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Algeria: Algeria: Real Estate Market Overview 2011

2011/11/26

 Algeria: Real Estate Market Overview 2011

This overview provides highlights of the office, industrial, retail, and residential markets in Algeria.

Office market

Activity in the Algiers office market has tended to focus on certain landmark developments, including ABC and El Qods. However, a major business cluster has recently developed at Bab Ezzouar, near the airport, with a number of buildings currently nearing completion. There is also now an office micromarket in Hydra, the embassy district, which has significant availability. The market is currently oversupplied and future demand is likely to come from companies looking to consolidate operations into better quality space rather than new market entrants.

Retail market

The new €70 million retail mall at Bab Ezzouar, designed and operated by the Swiss-backed group SCCA, has transformed the Algerian retail experience. The mall opened in 2010 and attracts people from a wide radius outside of Algiers to experience a modern shopping mall. It is anchored by local supermarket Cevital and has leisure facilities and retail outlets such as Lacoste, Sony, Nike and Samsonite. SCCA are reportedly seeking to invest a further €80 million into two additional malls in Algeria.

Industrial market

While industrial activity has taken a declining share of economic output in recent years, it still accounts for c.60% of Algeria’s GDP. Despite the state imposing new restrictions on foreign ownership, there may be a resurgence within the sector. Renault and Volkswagen are both reportedly in advanced negotiations with the Algerian authorities to commence car manufacturing in the country. Property in this sector is typified by older general purpose warehousing, with practically no modern high-bay logistics buildings being available.

Residential market

Much of the housing in Algiers is of a relatively high standard, with a considerable %age of the population living in government-built apartments. There are modern, well built villas and apartments to the west and east of the old town of Algiers, situated in secure communities along the bay. However, Hydra remains the prime expatriate and diplomatic area of the city. Future development activity in Algeria is likely to be focused on the lower-mid income market, which currently appears to be undersupplied.

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