A new wave of wealthy South Africans are apparently looking to relocate to the sunny shores of Mauritius as the Indian Ocean island entrenches its reputation as a thriving business and tourist hub.
An estimated 280 SA millionaires — those with investable assets of more than $1m — have moved to the island since 2007, according to market research group New World Wealth. The number is expected to increase significantly as more property development schemes (PDS) are brought to the market.
The big attraction of the PDS programme, which is governed by Mauritian legislation, is that foreigners who buy a property in these dedicated, resort-type developments for more than $500,000 (R7.29m) qualify for permanent residency. If the property is valued at less than $500,000, buyers can obtain a residency permit of up to 10 years. Prices typically vary from $230,000 to $1.3m.
At least a dozen PDS projects are under construction or in the pipeline.
Pam Golding Properties is marketing buying opportunities in three schemes: Mont Choisy Le Parc Golf & Beach Estate and Ki Resort Apartments & Villas, both near the popular northern coastal town of Grand Baie, and Akasha Villas in Tamarin, on the west coast.
Pam Golding Mauritius director Richard Haller says growing demand for Mauritian real estate among SA buyers has been underpinned by a strong rand hedge proposition. "The property market trades in US dollars, euro and Mauritian rupee. The latter is an exceptionally stable currency."
The ability to obtain permanent residency for parents, and for children under 24 years, is another major incentive. Moreover, the continued development of the island’s business and tourism infrastructure has boosted its rating as a permanent relocation and retirement destination.
There is no capital gains or inheritance tax, income and corporate tax are at a minimum of 15%, dividends are tax free and there’s are no exchange controls
— Norbert Koenig
Haller says the island is attracting a growing community of expats not only from SA but also from France and other European countries, which has created an interesting, multicultural community.
According to Economic Development Board Mauritius, SA investors represented 27% of all foreign property buyers up to 2016, with the French at 50%. But based on a recent spike in property sales to SA buyers, Haller believes South Africans now account for about 35% of all PDS sales.
At Mont Choisy, where the average price tag is a cool $1m, 30% of the buyers to date are from SA, 55% are from France, and the remaining 15% are a mix of Swiss, Belgian, British and Irish investors.
Haller says investors who have already claimed their stake in the Mauritian property market are earning healthy returns. "A golf villa at Mont Choisy, which was bought in 2015 when the resort was launched, was recently resold for €3.5m, which represents capital growth of over 60% in four years," he says.
The first two phases at Mont Choisy, comprising 210 units, are sold out and completed. The third phase will introduce another 214 apartments, penthouses and standalone villas to the market.
Haller says Mont Choisy’s location on Grand Baie’s doorstep is a key attraction. "Nightlife, eateries, shopping, water sports and leisure activities are just a short walk away. This area is also protected from the southwest winds and rains that affect the rest of the island, and the capital city of Port Louis is a 20-minute drive away."
A few kilometres down the Grand Baie drag, developer Red4 has just launched the next phase of St Antoine Private Residence, a seafront resort of 100 apartments and penthouses. The first phase sold out within 16 months.
Red4 director Norbert Koenig says buyers in St Antoine’s first phase are mostly South Africans, as the development was initially configured around the demands of the SA market. The second phase is expected to attract more European buyers.
Koenig says Mauritius offers myriad benefits to investors. "Besides permanent residency, there is no capital gains or inheritance tax, income and corporate tax are at a minimum of 15%, dividends are tax free and there are no exchange controls.
Seeff Mauritius will be on an SA roadshow later this month to showcase buying opportunities in Azuri, a PDS resort on the northeast coast of the island. Prices for apartments, penthouses and standalone villas range from R8.3m to R21.5m.
The company is also marketing Rockview, a small, exclusive development near Grand Baie with an average price tag of R13m for a standalone villa with its own pool, as well as Nautila, also near Grand Baie, at La Pointe aux Canonniers. Three-bedroom units are priced at about R6.135m.
Seeff Mauritius licensee Theo Pietersen confirms that there has been a noticeable uptick in inquiries from SA property buyers in recent months. Eskom’s load-shedding woes, coupled with lingering political and economic uncertainty, have no doubt supported the renewed search for "safe haven" investment and relocation destinations. And it’s not hard to understand why the island is top of mind for many.
"Mauritius now boasts top-class infrastructure, including an excellent banking sector, strong economic growth and a favourable investment and tax climate. It is regarded as one of the easiest places to do business," says Pietersen.
Property values have held up well, with developments aimed at foreign buyers achieving average price growth of 30%-40% over the past five years, he says. Mortgage finance is available at interest rates of 7%-9%, but buyers are expected to put down 40% cash deposits.
Pietersen says there’s also increased potential to earn a decent income return on residential units in PDS resorts, given the surge in tourism to Mauritius in recent years.
The price of property developments aimed at foreign buyers have grown 30%-40% on average over the past five years
— What it means
Figures from international real estate advisory firm JLL show that tourist arrivals increased about 35% in the past four years — from about 1-million in 2014 to 1.35-million in 2018.
That follows fairly flat growth in the preceding four years.
The surge in tourist arrivals has boosted hotel occupancies and revenues. Revenue per available room was up 43% between 2014 and 2018, while average occupancies rose from about 65% to 80% over the same period.
Last year, the biggest proportion of visitors to Mauritius came from France (21%), followed by the UK (11%), Germany (10%) and SA (9%).
Xander Nijnens, executive vice-president of JLL Hotels & Hospitality group, cites improved air connectivity to Mauritius from Europe and the Middle East as well as the island’s value proposition as key reasons for the strong growth in tourist arrivals. He says average room rates in Mauritius are $220 a night, which is half what one would pay for a night in the Seychelles, and a quarter of the cost for the Maldives.
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