Valuing a multi-storey or underground car park in Morocco — the income approach

A structured car park — a multi-storey deck or an underground facility — is neither a building to be measured nor a collection of parking spaces to be added up. It is an income-producing asset whose value sits in the operating cash flows (transient receipts, season tickets, turnover) and in the legal status of the land beneath it: freehold, leasehold, or a fixed-term concession. This guide sets out the income approach, the DCF bounded by the concession term, the analysis of the underlying site, and the traps peculiar to a quiet asset class that institutional investors watch closely.

A quiet asset class that behaves like infrastructure

In the dense centres of Casablanca, Rabat, Tangier and Marrakech, structured parking has become an urban question in its own right: underground facilities beneath public squares and office buildings, multi-storey decks, and the car parks attached to shopping centres, hotels, railway stations and hospitals. Ownership and operating models vary widely — direct municipal operation, delegated management, concession, or private operation of a freehold — and they change, radically, the nature of what is actually being valued.

The engagements we see follow a familiar pattern: the sale of a facility or of a concession right; financing secured on the cash flows; the treatment of the parking element within the valuation of a larger scheme (a mall, a hotel, an office building); and the arbitrage between continued operation and redevelopment of the underlying site. For an international reader, one Moroccan specificity matters from the outset: a titre foncier — the registered land title issued under the Torrens-style land registration system — is the document that establishes ownership of the land. Where the asset sits on a concession, no such title passes to the operator, and that single fact reshapes the entire valuation.

Why “price per space × number of spaces” is a dead end

The instinct to multiply the price of a condominium parking space by the number of bays in a structure produces a figure that is attractive and wrong. A single space in a residential building is sold one at a time, to private individuals, in a residential micro-market. A facility with several hundred bays is an operating business: nobody buys four hundred spaces one by one, and the value of the whole depends on its capacity to generate net cash flow, not on the theoretical sum of its units. Two further realities are invisible to the arithmetic:

• The legal status of the land. A facility held under a concession contains no land to sell; only the right to operate has value.
• Diseconomies the single space never faces. A large facility carries heavy fixed costs — staffing, security, ventilation, equipment maintenance — that simply do not exist for an isolated bay in a residential basement.

The correct starting point is therefore the same one applied to any income asset: normalise the earnings, then decide whether they are capitalised or projected. The logic is the one we set out for regional shopping centres, transposed to an asset whose customers pay by the hour.

The income approach: reading the operation

The valuation begins with operating data supplied by the client, normalised across several financial years rather than taken from a single flattering period:

• Income structure. Transient hourly receipts (turnover business), monthly season tickets, contracts with neighbouring traffic generators — corporates, hotels, clinics — and ancillary services such as valet parking or car washing.
• Occupancy and turnover. Occupancy at peak and off-peak hours, on weekdays and at weekends; and the turnover rate of the transient bays. A facility full of season-ticket holders and a facility with high transient turnover do not have the same income profile, nor the same risk profile: the first is stable but tariff-constrained, the second is more volatile but reprices faster.
• The tariff schedule. Its level, its history of increases, and any regulatory ceiling — which is common where the facility is operated under delegation or concession.
• Operating costs. Staff, energy and lighting, maintenance of the barrier equipment, ventilation and fire-safety systems, insurance, and fees payable to a grantor where applicable.

The normalised net cash flow is then either capitalised — where the operation is stabilised and the interest is freehold — or projected through a discounted cash flow where there is a lease-up period, a programme of works, or a concession. On the choice of capitalisation rate, the evidence has to be argued rather than asserted; our Moroccan cap rate survey explains how yield evidence is assembled and adjusted. The report presents sensitivities on occupancy and tariffs rather than a single point figure — an asset whose revenue is measured in hours does not deserve the false precision of one number.

