this option only counted in 43% of cases for past projects. “This increase mainly concerns large companies, which have easier access to credit. In Morocco, they remain very fond of developing a real estate heritage; this is highly appreciated by the banks and shows that they have also held up better in the face of the crisis”, explains William Simoncelli.

The change is also perceived from a sectoral point of view in services where companies have more strongly projected themselves on surfaces of 100 to 300 m² concerning premises. On this type of area, concerning past projects, 41% of requests concerned this type of area, compared to 60% for projects for the next three years.

A long-term change to come in office real estate

Prone to profound changes generated by the Covid-19 crisis, such as teleworking or self-employment, office real estate is experiencing a more troubled economic situation than that of commerce or industry.

William Simoncelli notes a real paradigm shift concerning this segment, which concentrates the greatest number of transactions. “On the business real estate market, there is a real issue about office real estate. Because the pandemic has reshuffled the cards. We are going to be oversupplied in this category with an aging fleet. The latter will probably be renovated because it will cost less than developing new. Prices are settling with demand which is slowing down. »

It has also been noted for several years – and the trend continues in the projects of companies seeking assets – that the sizes of the premises have decreased. “Requests are directed towards smaller structures, generally less than 300 m². When we switch to larger structures, such as 1,000 or 1,500 m², we are talking to beautiful SMEs which have a debt lever thanks to which it is more interesting, for them, to buy than to rent. In Casablanca, we are heading towards office real estate which raises many questions and is heading towards a lot of empty offices. We will have to find solutions; either to modify them, or to complete them”, specifies William Simoncelli.

“In Casablanca, real estate suffers less from an effect linked to the structure of our market than to the economic situation that we have just overcome. We don’t know what the future will be in three months. What we see is that companies want Plug and Play, but they want it at the prices of so-called standard offices; there is therefore pressure on prices. I think there is going to be some damage to office real estate and, ultimatelythe prices will be reduced”he concludes.

Leave a Comment

Your email address will not be published.