The 2030 FIFA World Cup and commercial real estate in Morocco, Spain, and Portugal: Opportunities for institutional investors

The FIFA World Cup 2030, hosted by Morocco, Spain and Portugal, is a major opportunity for investors in the real estate sector. Each of the countries will invest heavily in building, renovating or restructuring its infrastructure to host this global event, which could generate significant economic benefits for the host countries.

This article explores the potential impact of the event on real estate markets in these countries. We analyze the impact of previous World Cups in Qatar (2022), Brazil (2014) and South Africa (2010) on the overall economies of these countries and the impact on real estate, to highlight potential investment opportunities and asset classes to focus on.

 

Economic and infrastructure impact

Hosting a World Cup often requires significant expenditure. And spending often goes over budget, especially when new infrastructure is needed. Germany (2006) managed to recoup its investment, while South Africa (2010) and Brazil (2014) experienced significant losses.

FIFA requires World Cup hosts to have at least seven stadiums, some with a capacity of 80,000, along with security, infrastructure, sustainability, training grounds, transport links, press centers, and fan zones. Countries with existing infrastructure, like Germany, have lower costs, making their World Cups more profitable compared to South Africa and Brazil, which needed significant investment.

By co-hosting the event, Morocco, Spain and Portugal can more easily meet FIFA’s requirements by limiting their investment in infrastructure, while benefiting from the potential economic impact of hosting the event.

The three countries are betting that hosting the World Cup will significantly boost their respective economies through increased tourism, measured infrastructure development (spread across three different countries) and global visibility.

Spain and Portugal are investing heavily in infrastructure improvements. Spain's Santiago Bernabéu stadium recently underwent a USD1.9 billion renovation, and Barcelona's Camp Nou is getting a USD1 billion upgrade. These investments are expected to make these cities more attractive to tourists and businesses.

Spain, with modern stadiums and infrastructure, expects to spend EUR1.43 billion but expects to generate over EUR5 billion in benefits, including boosting GDP and creating over 82,000 jobs.

As for Portugal, the Minister of Parliamentary Affairs, Pedro Duarte, has indicated that there could be “some investment associated” with the FIFA World Cup, but that it would be residual. Portugal invested significantly in new stadiums and other types of infrastructure adjacent to the stadiums in 2004 for the European Championships. So any new investment will be aimed at updating and/or modernizing existing infrastructure. However, the World Cup is expected to have an economic impact on Portugal of over EUR800 million, boosting tourism revenues by 2.3% and creating around 20,000 jobs.

Morocco has announced a MAD42 billion (USD4.4 billion) investment package to upgrade its infrastructure, including the construction of the Grand Stade Hassan II. This investment aims to deliver a USD1.2 billion economic uplift, primarily driven by tourism and infrastructure development.

 

Lessons from Qatar 2022

The International Monetary Fund (IMF) reports that since Qatar was awarded the 2022 FIFA World Cup in 2010, the country’s GDP has consistently grown at an average rate of 4.5% over the 11-year period from 2010 to 2020. Qatar had to build stadiums and infrastructure from scratch. The result: a USD200 billion investment to bring the World Cup to the Middle East by building roads, stadiums and hotels, the highest ever for a World Cup.

The 2022 FIFA World Cup in Qatar provides valuable insight into the potential impact on commercial real estate. Qatar’s real estate sector saw significant growth in the lead-up to the event, with over 5,000 transactions valued at QAR25 billion conducted in 2021 alone. The influx of tourists and expatriates drove demand for residential, commercial, and hospitality properties, leading to increased rental rates and property values.

Qatar’s focus on sustainability and innovation in its infrastructure projects, such as the development of smart cities and green buildings, also played a crucial role in attracting foreign investment. These trends are likely to be mirrored in Morocco, Spain and Portugal as they prepare for the 2030 World Cup.

 

Comparisons with previous World Cups

Brazil 2014: Brazil’s World Cup led to substantial investments in stadiums and urban infrastructure. The event attracted over a million tourists, 95% of whom said they intended to return, and generated around USD13 billion in economic activity. However, the long-term benefits were somewhat mixed, with some stadiums underused post-event. This underscores the need for careful planning to ensure lasting benefits.

South Africa 2010: The 2010 World Cup in South Africa resulted in significant infrastructure upgrades, including new stadiums, airports, and public transport systems. The event boosted tourism and created jobs, but some investments, such as stadiums, faced challenges in finding sustainable post-event uses. This highlights the importance of integrating World Cup infrastructure into broader urban development plans.

 

Investment opportunities

Institutional investors should consider several key asset classes in the commercial real estate sector:

Hospitality and tourism: The expected surge in tourism will drive demand for hotels, resorts, and short-term rental properties. During the 2022 FIFA World Cup, Qatar welcomed approximately 1.4 million international tourists. In contrast, Morocco already attracted around 14 million tourists last year and is targeting 15 million visitors this year. By 2030, Morocco aims to attract 26 million tourists by increasing its hotel capacity by 150,000 new beds to visitors, particularly non-European tourists. With the number of international visitors expected to reach 95 million by 2024, the Spanish tourism industry is laying a solid foundation for continued growth, and this number could be exceeded in 2030 when the World Cup is co-hosted, which could have a very positive impact on the hospitality sector.

Retail, commercial and office spaces: The development of new shopping centers, entertainment venues, and commercial hubs will cater to the needs of tourists and locals alike. Qatar’s experience showed a significant boost in retail and commercial property values due to increased consumer spending. The World Cup will attract international businesses and organizations, increasing demand for modern office spaces. Investors should look for opportunities in major cities like Madrid, Lisbon, and Casablanca.

Infrastructure Projects: Investments in transportation, stadiums, and other infrastructure projects will create long-term value. The renovation of iconic stadiums in Spain and the construction of a new stadium and new facilities in Morocco are prime examples. Upon completion, the Benslimane Arena is set to become the largest stadium globally, boasting a capacity exceeding 115,000. The construction of this monumental project is projected to cost approximately MAD5 billion (USD520 million).

The 2030 FIFA World Cup is a compelling opportunity for investors to capitalize on the anticipated economic and infrastructure developments in Morocco, Spain and Portugal. By focusing on key asset classes such as hospitality, retail, office spaces, and infrastructure projects, investors can position themselves to benefit from the long-term growth and increased demand in these markets.