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Mauritius: SA’s tenth province?

Economic growth and safety lures local entrepreneurs, investors.

The scene is a very typical South African one.

It’s a warm and sunny Saturday afternoon, the “manne” are all standing around the Weber braai with the proverbial in hand, waiting for the rugby to start on DStv. The T-bones and boerewors were freshly cut up by the butcher at the local Shoprite, just that morning.

The wives/girlfriends are in the kitchen making the salads and desserts. The sounds of the children in the pool reverberate around the newly-developed complex, a mixture of English, Afrikaans and … French.

Huh? Did I say French?

Yes, and a little Creole thrown into the mix, just to spice things up.

West Island

It’s a typical Saturday afternoon at the recently completed West Island Resort, built at the spot where the Black River flows into the Indian Ocean, close to the town of Tamarin Bay, on the west coast of Mauritius. It’s about a 30-minute drive from Port Louis and an hour from the brand new airport in the eastern part of the island.

Amongst the “manne” you will find fund managers, farmers, the MD of a JSE-listed company, the head of a large car dealership in Rustenburg and one of the largest farmers in the Free State. They’re all owners in this brand new real estate scheme (RES)-marine development which has sold out in record time, with more than 65% of the buyers coming from South Africa. The rest are from Gabon, France, Britain and one or two from Mauritius.

The West Island development was undertaken by two South African brothers: Robbie and Ross Alexander, sons of the well-known, late radio personality Robin Alexander.

The brothers are well known in both the SA financial services industry and watersport fraternities. Robbie, after a stint at Investec Asset Management, headed out on his own and set up an international hedge fund, based in Switzerland, which was sold a number of years ago.

He is currently ranked as one of the top-rated waterskiers in the world.

Ross, the younger brother, moved his family to Mauritius for the duration of the project.

While there are still a small number of villas and some apartments left for sale, West Island has been one of the most successful developments on the island. The bulk of the finance was provided by Investec, so even on Mauritius you cannot escape the ubiquitous zebra.

The Alexanders are now considering other property developments, although they admit that they are unlikely to find another such a site as the one at Black River. Direct access to the sea from your home is very rare and expensive in Mauritius.

The lure of Mauritius

The RES and integrated resort scheme (IRS) are government-endorsed schemes whereby foreigners can buy residential property on Mauritius, acquire residency and, over time, citizenship. The minimum purchase price is $500 000. The buyer of any such property plus spouse and children under the age of 18 automatically become residents of Mauritius.

I asked some of the new-owners at West Island why they paid, relative to South Africa, such a premium for property on the island.

The answers ranged from (a) an offshore investment to (b) residency for them and their families and (c) possible citizenship as a bolt-hole from South Africa, especially the farmers.

Several of the owners I spoke to have businesses that can be run from anywhere in the world via the internet but said that Canada, Australia and even Britain were not considered due to weather and travel considerations.

But it’s not only the lure of owning property that is attracting a growing horde of South African businesspeople to Mauritius. Several government initiatives in recent years have created very attractive investment and trading opportunities for SA companies and individuals alike, using double taxation agreements with a wide range of countries, including South Africa, as a major motivation.

There’s also low taxes, ease-of-doing business, rapid economic growth and rising international competitiveness. The country overtook South Africa as the most competitive in Africa some time ago and is currently ranked at 33 in the world, with SA at 53.

It is one of the safest countries in the world. No-one is allowed a gun and there is nowhere to take a stolen vehicle.

They also drive on the left-hand side of the road, English is the official language (although most speak French or French Creole as their mother tongue) and Mauritius follows the English jurisprudence. It is also a four-hour flight from OR Tambo, and there’s a two-hour time difference between the two countries.

SA presence

I’ve learnt that there is an active Mauritius-South African Chamber of Commerce on the island that meets every quarter.

At the Caudon Waterfront in Port Louis, a development which looks and feels like a mini-Cape Town Waterfront, you will find literally tens if not hundreds of South African companies listed has having offices in the building. They range from asset managers to banks, financial services, trust companies, aviation companies and trading companies.

Did I mention that Air Mauritius is headed up by André Viljoen, a South African, who used to run SAA ten years or so ago?

And just to remind you of home, you have, in addition to the Shoprite, a Woolworths, a Seeff-franchise and a host of other SA-linked shops and retailers close to West Island Resort. Bagatelle shopping centre is 25-minutes away. The largest on the island, the centre was recently completed by JSE-listed Attacq (formerly Atterbury) and looks and feels no different to any modern flagship shopping centre in SA.

There’s even an ex-Springbok rugby player. Kabous van der Westhuyzen, who played for the Boks fifteen years or so ago owns The Beach House overlooking the exquisite Grand Baie in the north of the island.

So just how many South Africans are on the island? No one seems to know for sure: the guesses range from 5 000 to 25 000. But everyone I spoke to agreed that the numbers are increasing rapidly.

PS. It’s not true that the dodo was hunted to extinction by the Dutch or French colonisers. In fact, the bird was known as a “wurgvogel’ by the Dutch as the meat was bitter and not edible by humans. The slow-moving birds were, in fact, hunted to extinction by the dogs brought onto the island by the English.

*Magnus Heystek is investment strategist at advisory firm Brenthurst Wealth. He can be reached at magnus@heystek.co.za for ideas and suggestions.

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