It's rare for Mark Mobius to recommend real estate, making his interest in Douja Promotion Groupe Addoha notable. The firm has a strong market position, holding 16% of Morocco's market share. It delivered over 20,000 housing units annually in the past decade, focusing on affordable housing through its Habitat brand. Addoha's expansion into Senegal and Ivory Coast, along with its robust pipeline and strategic alignment with government housing initiatives, highlights its potential and appeal to investors.
Mark Mobius, a prominent emerging market investor, has recently shown interest in the Moroccan real estate firm Douja Promotion Groupe Addoha. His interest is driven by several factors, including the firm's strong market position, expansion plans, and overall optimism about Morocco's growth prospects.
Douja Promotion Groupe Addoha is one of the largest real estate developers in Morocco, holding a market share of approximately 16% in 2023. The company boasts a robust portfolio, encompassing residential, commercial, and industrial developments. Over the past decade, it has delivered over 20,000 housing units annually, with its "Habitat" brand leading the affordable housing segment.
Founded in 1988, the firm now has a market cap of approximately $1.3 billion and employs around 459 people. The company's share price has increased by 221.8% over the past year. Mark Mobius began recommending the stock in 2023.
Mark Mobius Rarely Recommends Real Estate Companies
Most recommendations from the "Indiana Jones of the investment world" focus on technology, manufacturing, and consumer goods investments, not real estate. Therefore, it's interesting to understand what likely made Douja Promotion Groupe Addoha stand out to the veteran investor.
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Market Position and Growth
Douja Promotion Groupe Addoha is one of Morocco's leading real estate developers with a robust pipeline and plans to develop over 10,000 housing units annually. Most of the new units will be domestic, but it does have international ambitions and is currently developing a 1,200-housing project in Senegal. Additionally, a project in Ivory Coast involved the construction of a $171.87 million housing development, with $27.19 million financed by the International Finance Corporation (IFC).
Financial Performance and Low Debt
The company has shown both resilience and growth over the years with revenues reaching MAD 2.25 billion (i.e., $220 million) in 2023 and a net profit margin of 7.1%. Moreover, Addoha has made significant strides in reducing its debt, which stood at MAD 9.5 billion (i.e., $1 billion) in 2023, down from MAD 10 billion (i.e., $1.05 billion) in 2022 and MAD 12 billion (i.e., $1.26 billion) in 2020.
Focused and Scalable Business Model
Douja Promotion Groupe Addoha's focus on affordable housing addresses a critical market need in Morocco. The country currently has a housing deficit of around 400,000 units, an improvement from the 1.2 million deficit in 2000. Addoha has consistently delivered over 20,000 housing units annually, showcasing its capacity to meet a significant portion of the housing demand. Its Habitat brand is scalable and priced to appeal to a wide range of consumers, aligning perfectly with the government's social housing initiatives and benefiting from various incentives such as tax exemptions and subsidies. The ability to access and optimize these benefits is a significant advantage, and something new firms must learn if they hope to compete.
Morocco Sentiment is Upbeat
Investor sentiment for Morocco is generally positive, and Douja Promotion Groupe Addoha's strengths capitalize on several of these factors, including a growing urban population expanding at a rate of approximately 2.8% per year.
