Mauritius FDI inflows surges to $503m on luxury property boom
- Mauritius experienced a 27% increase in foreign direct investment (FDI) inflows, reaching 23.1 billion rupees ($503 million) in the nine months ending in September.
- Real estate activities accounted for 69% of the overall inflows, with a remarkable 59% surge in investment in the sector.
- Sales of luxury residential units to foreigners increased by a third, reaching 10.24 billion rupees, with Europe, led by France, being the primary source of FDI.
Foreign direct investment (FDI) inflows into Mauritius, a nation heavily reliant on tourism, surged by 27% to reach 23.1 billion rupees ($503 million) during the nine months ending in September compared to the previous year. This increase was primarily driven by higher property sales.
Real estate activities dominated the total foreign investments, accounting for 69% of the overall inflows. Investment in the real estate sector experienced a remarkable 59% surge, reaching 15.85 billion rupees. Notably, sales of luxury residential units to foreigners increased by a third to 10.24 billion rupees, as reported by the Bank of Mauritius based in Port Louis.
Investments directed towards accommodation and food services activities more than doubled, reaching 2.48 billion rupees, according to preliminary data from the central bank. These investment inflows complement Mauritius' tourism revenue and exports of manufactured goods, which are vital sources of foreign currency for the Indian Ocean island nation. Europe emerged as the primary source of foreign direct investments, with France leading the way.
Over the past three decades, Mauritius has undergone significant economic transformation, evolving from a low-income agricultural economy to a middle-income diversified economy. This growth has largely been fueled by the expansion of the luxury tourism sector. Visitor arrivals have steadily increased over the last twenty years, growing at an average annual rate of 9%, while tourism-related revenue has seen a substantial rise of around 21%. Currently, tourism contributes to a little over 14% of Mauritius' GDP. Mauritius boasts over 20 international hotel chains, comprising over 100 hotels. The government has prioritized low-impact, high-spending tourism to maintain the island's reputation as a luxury beach holiday destination. Despite the dominance of luxury hotels, the tourism industry has diversified to include various accommodation options, ranging from simpler hotels and business accommodations to bed and breakfasts, villas, and apartments. Airbnb has also become a viable option on the island. Looking ahead, tourism is expected to remain a crucial component of the Mauritian economy, serving as a significant source of foreign exchange revenue.