The Indian Ocean island of Mauritius is the latest offshore property market to attract international attention and it’s one which South Africans may feel more confident about than, say, Croatia or Panama, which are currently being marketed worldwide. Tropical, small, friendly and both English- and French-speaking, the island’s pristine beaches, warm seas, luxury hotels, plantation houses and quaint markets have long been enjoyed by South Africans.

Business hub of the Indian Ocean

Historically, the main source of income for the island was sugar. Plantations were founded at least a century ago and for generations the island lived comfortably off the income from this crop. But, following the collapse of the sugar market, the government embarked on an ambitious plan to become the business hub of the Indian Ocean. Mauritius is successfully attracting new business in banking, insurance, fund and asset management and it is actively pursuing technology-based business.

The Mauritian economy is booming and registered GDP growth of 5.6 percent in 2007. Private investment as a ratio of GDP stands at 18 percent, its highest level in years. Now diversified, its economy has seen active industrial, financial and tourist sectors replacing sugar exports. It has the second highest gross domestic product per capita in Africa, with annual growth of around five to six percent a year. Infrastructure has been improved considerably since South African businessman Sol Kerzner brought South African holiday makers to the island when he opened the St Geran Hotel about 40 years ago. Attracting foreign investment has already paid off, with over 9000 foreign entities having bases or branches there. France is the major trading partner, attesting to the close ties between the two countries. While the French made up more than half the island’s holiday visitors last year, South Africans accounted for seven percent, according to government statistics. English is the official language and is spoken in all the commercial and tourist areas, though Creole French is the widely spoken mother tongue.

Duty-free by 2010

The plan is for Mauritius to become a duty-free island by 2010, giving Hong Kong and Singapore a run for their shopping-tourism money. The government hopes that planned tax-free incentives and duty-free status will add to the attraction for international property investors. Mauritius belongs to all the international bodies for the area, including the SADC, La Francophonie (French-speaking countries) and the British Commonwealth. But the government has been very careful about opening the island to acquisitive foreigners. Now, for the first time since its independence, there are two schemes through which foreigners may buy property on the island.

The Real Estate Scheme (RES) allows small landowners to develop freehold land of no more than 10 hectares ‘for sale mainly to noncitizens’, according to the Mauritian Board of Investment (BOI). These developments can incorporate commercial and leisure facilities as well as residential units. Property in a RES can be bought by foreign nationals, companies and trusts, but no residency is offered to foreigners buying into a RES. To acquire such property, prospective buyers must send an application to the BOI (a processing fee of R2900 applies). The purchase of property in a RES would suit holidaymakers who have no intention of settling in Mauritius.

The other scheme offered by the Mauritian government is the Integrated Resort Scheme (IRS), a method of using the now less-profitable sugar estates to create new wealth. The IRS developments contain only luxury homes with a stipulated minimum value of just under R4-million in controlled projects. High rises are forbidden and the minimum plot size will prevent overcrowding. Many are planned around golf courses, tennis clubs and marinas. An application for a residence permit is made at the same time as purchasing such a property and associated costs are usually incorporated in the selling price. A map of the island shows dozens of proposed schemes, not all of which are expected to come to fruition. Currently there are 10 investment projects that have been granted an IRS certificate, while another five ventures have received their letter of approval and are waiting for the certificates.

This will mean that in addition to the current IRS developments, a total of 3727 units will be developed in the next five years. The final number will depend on government approval rather than demand or finance.

Completely sold out in just six hours

Marketing the first developments was delayed to ensure quality as maintenance, waste disposal, security and provision of facilities are all centralised and provided by the developer of an IRS. But the first two, Tamarina and Anahita, sold briskly from the first day. Nicolas Vaudin, general manager of Ciel Properties, developers of Anahita, said it took four years to get the resort off the ground because the government wanted to ensure the project’s quality. Anahita sold out the first phase of 70 homes in just six hours.

Sherri Motazed, director of Playground Real Estate Sales of Port Louis, the sole marketers of the Anahita project, said the selling price of the first phase ranged from R5-million to R7.2-million per unit, but second phase houses cost between R13-million and R46-million. The estate includes a Four Seasons Hotel — the first to be launched in Africa — an 18-hole Ernie Els signature golf course, restaurants and boutiques. Its villas are maintained by the hotel and can either be used by owners or pooled to derive rental income. The resort covers 213 hectares on six kilometres of the island’s east coast. Sixty of the hotel’s 90 suites are on a private island, connected by a footbridge.

Pam Golding Properties’ projects division has been appointed exclusive marketers of The River Club, a premier golf and beach resort. Prior to the official launch of The River Club, 36 reservations had already been placed via PGP, with interested buyers mainly from South Africa. The River Club is located on the north-west coast of the island, between the capital Port Louis and the popular tourist haven of Grand Baie. It comprises 337 luxury villas, a championship golf course, five-star hotel, beach club, conferencing facilities, boathouse, children’s entertainment centre, tennis courts and state-of-the-art health and wellness spa. The purchase options incorporate golf and river villas, launched in phase one, and hotel suites and indigenous forest lodges to be marketed in phase two. The launch prices range from R5.1-million for the golf villas to R13-million for the river villas. All homeowners will receive free membership of the golf course and enjoy all the benefits of the five-star amenities of the hotel and beach club. On the south west side of the island, 288 villas and a five-star hotel are going up at another of the first approved IRS developments, Villas Valriche. Adjoining the Black River Gorge National Park, it offers a choice from 22 villa designs by award-winning architect JF Adam, which is more than most IRS developments give. The completion of the first 30 villas is expected end-2008. The first phase is selling well, with the second phase soon to open and a second championship golf course planned.

The Elan Group’s IRS scheme entails a partnership with the largest construction company in Mauritius to launch Domaine Bonaventure, a village within an estate on the west coast of Mauritius, 10 kilometres from Port Louis. Domaine Bonaventure, comprising 573 villas, 150 apartments and 32 maisonettes, will be practically self-sufficient, with owners enjoying the benefits of an international private school, a day clinic, a commercial and retail complex, sport and recreational facilities, restaurants and bars. Conference facilities, a retirement village and a rental pool scheme are also planned for Domaine Bonaventure.

Club Med is building 40 villas on a 12-hectare stretch of land adjacent to the Village de La Plantation d’Albion on the western side of the island. Owners can make use of their property six weeks per year and rent them out through Club Med. Purchase prices range from R11.4-million to R22.2-million.

It’s no surprise that it’s not just the RES holiday-makers who are eyeing investment property here. The island is a four-hour flight away and has just a two-hour time-zone difference, which makes it feasible for South Africans to conduct business from Mauritius. Another asset for business travellers is that 60 percent of the island is a wireless hotspot. With an SADC property allowance, no capital gains tax or inheritance tax, no exchange controls and a 15 percent flat tax rate for corporates and individuals, Mauritius may well be an investor’s paradise.