OPCI in Morocco: on track for the first approval…

The Swiss Chamber of Commerce in Morocco organised a round table on the financial vehicle so eagerly awaited by Moroccan investors, namely OPCIs. Chaired by Mr Mehdi Benzaari, President of the CCSM, the meeting brought together various players from the national financial and real estate sphere, namely Ms Ikhlas Mettioui, Director of Savings Management at the AMMC, Mr Noureddine Tahiri, Managing Director of Ajarlnvest, Mr Omar Issadik, Managing Director of Audifisc Maroc, Mr Hakim Cherradi, Managing Director of Immoxia, and Ms Safia Fassi Fihri, lawyer representing the firm BFR & Associés. The objectives? To discuss the principles, workings and opportunities of OPCIs in the country. The CCSM, always attentive to the market, thus took advantage of the occasion and of the presence of representatives of the various parties involved in the project, on the one hand to discuss all the circulars likely to speed up the launch of this new vehicle and, on the other, to encourage investors to take advantage of the opportunities it offers.

Better informing the general public…

One of the main objectives of the meeting was to present OPCIs to certain investors who are not sufficiently informed on the subject, but also to shed more light on the subject for the general public, so that everyone has the same level of information. As defined by Mr Tahiri, OPCIs are “an indirect acquisition of rental property”. As such, and in addition to the range of investments already existing in Morocco (securitisation operations, shares and Undertakings for Collective Investment in Transferable Securities (OPCVM)), they offer considerable advantages. Indeed, the main purpose of this regulated financial instrument, which has a specific legal regime, is the construction or acquisition of buildings intended exclusively for rental. During the round table, Ms Safia Fassi Fihri also went over the forms of OPCI defined by bill no. 70-14. According to her, “OPCIs can take the form of a real estate investment company (SPI). In this case the investors would be shareholders and would have legal personality. The other scenario is the real estate investment fund (FPI), where the investor has no right of control or decision, let alone of intervention, in the management. The company is then managed by an approved management company”. This new financial vehicle therefore makes it possible to boost real estate investment and, more particularly, professional real estate investment. “OPCIs make it easier for investors to access rental property, such as shopping centres, hotel units, office floors…,” argues Mr Hakim Cherradi, before adding that “they will make it possible to inject fresh money into the country’s economy”. They will also allow investors to save safely, with fairly high and significant returns. For it must be said that OPCIs, as Mr Cherradi explained, “represent a source of financing for the construction of buildings, which banks consider too risky”.

…for a successful launch

Morocco is the second country in Africa to adopt OPCIs, after South Africa. This financial vehicle, which exists in more than 30 countries around the world, has generated plenty of positive results in terms of profitable investment. In France, which serves as an example for Morocco in this area, and as Mr Tahiri recalled in his presentation, “OPCIs have grown exponentially, from 6 billion euros in 2008 to nearly 70 billion today”. Aware of this financial strength, Morocco presented a bill in 2014 defining the terms for creating, managing and operating OPCIs in the Kingdom. The bill was adopted in 2016. That said, since then, investors have still been waiting for tax incentives to be defined before starting their activities. Among other steps, a very precise regulatory framework for OPCIs must also be determined, followed by a number of orders and draft decrees concerning the composition of the advisory committee responsible for supporting valuers. In this sense, the round table organised by the CCSM was therefore the right moment to gather the questions, suggestions and proposals of financial executives, consultants and legal professionals in order to come up with prompt alternatives to get OPCIs started in the Kingdom. It was with this in mind that Ms Ikhlas Metttioui stated at the meeting that “OPCIs require a new regulatory framework, and that [they are] studying its implementation. However, the expertise of financial players can always help to define certain rules”. On this occasion, she also wished to point out that “the regulatory arrangements are also being set and that the framework for creating OPCIs, which must receive approval from the Moroccan Capital Market Authority (AMMC), is being defined”. She added: “Given the progress of the various processes, the first approval could certainly be granted during the first quarter of this year.” A reassuring view, shared by Mr Tahiri, who did not fail to confirm this information.

