High property occupancy rates in Cape Verde could realise strong annual capital growth
A new five star resort in Cape Verde is confident that investors can realise annual capital growth of 9% and rental yields of 13% after independent analysis indicates that the archipelago has extremely high occupancy rates.
The Sol Meliã managed Dunas Beach Resort on the west coast of Sal Island is the only one of its type on the island and developer The Resort Group said it includes privately owned properties, five bars, four restaurants, tennis courts, a gymnasium, pools and a Meliã Yhi Spa offering a range of treatments.
A wedding pavilion, the island’s biggest conference centre seating 400 delegates and a medical centre are included in the plans as well as food and gift shops and a children’s club and crèche.
Alongside the resort, other developments include the first of four new 18 hole golf courses. Also in hand are plans for a 360 berth marina close to Dunas Beach Resort.
To attract investors the developer asked international consultants Savills to provide data and intelligence backed by research into land values and rentals on Cape Verde’s Sal island compared with the rest of the global market.
‘The research showed that, although the global average for occupancy of rented resort properties was 68%, the average for Sal is 80% with the highest occupancy rates on the island reaching 95%. Despite the recent recession there has been little change in these figures,’ said The Resort Group’s marketing director Adam Ellis.
Rental yields based on these figures range from a conservative 9.4% to 13.1% on a one bedroom apartment, but go as high as 22% on a Presidential hotel suite based on occupancy of 95%, he explained.
‘On the basis of these rental returns and the on going tourist development of the Cape Verde islands, we expect investors who buy properties at Dunas Beach Resort could achieve an annual capital growth of 6 to 12% for the next five years,’ added Ellis.
The figures are supported by market intelligence available from international tour operators and the Cape Verde Government’s growth figures. The Cape Verdean economy should grow between 4 and 5% this year, according to the head of the bank Banco de Cabo Verde.
Cape Verde is tipped to see a big increase in tourism following the launch of a new inter-island ferry service. Figures recently released by the National Statistics Institute (INE) show an increase in visitor numbers of 5.5% in the first quarter of 2010 compared with the same period in 2009.
Designed by Malaga-based architectural practice HCP, which drew up the master plan for the Dunas Beach resort, the properties combine traditional Mediterranean style exteriors with contemporary interiors designed for indoor/outdoor living. All the air conditioned properties can be supplied fully furnished and equipped.