EBRD partners with Label'Vie to support modern retail in Morocco

By Nibal Zgheib

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€45 million equity investment in Vecteur LV, a subsidiary of Label’Vie

The European Bank for Reconstruction and Development (EBRD) is supporting the development of a modern retail infrastructure in Morocco by acquiring an equity stake of €45 million in Vecteur LV (VLV).

VLV is a subsidiary of Label’Vie, one of the leading food retailers and the exclusive Carrefour franchisee in Morocco. VLV has been used by Label’Vie as its real estate platform to develop its supermarkets and the associated retail galleries.

This transaction, which is expected to be the first among a series of similar capital increases, should allow Label’Vie to accelerate its expansion across the different regions of Morocco and prepare VLV to become a potential REIT (Real Estate Investment Trust) once the legal and regulatory framework will be in place.

Claudia Pendred, EBRD Director, Property and Tourism, said: “We are delighted to partner with a strong local player such as Label’Vie to take part in the expansion of the retail sector in Morocco. This equity investment will contribute to the development of a modern, sustainable and energy-efficient retail infrastructure, strengthening the country’s growth and creating new job opportunities, including in the regions.”

“This investment is a showcase of the EBRD’s strategy in Morocco to promote innovative financing structures and capital market development by supporting investments with a strong demonstration effect to deepen market liquidity and develop a legal and regulatory framework for the introduction of REITs”, added Laurent Chabrier, EBRD Director for Morocco.

Zouhair Bennani, Label’Vie’s CEO, said: “We are very pleased to welcome EBRD as the first equity partner in Vecteur LV. This transaction is a milestone for Label’Vie’s plan to accelerate its growth and also maximise the real estate value of its assets. VLV is now set to start a new era of expansion and our role, alongside EBRD, will be to support the company in its path to become a major real estate vehicle in Morocco.”

VLV and Label’Vie will also benefit from EBRD technical assistance. It will be provided under the regional framework “Sustainable Energy Support for Built Environment Projects” to help identify and assess energy and resource efficiency opportunities. The Bank will support the introduction of a more efficient use of energy and water, waste minimisation and recycling to the Moroccan retail sector, targeting energy savings of up to 25%. Technical assistance has also been provided to support the local authorities for the development of the legal and regulatory framework for REITs.

The retail sector represents a significant part of the Moroccan economy, contributing 11 per cent to the country’s GDP and providing 1.4 million jobs. However, modern facilities account for only 15 per cent of the total retail market, while demand is increasing as a result of a growing middle-class population and fast urbanisation.

The Bank has been investing in Morocco since 2012. To date, the Bank has financed €400 million in 18 projects across the country, in addition to €130 million of trade-facilitation credit lines with local banks. The EBRD has also provided technical assistance support to more than 175 local SMEs (small and medium enterprises).

Label’Vie is a leading food retailer in Morocco with a market share of ca. 30%, and is the exclusive franchisee of Carrefour. Label’Vie is listed on the Casablanca Stock Exchange and operates a gross leasable area of 150,000 sqm in 22 cities, through 63 stores under three distinct brands (Carrefour Market supermarkets, Carrefour hypermarkets, and Atacadao hypercash stores).

Vecteur LV (VLV) is a real estate vehicle wholly-owned by Label’Vie to develop and manage mixed-use assets in Morocco. VLV owns 15 operating supermarkets and the associated retail galleries with a total gross leasable area of ca. 81,000 square metres.

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