Because the stakes are high!

Indeed, the Ministry of Finance had estimated a stock of assets for the OPCI market of approximately 200 billion dirhams, equivalent to 15% of Morocco’s real estate base. A significant fund, which had aroused the enthusiasm and impatience of financial players regarding this new project. However, not all management companies on the market are eligible to manage OPCIs. Most of them are better suited to managing OPCVMs than OPCIs. As Mr Tahiri indicated in his speech, “AjarInvest is the only operator able to administer the main activities relating to OPCIs”. It should be noted that the company is 60% owned by CDG and 40% by CIH BANK. Another challenge for OPCIs is finding the right investment. This means choosing the right premises and investing in the right logistics so that there is always a rental occupancy rate of close to 60% all year round, so that the fund can generate a return. Once the new regulations have been put in place, OPCIs will be able to invest in office floors, hotel or industrial units, shopping centres… However, as Mr Omar Issadik pointed out, “given that the current provisions are still only theoretical−because no activity has yet started−some final adjustments will certainly be necessary during the roll-out phase in order to achieve positive results that exceed our expectations”!

TESTIMONIALS

This meeting comes at the right time. It shed light on OPCIs, this new financial vehicle that is still unfamiliar to some. More will be needed to further clarify this new form of investment. Because the general public is not sufficiently informed about the advantages of OPCIs. Mr Noureddine Tahiri , Managing Director of Ajarlnvest

It was an excellent opportunity to discuss this new subject, which is eagerly awaited by various market operators! OPCIs require a new regulatory framework, and we are studying its implementation. We therefore all have something to learn from one another. And it is thanks to this kind of debate, which allows us to exchange ideas, that we will be able to identify certain shortcomings in the regulations, which need to be reviewed, completed and clearly defined. In this way, with the various players concerned, we will be able, as regulator, to propose new rules that we had certainly not thought of. We must therefore listen to professionals in this sector, gather their questions and reflect on our side in order to provide them with answers. Ikhlas Mettioui , Director of Savings Management at the AMMC

It was an excellent meeting. An initiative that is fully in keeping with the business context. Given that the law was passed more than a year ago, it is ideal for meetings of this kind to be held to discuss the future of OPCIs in Morocco. And in this respect, the Chamber has fully played its role. Mr Omar Issadik , Managing Director of Audifisc Maroc

Real estate boomed in the 2000s and we saw a meteoric rise until 2008. Then, as you know, around 2009, there was more or less a decline. So OPCIs today offer real business opportunities for investors and savers. And as economists say, “when construction is doing well, everything is doing well!” OPCIs are a genuine financial lever. We therefore welcome the CCSM’s initiative, which encourages their development in Morocco. Mr Hakim Cherradi , Managing Director of Immoxia

The market is eagerly awaiting the start of OPCI activities. The law was promulgated in 2016, but there has still been no follow-up. Implementing decrees have yet to be published, as has the circular of the AMMC, which is the regulatory authority for OPCIs. This kind of meeting is therefore very important for informing the various players. We had guests from all the sectors of activity concerned by this project, which contributed to the richness of the discussions at this round table. Ms Safia Fassi Fihri , lawyer representing the firm BFR & Associés

This was an enriching meeting between financial experts, economic operators, consultants and executives. The subject of OPCIs has generated a great deal of enthusiasm in Morocco, on the one hand for the advantages and opportunities they offer and, on the other, for the positive results recorded in many countries, including France and the USA. Through this round table, the Swiss Chamber of Commerce wanted to promote this fantastic tool, which offers tax advantages and also provides savers with a safe and profitable framework. We hope that the first approval will be ready by the end of this first quarter, because we are convinced that OPCIs are a real investment tool that will help boost the Moroccan economy. Mr Mehdi Benzaari , President of the CCSM