Mauritius opens up foreign property ownership

In what is the very first project allowing open foreign investment in property on the exotic island holiday destination of Mauritius, Pam Golding Properties' International Division has been appointed to market the island's first Integrated Resort Scheme (IRS) - the Tamarina Golf Estate and Beach Club.

Legislation in Mauritius has recently been amended to allow foreign ownership of residential property in terms of what is known as IRS - Integrated Resort Schemes. Previously, foreign investors were only permitted to acquire property if they invested a minimum of US$500,000 into the economy via a business or other form of financial investment, and could then apply to
purchase property.

As the first such project, following the granting of IRS approval to the Medine Sugar Corporation, Tamarina will comprise a boutique hotel with 119 completed luxury villas ranging from 350sqm to 600sqm, a championship 18 hole golf course designed by Australia's Rodney Wright (who has designed other courses in Singapore and elsewhere in Mauritius), and a private beach club.

The villas will be marketed at an average selling price of US$750,000. The 103-hectare site is in a prime location on the popular south west side of Mauritius near the landmark Sugar Beach Resort and Le Morne Mountain.

Over the past two years PGI (Pam Golding International) has been involved in assisting the development process and the official governing body, the Board of Investment (BOI), which implemented the scheme and which oversees the new
legislation.

By way of background, Andrew Golding, CEO of the Pam Golding Property group, explained: "The previous investment-related property restrictions did not comprise a simple mechanism, but were in place in order to attract foreign
investment, which was more specifically driven by the fact that the sugar industry, which is a high income earner for the country apart from tourism, is under threat due to world prices and cost of production.

"Mauritius currently receives internationally subsidised sugar prices, a status quo that comes to an end in 2006. This has necessitated contingencies to reduce workforces, thereby resulting in a major voluntary retirement scheme for the industry. In turn, this has led to owners of sugar plantations being allowed to sell off pockets of their tracts of land in order to increase
housing infrastructure for the local community; fund these retirement schemes; and sell certain identified tracts of land to foreigners under the new IRS legislation."

The IRS legislation compels owners of the land to create a resort-type environment where among others, a golf course/hotel component and individual villas will form part of the resort activity. The villas can be sold to foreign investors with a minimum entry level of US$500,000.

Also, foreigners can now directly buy property in these schemes, which will further entitle them to apply for residents' permits.

Added Golding: "Foreign acquisition of property in Mauritius is now far more accessible, plus there is a lifestyle component attached to the property - a key factor among international investors seeking idyllic island real estate opportunities which already include other locations such as Barbados and the Cayman Islands."

Said Louis van Niekerk, who heads up PGP's International Division: "With the launch of this first resort scheme, there are limited opportunities and we believe not only will we see high interest among international buyers seeking a second or leisure home with an appealing lifestyle, we anticipate a demand also from professional people or those who are able to relocate their
international business to a permanent residence in Mauritius, where the tax status is beneficial to those in countries with high tax rates.

"Previously, Mauritius has been primarily a beach destination, but now it has the potential to become a major golfing destination, with four or five world class golfing resorts in the pipeline. The existing golf courses are already over subscribed and there is a natural demand for golfing opportunities there - the most recent being the Sol Kerzner-developed golf course at Ille aux Cerf, opposite the Le Tousseroc Hotel."

Van Niekerk noted that due to the stringent development requirements and limited opportunities, the properties would be highly sought after, further underpinned by the fact that Mauritius was politically stable and had an already well established and growing tourism market with a sound infrastructure. The group believed these factors would lead to significant capital growth in property values at the new resort developments.

Following extensive research, PGI anticipated the bulk of investors would be from the UK, France, Scandinavian countries and other central European countries, together with African investors that already know the island and frequent it. Interest was also expected from Russia and the Netherlands.