Valuing a coworking or flex office space in Morocco: property, operation and method

A cancellable membership is not a lease. Capitalise it as though it were, and the valuation overstates the asset by construction.

1. Flexibility enters the office market

The Moroccan office market — which we track in our Casablanca office rents and yields review — long ran on a single model: one commercial lease, one tenant, years of commitment. Coworking introduces a different product: serviced workspace, billed by the desk, by the office or by the hour, without long commitment. Demand comes from independent professionals and start-ups, but equally from subsidiaries in their set-up phase and from companies seeking to convert a fixed cost into a variable one.

The typical instructions: valuing a building let to a coworking operator, valuing an operation ahead of a sale or a fundraising, advising an owner arbitraging between a conventional lease and flexible operation, or supporting the funding of a site.

2. First distinction: the property, the business, or the hybrid

• The building let to an operator — the analysis remains a property one: a lease, most often governed by the law 49-16 regime for commercial leases, capitalised in line with office market practice. But the strength of the tenant becomes central: a coworking operator carries a model risk — short revenues against a long commitment — and the valuer must probe its financial standing and the reversibility of the floorplate to conventional offices.
• The operation — here the analysis is that of a services business: normalised net trading cash flows, the recurrence of memberships, brand and community. Property value and operating value must never be added together without adjustment.
• The owner-operator — a frequent configuration in this segment: the valuer runs both analyses and articulates the value of the property, on a reconstituted market rent, with the value of the operation, struck after a notional occupancy cost.

3. Flexible revenues: what is actually measured

The raw material of the operating valuation is the management data supplied by the client, over several accounting periods wherever possible:

• The product mix — hot desks, dedicated desks, enclosed private offices, meeting rooms, registered addresses and services. Each line carries its own recurrence: a private office taken by the month by an established SME is steadier than walk-in traffic.
• Occupancy by product type — not a blended figure that hides the divergences: a site can show saturated private offices alongside an empty open space, or the reverse.
• Income per desk and per square metre — the yield indicator of the format, to be set against conventional office rents in the same district. It is the gap between the two that pays — or fails to pay — for the risk and the services.
• Contract duration and renewal — customer lifetime turns legally short contracts into economically recurring flows. That is what separates an established coworking business from a fragile one.

4. The methods: capitalisation, cash flow, notional rent

• For the property — capitalisation of the passing rent, tested against market office rents in the district, along the lines of the income approach we apply in our ten-year DCF valuation of an office building in Hay Riad. The reversibility scenario — a return to conventional offices, with the cost of stripping out asset-specific fit-out — acts as the safeguard.
• For the operation — normalised net trading cash flows, struck after a real or reconstituted occupancy cost and projected on prudent, documented occupancy assumptions. The short histories of the segment call for contrasting scenarios rather than a single trajectory.
• For the owner-operator — the articulation of the two: the notional rent is the hinge between property value and operating value, and it is what prevents double counting.

5. Casablanca and Rabat: location still rules

Coworking does not escape the golden rule of offices: the address. Accessibility, parking, visibility, business environment — the fundamentals that make an office floorplate succeed, and which we set out in our review of the Casablanca office market for institutional investors, govern the occupancy of a flexible space just as firmly. A secondary site does not make up through services what the address fails to give it; conversely, a good address that is poorly operated remains reversible — which is precisely what the reversibility scenario measures.

6. Common pitfalls

• Capitalising flexible turnover as if it were rent — a cancellable membership is not a firm lease; treating it as one overstates value by construction.
• Adding property and business without adjustment — the notional occupancy cost has to act as the hinge, otherwise the same value is counted twice.
• Extrapolating a short history — the segment is young; one full season does not establish recurrence.
• Ignoring reversibility — the scenario of a return to conventional offices, with its costs, is the floor of the analysis; leaving it out strips the report of its safeguard.
• Underrating dependence on the operator — brand, team and community leave with the operator; the value of the building must not absorb what does not belong to it.

7. What the report is for

The sale of a building or of an operation, a fundraising, funding, the arbitrage between a conventional lease and flexible operation, a carrying value in the accounts: the report sets out a scenario-based, documented value capable of standing up in an arm's-length negotiation and in documented discussion between the parties. It is a private valuation, produced to inform decisions. Our reports are prepared by RICS-certified experts and comply with Red Book standards.

A coworking instruction is quoted case by case according to scope — property, operation or both — the size of the site and the timescale. For reference, our valuations start at 3,500 MAD excl. tax for standard assets, with a firm quote within 24 hours and delivery in 5 to 8 days, 48-72 hours on the express service. ReaConsult has been operating since 2019, with more than 5,000 valuations completed, offices in 6 cities and a rating of 4.9/5 across 47 reviews.

Note:this article sets out a valuation methodology compliant with RICS standards (Red Book). The commercial lease regime (law 49-16) and service contracts are governed by the regulations in force and by their own terms — confirm your position with your advisers. A private valuation informs a decision and an arm's-length negotiation. To instruct us, see our contact page or the property blog.