Real Estate in Mauritius and worldwide

Real Estate in Mauritius and worldwide

Introduction

The Real estate sector is not very well known in Mauritius and deserves to be looked into as it represents a major sector in the economy worldwide. The objective of this article is mainly to sensitize readers about what the sector represents and how Mauritius could represent a wise investment for potential investors worldwide.

Definition

Investopedia defines Real Estate as ‘ Land plus anything permanently fixed to it, including buildings, sheds and other items attached to the structure. Although, media often refers to the "real estate market" from the perspective of residential living, real estate can be grouped into three broad categories based on its use: residential, commercial and industrial. Examples of real estate include undeveloped land, houses, condominiums, townhomes, office buildings, retail store buildings and factories’.

Wetfeet.com  states thatThe industry involves the buying, selling, renting, leasing, and management of commercial, residential, agricultural, and other kinds of property, including all the functions that support such activity, such as appraising and financing.

The value of real estates are greatly affected by locational factors such as accessibility, crime rate,  jobs, the character of the area, taxes, school quality and basically any aspect that makes the area appealing or otherwise. 

According to Joneslanglasalle.com,  in a report issued on 5^th of August 2013, global investment volumes in real estate is pursuing its growth despite the economic crisis in Europe. Global commercial investment market is keeping the growth path and leasing in the US is gaining momentum. Investment is strong in the Hotel sector as a whole. Asia and European markets are still suffering from tightening governmental measures but in general the sector is faring well.

Why invest in the real estate sector and the risks involved.

As such investment in the real estate sector can be extremely profitable but is also risky as it depends to a large extent on the economic cycle.  The Subprime mortgage crisis in the US recently caused financers and governments to tighten regulations regarding the sector in order to avoid speculation and reduce risks for potential investors.

Real Estate Sector in Mauritius

Facts and figures about the real estate sector in Mauritius

In its analysis of the Budget 2013, the Board of Investment of Mauritius  informs that from 2008 to 2012, the real estate and construction sectors have accounted for more than 40% of the total Foreign Direct Investment in Mauritius. In 2012, this sector should be attracting nearly Rs 28 billion of investment with Rs 5.5 billion being FDI. This sector would be providing for employment for 90800 people and the industry as a whole would account for 19% of GDP. Given its weight in the economic landscape, the sector is considered as a major aspect of the investment strategy of Mauritius. It should be noted legal provisions for the setting up of IRSs and ERSs(Click on the link for further details) have been pivotal to the tremendous growth in FDI in the sector.

Why invest in Mauritius?

Some of the key factors that make it attractive to investors include but is not limited to the following

1)      Political stability

2)      Advantageous tax system with 15% corporate and income tax

3)      Good standard of living and good telecommunications systems

4)      Several legal provisions to facilitate/encourage investment in the country

5)      Tourism industry considered as a major pillar in the economy and supported strongly by the Government. The higher the tourist arrivals the better will the hotel sector perform thus making investment in such properties as hotels and condominiums profitable investments with proper return on investment.

6)      Generally good weather and temperature throughout the year thanks to its tropical climate