The concession: a DCF bounded by the contract

Many urban facilities in Morocco are operated under a concession or a delegated management agreement: the local authority or grantor retains ownership of the land and of the structure, while the operator holds a fixed-term right to operate in exchange for fees and obligations. When that is the position, the valuation changes in kind, not merely in degree:

• A bounded horizon. The DCF runs to the residual expiry of the contract, with no freehold terminal value: at expiry the facility reverts to the grantor on the agreed terms.
• Fees and obligations. Fixed or turnover-linked fees, maintenance duties, equipment renewal, sometimes committed capital expenditure, and tariff regulation — all of which are read in the contract itself and its amendments, not inferred from market practice.
• Handback conditions. The required condition on return, the treatment of unamortised investment and any compensation payable: these clauses bear directly on the end-of-contract cash flows and are routinely overlooked.
• Renewal risk. Renewal is never a given. The valuer treats it as a scenario, explicitly and separately, never as an implicit assumption buried in the model.

Confusing the value of a concession right with the value of a freehold is the gravest error available on this asset class, and it does not produce a small discrepancy — it produces a figure of an entirely different order. The discipline required is the same one that governs any interest defined by a contract rather than by a title: value the interest you actually hold, for as long as you actually hold it. Readers who work with leased assets will recognise the reasoning from our note on term and reversion for over-rented and under-rented property.

The underlying land: the highest and best use test

Where the facility is held freehold — an older multi-storey deck, a structured surface car park — the real question is sometimes elsewhere entirely: what is the site worth for another use? In a central location, developable land may be worth considerably more as offices, residential or retail than it is worth in continued parking use, depending on the applicable zoning. Anyone testing that proposition in Casablanca should read our analysis of the Casablanca office market alongside the parking numbers.

Three filters, in order

The highest and best use analysis passes the site through three successive filters. Legal permissibility: what the zoning plan, easements and title actually allow — the question addressed in our guide to land valuation, zoning and buildable potential. Physical feasibility: demolition of an existing structure, ground conditions, plot configuration and access. Financial rationality: the alternative-use value, net of demolition and development costs, must exceed the value in continued operation — otherwise the parking use stands. Conversely, a modern facility, well located opposite a durable traffic generator, is worth what its income says it is worth, and the land question is academic.

Risk factors to document

• Dependence on a single traffic generator. A hospital, a station, a shopping centre, a government building: if the generator closes or relocates, receipts collapse. The report identifies that dependence explicitly and tests it as a sensitivity rather than mentioning it in passing.
• Urban mobility policy. Pedestrianisation, on-street parking charges, new public transport: municipal choices move parking demand in one direction or the other, and they change faster than the physical asset does.
• Informal competition. On-street parking and unstructured provision exert genuine competitive pressure on the tariffs a facility can realistically charge — a point foreign investors regularly underestimate in Moroccan city centres.
• Structural condition. Waterproofing, carbonation of the concrete, ventilation and fire safety. Structures age, and structural repair is expensive; the cost is deducted from the cash flows, not treated as a footnote.
• Upgrade capital expenditure. Automated barriers and payment, bay-guidance systems, electric vehicle charging points: increasingly expected by users and operators alike, and to be built into the cash flow plan.

What the valuer needs from you

• Legal. The land title (titre foncier) or the concession/delegation agreement with all amendments, operating authorisations, and evidence of safety compliance.
• Operational. Income by segment across several financial years, occupancy and turnover statistics, the tariff schedule and its history, and a detailed cost breakdown.
• Technical. Plans, the number and configuration of bays, structural condition, equipment and its age, works carried out and works foreseen.
• Environment. Traffic generators, competing supply, and any urban development project capable of shifting demand.

What the report is for

Sale of a facility or of a concession right, financing secured on the cash flows, portfolio valuation, the arbitrage between continued operation and redevelopment, or preparation for a negotiation with a grantor: the report sets out a reasoned, scenario-tested value, suitable for amicable negotiation and adversarial discussion. It is a private valuation; where a matter proceeds to litigation, the expert is appointed by the judge. Our reports are prepared by RICS-certified valuers and are compliant with RICS Red Book Global Standards.

On fees: this is a specialised asset, so the engagement is quoted individually according to the size of the facility, the legal framework and the purpose. As a reference point, our valuations start from MAD 3,500 excluding tax for standard assets, with a quotation within 24 hours. ReaConsult was founded in 2019, operates across six Moroccan cities, has delivered more than 5,000 valuations at a rate of over 1,000 a year, and holds 4.9/5 from 47 Google reviews. Questions of planning permission, concession law and contractual interpretation should be put to your lawyer and to the competent authority; our role is the valuation. Send us the brief and we will tell you what data we need.