Channelled through investment fund Wessal Capital, billions of dollars in Gulf money is reshaping the centre of the cities of Rabat and Sale. Published in MEED, 17 December 2014
If all goes to plan over the next few years, two of Morocco’s biggest cities will be transformed thanks to investment from the Gulf. Wessal Capital is a e2.5bn ($3.1bn) fund whose shareholders include Qatar Holding, the UAE’s Aabar Investments, Kuwait’s Al-Ajial Investment Fund and Saudi Arabia’s Public Investment Fund, as well as the Moroccan Fund for Tourism Development.
In the first half of 2014, Wessal Capital launched its first two projects, a e530m scheme to transform Casablanca’s port and a e775m project to reshape the area between the capital Rabat and the neighbouring city of Sale.
“These are two very large developments,” says Tarik Senhaji, director-general of the Moroccan Fund for Tourism Development and a board member of Wessal Capital. “They are structural projects and they will have a significant impact on the destinations.”
The Casablanca scheme, known as Wessal Casa-Port, was the first to be launched, in April. It involves redeveloping both the port and the nearby Medina area of the city over five to seven years. Once complete, the 120,000-square-metre site will include a marina, houses, offices and shops, as well as a science park and library, and a cruise ship terminal.
Senhaji says it is being carried out with an eye on the historic character of the area. “Casablanca is a very modern city and it has grown from the port and expanded towards the suburbs,” he says. “This is really a regeneration of the historical centre. Business life has moved away from Medina to the modern area and for us, this project is all about bringing modernity and authenticity together.”
The project in Rabat, known as Wessal Bouregreg, was launched a month after the Casablanca port scheme and will take a similar amount of time to complete. It treads a similar path in terms of reinvigorating an overlooked urban area. It is centred on a 1.1-square-kilometre stretch of the Bouregreg Valley between Rabat and Sale, and includes plans for a marina, a 105,000-sq-m business centre and 120,000 sq m of retail space.
Among the cultural centrepieces will be a Museum of Archaeology and the History of Man, and a 1,900-seat national theatre, the Grand Theatre of Rabat, designed by the feted Iraqi-born architect Zaha Hadid.
“The Rabat project is very much based around culture,” says Senhaji. “Historically, Moroccan cities traditionally turned their back on the sea and on the river, because there were a lot of Spanish and Portuguese pirates, so you have a lot of fortified areas. So this is really to open up on the river.
“It will be a fantastic destination for culture, but also it is going to be profitable because there will be very interesting commercial elements attached to it as well. The idea is really to bring back life to the river banks,” he adds.
The nature of Wessal Capital is itself interesting. Bringing together so many Gulf funds into one vehicle is certainly unusual and perhaps unique, but Senhaji insists this is not simply a case of Gulf money being used to prop up a poorer North African ally, as has been happening in Egypt for example.
“Wessal Capital is the first time in the world that so many sovereign wealth funds have invested together,” he says. “Clearly, economic diplomacy works and there is an element of that, but I think the main reason these investors have come in is the fact that Morocco has a very stable economy.
“These are projects that make sense from a financial perspective, but they also have to make sense from the local development side. We really wanted to avoid the experience of other places around the world of being an arrogant investor, of coming in and saying we’ll build big towers here. So we spent a lot of time working with the local authorities to see what makes sense and we have two very strong concepts.”
Wessal Capital is also looking for its next projects and is eyeing up the potential of other major cities around the country.
“We are going to build a diversified portfolio,” says Senhaji. “We are looking into Tangier because it is a very interesting city with a strong dynamic, but we are also looking at other parts of the Moroccan market.
“In Morocco, each city has its own dynamic, a little bit like in Italy or Spain, so the feel in, say, Marrakech is very different to Tangier. That means economically, it is very diversified and if you are investing in the economy of Casablanca or Tangier, the dynamics are very different.”
In the longer term, Wessal Capital may even venture into other markets around Africa. If that happens, it would fit in with the Moroccan government’s strategy of developing the country as a business and financial hub for the continent. First, however, the firm needs to prove it can make a success of its existing projects.
“Given Morocco’s ambition to be a regional platform, we could see Wessel Capital maybe venturing towards other countries,” says Senhaji. “We have the capacity to do it. The only question is execution.”