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Sun, sand and no inheritance tax fuel property boom in Mauritius

WITH its long stretches of white-sand beaches, blue lagoons and lack of inheritance tax, the Indian Ocean island of Mauritius has long been a beloved destination for high-net-worth individuals in search of seclusion.

Now, a new player is upping the ante for leisure-seekers. Kerzner International, developer of the Atlantis The Royal — the ultra-luxury Dubai hotel that recently hosted Beyoncé in a $100,000-a-night suite — is investing about $100 million in 52 ultra-exclusive villas on Mauritius’ eastern coast. Prices for properties on the former nine-hole golf course range from $2.8 million for a two-bedroom unit to $14.4 million for a seafront villa.

Interest has been robust, with more than 80% of all available units in final negotiations, the developer said in January. Only “a few units” with the four-bedroom configuration have yet to be sold.

Property is a key source of direct investment in Mauritius, which relies mostly on tourism and manufacturing exports for foreign currency. Between 2014 and mid-2022, foreign direct investment in high-end property totaled 63.3 billion rupees ($1.368 billion), or roughly 40% of all inflow, according to the Bank of Mauritius. As real estate has boomed, that number has been steadily ballooning. Last year, the finance ministry projected that property sales helped push inflows to 25 billion rupees.

Located 1,200 miles off the eastern coast of Africa and a four-hour flight from Johannesburg, the former Dutch, French and British colony has been a hotspot for high-end tourists for 70 years, although foreigners were banned from buying property in Mauritius until 2002. That year, the government rolled out the Integrated Resort Scheme, which offered residency to any foreign buyer who spent at least $375,000 on a luxury residence or “development scheme.”   

The first investor to bite was Medine Ltd., which owns 10,000 hectares of land in western Mauritius and set up the Tamarina Golf Estate and Beach Club. The Tamarina now includes 119 villas, a restaurant, a boutique hotel and an 18-hole golf course, and is, according to Joel Bruneau, managing director for the property cluster, “the one fully sold and fully completed IRS estate on the island.”

Among the newer entrants in the market is Heritage Villas Valriche, which sold its first villa in the southwest of the island in 2007 and is now in its final phase of expansion with the construction of 46 new units. In total, said CEO Anton de Waal, the project has attracted 13 billion rupees in foreign direct investment.

More than two decades on, foreign buyers play an outsized role in the local economy, drawn by breathtaking natural vistas, strong airline connections and a favorable tax regime. Property sales have fueled the tourism and hospitality sector, which employs about 100,000 people — or 19%  of the workforce — in this 1.26-million-person country, where average minimum wage is 13,075 rupees ($284) a month, and youth unemployment was nearly 25% in the third quarter of last year.

While France has historically been the main source of buyers, Jyoti Jeetun, CEO of the privately held Mont Choisy Group, believes that may not be the case for long. “Over the last few years, we have seen growing numbers of South Africans looking to invest or relocate to Mauritius,” she said, adding that social unrest could be a reason. Mr. De Waal, of Heritage Villas Valriche, said that his clientele is made up of “about 30% French, 30% South African, 15% from the UK.” The rest is a mix, he added, “including five Mauritians.”

As demand for luxury villas in Mauritius has grown, it has kicked off something of an amenities arms race, said Arnaud Lagesse, chief executive officer of IBL Ltd. And with new entrants like Kerzner showing up, property developers must be “even more creative in their offerings.”

Villa Charlotte, a $10.5-million property located in the Anahita estate on the east coast, showcases the new heights of luxury on offer. In addition to the main residence, the 905-square-meter six-bedroom estate features staff accommodations, an entrance garden and “treatment” suite arrayed around a 25-meter infinity pool fringed with palm trees. Marble was flown in from Italy for the master bathroom, beamed David Rich-Jones, CEO and founder of Richstone Properties, which owns the residence. The villa, he added, reflects “an obsession with details and design.”

Only a few minutes away by golf cart is the well-tended Tamarina course. One morning at the end of November, managers rushed to allocate carts to growing line of players, who sheltered at the restaurant to avoid the light summer drizzle.

Professionally designed golf courses, which are scattered across Mauritius, are another draw for the international elite. The Ile Aux Cerfs Golf Club, planned by two-time Masters champion Bernhard Langer, is located on a private islet of the same name off the coast of the main island. Anahita Golf, by prizewinning South African golfer Ernie Els, is in the seaside village of Trou d’Eau Douce. And Peter Matkovich signed off on the Mont Choisy Le Golf course in the north and Heritage Villas Valriche’s Le Chateau Golf Course in the village of Bel Ombre.

Thierry Vallet, interim CEO of AfrAsia Bank, noted that golf courses are a win-win for both developers and investors. For the former, they offer “unmatched global visibility” by hosting tournaments — the winner of last year’s AfrAsia Bank Mauritius Open went home with 170,000 euros — while for the latter, living in a development attached to a golf course brings perks such as security services and landscaped views.

While developers are putting increasingly lavish properties up for sale, the market is also expanding, said Mr. Lagesse. “Even though we still see that there is a market for high end villas — over $1 million — we have noticed that demand has moved toward more practical and safe investments in what we can define as a mid-range market between $300,000 and $750,000,” he said. “In this segment, the market is booming,” he added, citing sales data for the Azuri Ocean & Golf Village, a smart city development on the northeastern coast of the island.

This has been true despite the usual challenges of island living — earlier this month, a cyclone disrupted golf schedules and flights in and out of the island. Nonetheless, as Jeetun of the Mont Choisy Group, put it, “Mauritius has reinforced and broadened its position as a world class lifestyle destination.” — Bloomberg

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