DEVELOPING AN IRS
Mauritius has never seen an IRS or RES development that has failed or defaulted. There were a few that were proposed but never got off the ground. The reason for this, as Hudson explains, is that it takes a lot of financial muscle and fair amount of resilience, especially during tough economic times, to launch an IRS project – those that have been successfully completed were launched by big corporates.
So, in other words, there aren’t fears that the market will become overdeveloped with IRS developments and therefore the market f looded. Espitalier-Noël expands: “It will
be difficult to have more IRS developments as buyers want to be by the sea and almost by definition, the whole land around Mauritius is state land and not private land – almost everywhere with a few exceptions. It will be a challenge for developers to find a property of size that is freehold.”
He says that that this will put a limit on development. “And if you develop an IRS inland – 2km from the sea – chances of selling are low.”
According to Hudson, the cost to develop villas in an IRS is significant because of everything that goes with it. “The infrastructural and added-value costs to build hotels, beach clubs and golf courses are a significant investment. To f lood the market with that type of product is unlikely.”