The Maldives: A Maturing Vacation Property Market
A new island resort in the Maldives by an accomplished hotel operator with the rare opportunity of property for sale has been unveiled this month. Luxury resort operators Soneva Group have set out their plans for Soneva Jani, currently an undeveloped agricultural island growing papayas and cucumbers but soon to be transformed into a five-star resort with 54 villas.
The Maldives has no shortage of coral islands. There are a total of 1,192 spread over 35,000 square miles making the Indian Ocean country one of the most disparate worldwide. Less than 200 of those islands are inhabited and while the capital, Male is more densely populated than Manhattan, the remainder are mostly a picture-perfect vision of flat coral-ringed sand, palm trees and true-technicolour blue seas.
The islands average less than one square mile in size, some little more than tiny sandbars but they are tourism gold. Tourism is the Maldives main income source and the country has cornered the market for upscale luxury honeymoons and holidays. Historically the government has pursued a policy of one resort, one island and allocates islands to interested hotel groups on a 50-year lease.
There are currently 126 resorts in the Maldives but property for sale remains rare. Soneva Group were early to spot the potential. In 1990 Sonu Shivdasani, an Indian-British hotelier and his Swedish wife Eva leased 40-acre Kunfundahoo in the northern Maldives and set about creating the first luxury resort. In 1995 Soneva Fushi opened with 42 rooms, focusing on sustainability and the concept of barefoot luxury.
Twenty years on, Soneva Fushi, has been garlanded with awards. It is still owned and operated by the couple through their company Soneva Group and has an exceptional repeat rate of 52 per cent. Its wealthy and often famous guests - Madonna and Paul McCartney are among those who have checked in - appreciate Soneva Fushi's privacy and laidback atmosphere.
Sonu and his team considered 40 islands before finding Soneva Jani, their newest project in the Maldives. Completely encircled by the reef, its interior is covered in banyan and palm trees while a white sand beach rings the entire island. Larger than Soneva Fushi at 120 acres, Jani has a lagoon stretching over five kilometers. Currently home to a handful of farm laborers, building work has started and the first guests should arrive in August 2016.
Jani - the name means "dearest one" - is 30 minutes by seaplane from Male and one hour by speedboat from Soneva Fushi. There will be 54 villas, 24 overwater and 30 on land, and around a third are for sale priced from $3,000,000.
Occupancy in hotels in the Maldives hovers around 60 to 80 per cent and RevPar (Revenue per room) is three times that of any other Asian destination so demand for completed resorts is high says Sonu. He claims that most hotels for sale are snapped up within two weeks yet for such a successful destination the Maldives has had very little growth recently.
"Developing in the Maldives is not easy," Sonu explains. "Everything has to be brought in, you have to be both builder and utility supplier and costs can swiftly rise. Many developers are not keen to take on the risk and local banks are not lending. The government has a glut of islands and because of our successful track record we get offered several every week."
There are other developing difficulties too. Property is available only on short leases of fifty years and the majority of building materials have to be brought in from abroad. The first off-plan project in the Maldives launched amid much fanfare in 2010 but even the then President arriving to lay the first stone on the totally undeveloped Lundufushi island failed to prevent the project sinking without trace.
The Maldives, a Muslim republic, has had a troubled recent political history with protests in the capital this year following the imprisonment of former President Nasheed, the first democratically elected ruler, under anti-terrorism laws
Soneva Group have completed homes for sale on Soneva Fushi from $3,000,000 including the largest villa currently available in the Indian Ocean, an oversized nine-bedroom home for $15,000,000. The group has identified two further islands they plan to develop over the next three years.
Elsewhere in the Maldives, The Viceroy Resort in the north has plans to sell 12 villas as part of its 60-villa resort while closer to Male, Dutch Docklands are building the biggest floating project in the world. The 185 two to four-bedroom overwater villas start from $1,000,000. Maldives Tourism
Tourism figures to the Maldives hover around one million. Seventy-five per cent of visitors to Soneva Fushi are from Europe but the biggest growth in tourism across the Maldives is from the Chinese who account for 40 per cent of arrivals.
As resorts become more luxurious and holiday costs escalate, the Maldives government has expressed its desire to attract more midmarket visitors. Earlier this month President Yameen announced a further 22 islands were available for lease under joint ventures or tenders. His vision is for a number of integrated resorts with multiple guesthouses and marks the first move away from the one resort, one island policy.
"The Maldives isn't like the Bahamas where you can just show up and buy an island," says Jeff Schmitz, Sales Manager at Soneva Private Residences. "The government wouldn't let you do that. They want the local population to benefit through projects that keep visitors coming and employ locals. Since Soneva Fushi opened twenty years ago the quality of life has improved greatly for the local community and it's important to all of us working here to keep that going."