Is it really possible for property investors to find a destination that can offer all of this and more? Recent research tells us ‘yes’ and that Cape Verde, located off the coast of West Africa, is a place to watch.
There are many reasons why Cape Verde has earned its reputation as one of the world’s hottest property investment locations. Its beauty, culture and stability all lead back to one main reason – and that’s tourism. Put simply, more and more people are jetting to the islands for a holiday.
At the start of the millennium, there were around 75,000 tourists visiting the country and, in 2012, the figure reached 600,000. Tourism continues to climb and there is no sign of slowing down.
In fact, the Cape Verde National Institute of Statistics has predicted that tourism will reach over 1 million by 2015. Adding another string to its bow, the World Travel and Tourism Council (WTTC) also placed Cape Verde 10th in the top 50 holiday hotspots around the world after visitor numbers increased by a whopping 268% between 2000 and 2013.
This boom is creating high demand for rental property from private villas right through to beachfront holiday resorts. As long as people continue travelling to Cape Verde, all property types can expect high levels of occupancy.
And here’s the really good bit. The country doesn’t really have a low season, which is great news for all of us seeking sunshine. Unlike in the Caribbean, there are no hurricanes or stormy weather. Rather, holidaymakers can enjoy temperatures in excess of 25 degrees all year round.
While the appeal of all year round sunshine and world-class beaches is obvious, there is also a unique laid back and undiscovered feel about Cape Verde. Visitors will soon acclimatise to the local “no stress” mantra so, as long as these benefits continue to be in demand, property owners can rest assured that their rental property will be in demand.
Tourists are also well looked after – Cape Verde does have its small boutique and independent hotels, but the big players like Melia Hotels international and Hilton Group are now involved and others will follow suit. With tourism booming on the islands, the demand for high quality accommodation is far exceeding supply. The current ‘best on-island’ occupancy is 95%, presenting an exceptional level of return for investors.
It’s worth highlighting that the tourism boom can of course bring risk as well as reward. Most notable, there is the potential for overdevelopment in the future, and a destination can lose its original charm and appeal, resulting in less demand and an excess of supply – not good for the property owners.
However, Cape Verde is well protected. First, the government has strict legislation in place that only allows low level and low-density projects to proceed. This not only protects the look and feel of the Islands, but also restricts the number of properties that can be built. A similar principle is applied to the land in Cape Verde. This means that much of it is protected and cannot be sold to developers.
In addition, the size of the islands will also dictate the level of development that is possible, which is an advantage over vast countries such as Brazil, Egypt or Turkey. The result is exclusivity. Property ownership is limited, and owners will effectively benefit from an excess of supply, resulting in consistent rental returns, and impressive capital growth. Ultimately, that is what real estate investment is all about, and its seems that Cape Verde is the answer.
