Listed Real Estate: Saham Bank Unveils New Investment Recommendations

The Moroccan real estate landscape is currently undergoing a profound structural transformation, marking a definitive departure from the supply-driven models that defined the previous decade. Between 2010 and 2024, the sector was characterized by a heavy reliance on social housing, which accounted for nearly 47% of all completed units. However, despite this aggressive production, analysts at Saham Capital Bourse observe that a significant housing deficit persists into 2024, compounded by a rising inventory of vacant urban dwellings and secondary residences. In response to these lingering imbalances, the State has recalibrated its interventionist strategy, pivoting toward two cornerstone initiatives: the "Villes Sans Bidonvilles" program, which seeks the total eradication of substandard housing by 2030, and the "Daâm Sakane" plan, which shifts the focus toward direct demand-side subsidies. This strategic realignment is projected to catalyze a new production cycle exceeding one million units by 2030, representing an addressable market valuation of approximately 550 billion dirhams and providing the fundamental backdrop for the recent recovery in listed real estate equities. While the macroeconomic environment appears favorable, characterized by an alignment of state support and a gradual restructuring of major developers following the 2014-2020 contraction, the current bullish cycle is built upon a heterogeneous foundation. The forecasted production surge is increasingly centered on the middle-standing segment, yet this momentum masks varying levels of exposure to market volatility and disparate margin profiles among the industry’s major players. This divergence necessitates a highly selective approach to valuation, as the capacity for long-term value creation differs sharply across the competitive landscape. Alliances Développement Immobilier stands out as a primary beneficiary of this new paradigm through its strategic pivot toward "Moyen-Standing+" and luxury segments. This repositioning is expected to yield the highest margins in the sector, with Saham Capital Bourse forecasting a revenue compound annual growth rate of 20.4% through 2030, ultimately reaching a turnover of 6.5 billion dirhams. As the group concludes its heavy investment phase in the hospitality sector—estimated at 3 billion dirhams by 2029—the resulting improvement in capital efficiency should drive a return on capital employed (ROCE) of 15.8% by 2030. Despite these robust fundamentals, the equity continues to trade at a significant 33% discount on its 2028 EV/EBITDA multiple relative to its peers, prompting a buy recommendation with a price target of 685 dirhams. Conversely, the outlook for Résidences Dar Saada remains nuanced. While the firm is the most direct beneficiary of the social housing and slum clearance programs, with a projected revenue CAGR of 50.1%, its growth is intrinsically tied to lower-margin social segments. With gross margins expected to settle at a sector-low of 22.6%, and concerns regarding management transparency and long-term strategic visibility, the market appears to have already priced in the anticipated recovery. Consequently, the upside remains limited, justifying a "hold" rating as the stock approaches its fair value. Finally, the investment thesis for Addoha presents a cautionary tale of valuation overstretch. Although the group maintains a dominant multi-segment presence and a strategic foothold in African markets, it remains heavily burdened by structural working capital requirements and modest operational profitability. Following a meteoric 5.5-fold increase in share price since early 2023, the stock now commands a 51% premium over its peers. Given that its ROCE is unlikely to exceed 8.1% by 2030, the current market pricing appears disconnected from the group’s intrinsic capacity for earnings growth, leading to a sell recommendation as the market reconciles these exuberant valuations with fundamental realities.