Case study — logistics warehouse Mohammedia (VPGA 5 + DCF)

Location: Mohammedia, Casa-Rabat motorway axis, ~5km from A1 interchange, proximity Mohammedia port. Land: 2.5 hectares (25,000 sqm), individual land title, industrial zoning I3. Building: Grade A logistics warehouse 12,000 sqm storage + 600 sqm offices. Clear height 11.5m, floor load 5 t/sqm, 10 docks at level with hydraulic levellers, ESFR sprinklage, reinforced quartz concrete slab. Tenant: 3PL operator subsidiary of international group, 9-year commercial lease signed 3 years ago, annual IRL indexation, parent company guarantee. Passing rent: MAD 200/sqm/month on 12,000 sqm (consistent with Morocco Grade A 2025 range). Report purpose: CapEx bank financing for activity extension of owner-landlord company.

Asset is leased to a solvent operator on a long lease. Primary method: income approach (IVS 105), declined into Term & Reversion (RICS VPS 3). Cross-checks by comparable (Market Approach) on serviced industrial land and by DRC (VPGA 5) for consistency with new-build replacement cost. Residual method secondary (already built land).

Term phase — passing rent discounted until lease expiry (6 residual years). Annual contract rent: 200 × 12 × 12,000 = MAD 28.8 million/year. IRL indexation hypothesis: 2.5%/year. Applied cap rate reflects flow security (tenant in place, parent guarantee) — on the Moroccan OPCI 6-9% low range, retain 7% hypothesis for the term. Reversion phase — Estimated Rental Value (ERV) discounted from expiry, capitalised in perpetuity. ERV retained: MAD 205/sqm/month (top end of Grade A 2025 range adjusted to site quality and expected growth). Cap rate reversion higher than term to integrate re-letting risk premium: 7.5-8% hypothesis. Gap between passing rent and ERV signals slightly under-rented situation — reversion therefore creates value.

Recent transactions (12-24 months) on comparable warehouses: Casa-Rabat axis, Grade A, 8,000-20,000 sqm, lease signed or operational. Often restricted sample in Morocco — extension to Tanger Med and Atlantic Free Zone Kenitra with documented adjustments (location, applicable tax regime, technical quality). Private transactions between OPCI and industrials are the best basis, accessible via expert network.

New-build replacement cost at equivalent standard: (a) industrial zone land serving cost; (b) Grade A 12,000 sqm warehouse + 600 sqm offices building cost (Moroccan Grade A standards reference MAD 3,500-5,000/sqm depending on specifications); (c) fixed equipment cost (ESFR sprinklage, levellers, racks if any — often off-walls). Depreciation: physical (age 5 years, useful life 30+ years), functional (nothing to report — current Grade A), economic external (consistent with market). DRC result serves as upper bound against which Market Value is arbitrated.

RICS Red Book report presents three results (DCF, comparable, DRC) with their relative weights. For a leased Grade A warehouse, DCF remains primary as it reflects the bien's economic reality as exploited. Comparable confirms order of magnitude. DRC bounds the upper limit and alerts if Market Value exceeds replacement cost — signalling tight market or pricing to reconsider.

Report delivered to client includes: Opening letter and basis of value (IVS 104, Market Value). Asset description: land, building, equipment, photos, layout, lease situation. Market analysis: zone, demand, supply, comparable transactions, sectoral dynamics. Methods applied with detailed hypotheses (rent ERV, term and reversion cap rates, discount rate, indexation). Term & Reversion DCF modelling in annex. Cross-checks (comparable + DRC). Synthesis, retained value, sensitivities (cap rate variation ± 50 bps, ERV ± 5%). Limits and hypotheses under which value is valid. RICS engagement of signatory (qualification, independence, professional secrecy).

Report is enforceable with major Moroccan banks (Attijariwafa Bank, BMCE, BCP, CIH, CFG, Société Générale, Banque Populaire) which will accept the base. For financings above a threshold (variable per bank), an independent supplementary opinion may be requested. Compliance with RICS Red Book Global Standards 2025 and the Moroccan Real Estate Valuation Charter (6th edition 2025) is the condition for report defensibility in credit committee and before any litigation.

• Basis of value (Market Value IVS 104) stated
• Lease analyzed (term, indexation, guarantees)
• ERV benchmarked against market data
• Term and Reversion cap rates differentiated
• Comparable transactions sourced
• DRC computed for cross-check
• Three results reconciled with weights
• Sensitivity analysis included

• Same cap rate used for Term and Reversion
• ERV pegged to passing rent without market check
• Comparable sample limited to listings
• DRC ignored on bespoke components
• No sensitivity analysis presented