A sharp increase in tourism combined with multimillion-dollar grants from the U.S. for infrastructure improvement is increasing the economic profile of Cape Verde. The International Monetary Fund is predicting a 1.5% increase in island nation’s economic growth to 7.1% by 2013, further improving its newly-acquired status as a Middle Income Country. Tourism is estimated to be increasing at a rate of 20% per year, which means more hotels, spas and resorts are experiencing a boost in sales. The boom is also expanding into residential real estate, fueled in part by investor discounts of as much as 30% for cash buyers. For more on this continue reading the following article from Property Wire.
The economy in Cape Verde is expected to rise 7.1% by 2013 from 5.6% in 2011, according to the International Monetary Fund which experts believe will foster growth in the real estate sector.
In addition a $66.2 million aid grant from the United States to reform water, sanitation and land management is expected to increase growth even further as infrastructure improves.
‘Cape Verde is a nation on a rapid up. It has halved its 1990 poverty level and in 2008 officially graduated from Least Developed to Middle Income Country status. Much of this positivity stems from one of the fastest growing tourism industries in the world and active encouragement of substantial foreign investment,’ said Adam Cornwell, managing director of Feltrim International which promotes real estate on the islands.
He explained that as the country has scant natural resources and little rainfall, the aid flows have been needed to make the necessary improvements to cope with the influx of tourists. The five year agreement with the US Millennium Challenge Corporation announced this week will focus on specific projects to help Cape Verde sustain its growing tourism industry.
Some $41.1 million will help make Cape Verde’s national regularity institutions financially sound and transparent and transform utilities into high performing commercial organisations. The islands’ households and businesses will benefit from better quality water and sanitation services.
Then $17.3 million will be used to refine Cape Verde’s legal and institutional environment to make it more attractive for large and small investors. Land information will become more reliable, land rights strengthened and land transactions made more efficient.
Experts believe that real estate development and tourism will increase as a direct result and around 13,000 jobs will be created.
According to the latest official statistics, tourist arrivals continue growing at a rate of 20% per annum with 219,000 arriving in the first half of 2011, an increase of 27.5% against the same period in 2010. It is projected that Cape Verde will reach half a million tourists annually by 2015 and one million by 2020.
The number of hotel beds is also increasing year on year. Spanish chain Riu has five hotels across the islands four of which are five star and rival Spanish company Melia opened its five star hotel on the island of Sal in 2011. Cape Verde ranked third on Skyscanner’s list of emerging destinations in 2011 proving there is now a strong winter sun rival to the Canaries in the mid haul market from the UK.
New on the island of Boa Vista is the 1,140 unit Santa Mónica Beach Resort and Spa which combines a five star hotel with luxury one and two bedroom apartments and two to five bedroom villas each with private pools. The beachfront resort has a range of gourmet seafood, oriental and fine dining restaurants, childcare services and a range of leisure pursuits from on site tennis coaching to mountain biking, big game fishing, diving, windsurfing, sailing and 4×4 safaris in the local vicinity. A championship standard golf course is planned.
The beach at Santa Mónica is well known as one of the world’s key turtle nesting sites as well as being a breeding ground for humpback whales and home to many native and migrating bird species. Boa Vista itself is renowned for its world leading beaches and much is protected by law as natural park thus preventing overbuilding.
Hotel occupancy, according to the government, is currently 90% and there is no low season due to average daily temperatures consistently hovering between 21ºC and 30ºC which is warmer and more reliable than even the Canary Islands.
Boa Vista’s International Airport now takes direct five and a half hour flights from Glasgow, Gatwick and Manchester and flights from Bristol and Stansted are to be added giving UK visitors greater flexibility. Direct flights to Cape Verde are also in place from Lisbon, Madrid, Milan, Frankfurt, Brussels, and Boston. Passenger traffic across the islands’ seven airports rose 11.2% year on year in 2011, from 1.6 million to 1.78 million.
For a limited time there are early investor discounts of 30% for cash buyers with prices starting from €83,300 for a one bedroom apartment and €325,500 for a detached three bedroom villa.
Finance options of up to 90% are available making ownership of a one bedroom apartment achievable with a €11,900 deposit. There are also rental and leaseback plans offering up to 7% fixed income with allowances for personal use.
Property at the resort also qualifies for SSAS and SIPP purchase via fully managed hotel suites from €85,000 with 10 year guaranteed 7% rental income. Licenses and planning permission have been granted and construction is underway on site with phase one scheduled for completion in the middle of 2013.
This article was republished with permission from Property Wire.