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Cape Verde seeking funds to support real estate companies

The initiative was proposed at a meeting of various property firms operating on the islands and officials from several government departments. Tourism in Cape Verde accounts for around 10% of annual GDP and is vital to the archipelago's future.

The Tourism Real Estate Association, Promitur, said it has put forward the idea to help keep confidence up and it is positive about visitor numbers.

Cape Verde has not been immune to the real estate downturn with some islands and types of properties faring better than others. According to Cape Verde specialist Adrian Lilywhite, property on the popular island of Sal is doing better than others.

But he thinks prices of new homes will have fallen by an average 15% and there are a handful of distress sales now because some property investors cannot afford to pay the balance on their investments.

Demand for property in Cape Verde has dropped dramatically and many projects have been scaled back or dropped, according to says Jorge Duarte, of Tecnicil, the developers behind Vila Verde on Sal.

So the islands want to keep their tourism industry strong. The government of the former Portuguese colony 375 miles off the Senegal coast is also keen to maintain a massive infrastructure programme which is regarded as an essential part of keeping tourist numbers high.

A delegation is due to visit the UK in June to seek interest from British companies for contracts for its massive multi billion pound building programme.

The total cost of the work could exceed £2.5 billion and it includes a huge bridge building scheme to link the main islands as well as hotels and leisure facilities.