Real Estate: More than half of the projects have not started while the oldest date back to April 2004. Their promoters may have their projects cancelled.
By launching its Integrated Resort Scheme, Mauritius did not innovate. It is a high class real estate development scheme- accessible to strangers- which many countries adopted and are still adopting, entailing a strong international competition which is not negligible. However, the Mauritius touch is found in the word “integrated”. In fact, each project must be integrated in is geographical environment and it does not imply only the environment, but also the social actions in which promoters must get involved. It involves, for example, the carrying of formations in order to employ a neighbouring workforce, knowing that projects are realised in rural regions, where jobs are scarce. Higher than this social dimension, the IRS scheme also seek to develop high class accommodation capacities in Mauritius. In fact, much often, investors occupy their residences only a couple of weeks during a year hence, it can be rented for short stays in the spare time. This represents further capacities without having to invest in the construction and for foreigners who invested this represent a (partial) relief. It is always good to take, even if you are rich, considering that some bought villas by requiring credits. Last but not least, some advantages of the IRS are also to generate tax revenues through a special tax imposed to the promoter.
Banks have the tendency to cut resources
Officially, the IRS’s future was bright. The Medine group, first operator to get involved in the scheme in 2005 with Tamarin on the west coast, reckoned that they were too lenient with its selling price. Those who bought one of the villas for approximately 500 000 Euros made extraordinary profits by re-selling them afterwards. Real state speculations are ongoing. The same cannot be applied to all the IRS projects as, in the mean time, we experienced the economic crisis.
The banks which had to guarantee the operations (insured in VEFA) had the tendency to cut the resources. No doubt that the promoters felt afraid regarding the economic crisis which hit the rich countries where their targets were found. From the twenty-some approved projects by the BOI till this day, a compulsory checkpoint for investors, more than a half have not started their construction works. While all the agreement letters were delivered in April 2004, several promoters are still struggling to materialise their projects. Among eight projects which received the BOI’s approval, five started with their construction works and are either completely or partially achieved. Among them there are: Tamarina Golf Estate (Medine) and Anahita from the Ciel group. The first phases of those two projects have been completed. The villas Valriche in Bel Ombre, the Albion Club med (which display villa has been revealed) and Belle-Rivière Promotion are in construction phase. Regarding the La Balise Marina projects from the Espitalier Noel Limited group and the Matala Properties, both in Rivière Noire, the construction work shall start in 2010. It is also the case for the Oberoi group, which shall start its IRS villas constructions in April 2010, in the region of Macondé, under the name of “The Oberoi Cape Macondé Resort, Mauritius.”
Extravagant projects scaled down
For the other projects, the future is uncertain. Most of the promoters are reducing their construction plans in order to diminish their investments. The amounts involved are in fact, colossal: the smallest IRS projects presented to the BOI weighed 112 million Euros. As for the most consequent, they could reach 400 million Euros. The selling price of those luxury residences will also be decreased. However, crisis or not, this dithering is not to the liking of the BOI which is threatening them with sanctions. In fact, it counted on a quick realisation of those real-estate infrastructures, symbol of the triumph of luxury properties in the Mauritian economic environment. The main issue is that they did not imposed realisation delays to the projects presented before 2008 and which received their agreement letter. Those who did not received their construction permit, pre-requisite document to start the construction work risk to witness their projects’ annulations. However, the BOI did not provide any indication on the sanction to be applied. One thing is certain, some promoter prefer to go towards RES (Real Estate Scheme) villas, this new scheme which applies to less ambitious projects and which aim is to allow to small planters to convert their lands. Also accessible to foreigners, RES villas and apartments are sold as from 300 000 Euros and higher. Many observers do not hesitate to conclude that the RES sounded the death knell of the IRS
The different steps of an IRS project
1. The promoter presents his project to the Board of Investment (BOI) which deliver – or not – an agreement letter which will allow him to carry on;
2. With his agreement letter from the BOI, the promoter must obtain the formal approval of the Ministry of Environment. Once this document obtain, he may start to commercialise his project:
3. The promoter must finalise the financing of his project (capital and bank warrantees)
4. The promoter once again presents his document to the BOI which shall deliver the construction permit. For the other agreement letters provided since 2008, the BOI impose a maximum delay of one year for the obtaining of the construction permit and the start of the works.
Dysfunctional IRS Projects
Reserve Leisure Resorts Ltd- Solares IRS ( Sociéte de La Reserve) at Flic en Flac (West)
Construction of 309 villas and 200 apartments. Construction of 960 hotel rooms, a mega mall, five casinos, a medical centre, a wellness centre and a leisure park. Approved on the 7 December 2005
Corniche Bay at La Gaulette (South)
Construction of a 9-holes golf and 115 villas. The promoter, Tatorio Holding, obtained its certificate the 4 December 2007 from the BOI. However, he is unable to carry out its project and a real-estate society in negotiating to re-take the project.
Saint Antoine (Nord)
Construction of 300 villas, 640 townhouses, an 18-holes golf, a spa and a club house over 185 hectares in full ownership at Saint-Antoine. The agreement letter from the BOI has been granted on the 25 September 2007.
River Club at Arsenal (North-Ouest)
Construction of 337 villas, an 18-holes golf, a club house, a beach club, a wellness centre and a spa. Agreement date: 26 November 2007.
Roches Noires Resort and Residence et Roches Noires (North-East)
Contruction of 611 villas, 184 apartments, a cottage, an 18-holes golf. BOI agreement date: 13 November 2007.
Barachois Villas Company at Tamarin (West)
Construction of 51 villas and a restaurant over 5838 m2 of land in full ownership. Agreement letter obtained from the BOI on the 26 December 2007.
Domaine Bonaventure at Gros Cailloux (West)
Construction of 576 villas and 32 apartments with 4 leisure centre, a sports centre, two wellness centres, a luxury hotel, a conference room, a shopping village and a market. Agreement letter from the BOI obtained on the 19 March 2008.
Bouigue Development at Saint-Martin (West)
Construction of 34 villas, 46 apartments and a wellness centre. Agreement letter from the BOI on the 28 July 2008.
Sunset in at Tamarin (West)
Construction of 26 luxury villas at la Miyoie, a residents’ club with restaurant, bar, pool, spa and a ballroom as well as a meditation area. Agreement letter obtained on the 3 November 2008.
Seayu at Mont Choisy (North)
Construction of 127 villas and 136 apartments. Seayu obtained its agreement letter on the 31 March 2009.
Oceanic Holiday Resort at Balaclava (north)
Agreement letter obtained on the 31 March 2009 for a village of 450 residences (villas and apartments), businesses and a club house.
Source: L’Eco austral - No 238 - December/January 2009