A new mixed-use project called "Fez City Centre" was inaugurated by King Mohammed VI in the city of Fez on March 11, marking an important step in the ancient capital city's economic and urban development. The project will cover 32ha of land, for a total investment of DH5bn, and is expected to create 4500 temporary and 500 permanent jobs.

"Fez City Centre" will be a public-private venture involving the local authorities; Al Omrane, a new state-run public housing group; and Addoha Group, a private company listed on the Casablanca stock exchange. Both companies initially operated mainly in affordable housing. Al Omrane, for instance, is overseeing the construction of five new towns around the country with the aim of housing a number of low-income families. Addoha Group, which will provide DH2.33bn in financing for the "Fez City Centre".

The development will consist of 408,500 sq metres of new apartment buildings and 24 villas, in addition to the construction of a five-star hotel, a conference centre for 3000 people and 83,000 sq metres of upscale commercial space aiming to attract international brands as tenants. New parking is also planned to meet the greater volumes of traffic generated by the new development.

The green element of "Fez City Centre" will involve the area that formerly functioned as the Jnane Moulay El Kamel hippodrome complex. This 8.5ha space will be redeveloped to create an ecological natural space for public use.

While the project will certainly bolster the city's role in Morocco's tourism sector, the strategic motivations behind "Fez City Centre" are not limited to tourism. By choosing to pursue an urban development in Morocco's third largest city, the project is also intended to help transform Fez into a more dynamic commercial centre and destination for investment within the region as well as nationwide.

The inauguration of "Fez City Centre" coincided with the beginning of a DH140m infrastructure project to expand the 72km roadway linking Fez with Sefrou. The enhanced road Fez-Sefrou road connection represents only one component of Morocco's second national programme for rural roads, which was launched in 2005 and under which the Fez-Boulemane region has received 534km of new roads totalling DH353m. An additional DH411.7m is expected for the 2008-2011 period, according to local press. The second national programme, which will increase accessibility to rural populations to 86% by 2015 from the level of 67% in 2005, is expected to stimulate the Fez region's economy by reducing logistics constraints and costs.

The city's economic results in 2007 show promising prospects. According to figures published by the Centre for Regional Investment, 2327 applications were made over the course of 2007 to create private companies in the region of Fez, representing a 10% increase on the previous year. By the end of 2007, 1000 new companies were created, representing a 36% rise on 2006. Total investment for the Fez region amounted to DH9bn in 2007, with tourism representing the vast majority with a 78% share.

This article was provided courtesy of Oxford Business Group, a leading publisher of economic and political intelligence on the emerging markets of South East Europe, South East Asia, North Africa, the Levant and the Gulf.