Make An Investment Move Into Mozambique

As the COVID-19 pandemic continues to highlight the fragility of the economy and related market investments in times of crisis, it also underlines the tangibility of real estate as an option to which investors will be drawn.  And for those considering investment and/or emigration into Europe or Australia, there are other countries with far more staggering opportunities for capital growth on our doorstep.  

The 2020 African Economic Outlook shows that economies on the African continent are growing well, higher than the global average. The report projected a steady rise in growth, from 3.4% in 2019 to 3.9% in 2020 and 4.1% in 2021.

Take burgeoning Mozambique, one of Africa’s most sought-after tourist and investment destinations, for example.  This is a country that is on the cusp of an economic boom due to further anticipated growth thanks to expansion within the oil and gas industry, along with untapped tourism potential in the region – even within the pandemic scenario. It’s also one of the top three fastest growing economies in Africa.

Sasol is already prominent in the area, with a significant operation assisting other companies with natural gas extraction and maintenance of the pipelines running between Vilanculos and Secunda in South Africa, and has recently announced their $10.8 billion project expansion. 

The third annual MozamReal Investment Forum, due to take place on 1 July, will provide access to opportunities and insight into the real estate sector, which is predicted to become one of Africa’s fastest growing sectors. 

Mozambique is increasingly opening up to property investors following the introduction of new legislation in 2007, which allows foreigners to buy into multiple-unit resort developments.  This offers a particularly attractive option for South African investors, who are persuaded by an environment where serious and violent crime is uncommon.

“It’s a flourishing property market that has attracted high capital so it’s understandable why investors are scrambling to get involved,” says Ettiene Erasmus, property developer at Mozambique Property Developments & Investments (Mozprops). Erasmus is behind the development of a 42-hectare coastal estate that combines residential, hotel and business options, in a prime development area 12km from Vilanculos.

According to Erasmus, developments like these offer South African investors the chance to begin building their own global real estate portfolio offshore. Erasmus has a solid pedigree as an entrepreneur for the past three decades in Mozambique. He has led and managed various businesses in sectors such as real estate, imports/ exports, logistics and distribution.

The new project, Bazaruto Island View Estate (BIVE), is  in an idyllic location overlooking the Bazaruto Archipelago along the African coast, and will be one of the largest, most luxurious coastal developments in Mozambique. “It is an attractive and reliable investment prospect for those seeking a retirement oasis, a long-term property investment, or even an opportunity to expand a business investment portfolio,”  Erasmus says.

Once complete, the fully-contained precinct will include luxury homes, a hotel, beach lodges, a resort, clubhouse, a business centre, medical facility and a small crafts marina, with a marine park nearby.  The units will offer owners the potential for live-in, long-term or short-term rentals. 

The first stage of the project has begun with the construction of the show houses.  Prices start from R275 000 to R3.5 million for a property on the development, with one-bedroomed houses selling for R875 000 in the BIVE private residence section.

Mozambique is also South Africa’s third-largest trading partner on the continent. Total trade between the two countries has grown from R43.9 billion in 2013 to R52.4 billion in 2018. In addition South African companies, state-owned enterprises (SOEs) and small, medium and micro enterprises (SMMEs) have invested over R90 billion across a broad spectrum of sectors in that country between January 2003 and March last year.

This increased investor interest means the paradise property you might  invest in could boom by 15.9% a year for the next ten years.

The potential is elevated by a maturing market that is beginning to also embrace business models that cater for all traveller sectors, rather than the traditional four- and five-star guests.  Today, many new investors in sub-Saharan Africa are focusing on lower consumer price points in order to accommodate a wider range of leisure as well as business travellers.

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