Regional Market Guide

Private Islands of the Indian Ocean

The Indian Ocean is where the private-island question becomes a question about tenure rather than price. Almost nothing here is sold freehold to a foreign buyer; almost everything worth having is a long lease, a sanctioned purchase, or a resort concession held through a local vehicle. That structure deters the casual buyer and rewards the prepared one, which is one reason the region is the centre of our own practice. This note sets out how Seychelles, the Maldives and the Zanzibar coast actually work, and what a family should expect to pay.

A region defined by title, not acreage

In the Caribbean the first question is which island; in the Indian Ocean the first question is what, precisely, is being conveyed. Freehold in the Western sense is largely unavailable to non-nationals across the region. What changes hands instead is a leasehold interest, often of fifty to ninety-nine years, frequently conditioned on development, and in most jurisdictions requiring a government sanction that can be withheld. A buyer who understands this does not find it a deterrent. A long, secure, renewable lease over a well-chosen island, held through a properly constituted local company, can offer most of the practical benefits of ownership, and the sanction process itself acts as a filter that keeps these markets quiet and unhurried.

In the Indian Ocean you are rarely buying land. You are buying a lease, a licence and a relationship, and the quality of all three matters more than the acreage.

This is the region where our own depth is greatest, precisely because the structures are unforgiving of error. A misread concession, an unassignable lease, or a development condition that cannot realistically be met can strand a buyer years and considerable sums into a transaction. We spend most of our time here reading the fine print rather than admiring the water.

Seychelles: inner islands and outer islands

Seychelles divides cleanly into two markets. The inner islands, the granitic group around Mahé, Praslin and La Digue, are the accessible, high-value end. Foreign nationals may acquire property, but non-citizens must obtain a Sanction to Purchase from the relevant ministry, and the transaction attracts a sanction duty, commonly around eleven per cent for non-residents, together with a recurring immovable property tax on assessed value. On the public record, small inner-island holdings have been offered in the US$10 million to US$20 million band, with landmark parcels quoted far higher; a well-placed inner island near the main group has carried an asking figure of around US$60 million. These are sanctioned freehold or long-lease interests, and the sanction is the gate through which every foreign purchase must pass.

The outer islands, the Amirantes, the Aldabra group and the scattered coralline atolls, are a different proposition entirely. Non-Seychellois may not acquire freehold on any outlying island; interests there are held on long lease, typically around seventy years, and frequently through or alongside the state-linked Islands Development Company. Conservation obligations are heavy and growing. Developers on leased outer islands are commonly required to fund conservation trusts for seabird and turtle habitat, fishing is restricted within a kilometre of some islands, and certain atolls, St Joseph among them, are protected from development altogether. For the right buyer these are not obstacles but attractions: a lease over a conservation-grade atoll is among the rarest holdings on earth. It is simply not a market for anyone seeking a quick build.

• Secure the Sanction to Purchase in principle before committing capital, not after.
• On outer islands, read the conservation trust and land-use conditions as core deal terms.
• Confirm the lease is assignable and that its residual term supports your horizon.
• Model the sanction duty and annual property tax into the true cost of holding.

The Maldives: the leasehold resort model

The Maldives operates the most structured island market in the world, and the one least suited to the private-residence buyer. The constitution prohibits foreign freehold outright. Islands are leased from the state, ordinarily for fifty years with the possibility of extension toward ninety-nine, and the entire process runs through the Ministry of Tourism as a development undertaking rather than a property sale. Applications require a development proposal, an environmental impact assessment and evidence of financial capacity, and lease rights are almost invariably held through a locally incorporated special-purpose vehicle.

Pricing spans an enormous range. Entry-level leasehold islands have been available from roughly US$5 million, while established resort leases and prime lagoon parcels reach far higher, with figures cited from the low millions to well over US$100 million for trophy assets. Annual ground rent is a live cost, historically quoted around US$8 per square metre and negotiable with intended use. Financing is thin: most transactions are cash-equity, and where regional banks lend at all they do so at conservative loan-to-value ratios closer to forty or fifty per cent than the leverage a buyer might expect at home.

The practical consequence is that the Maldives is a resort market wearing the clothes of a property market. A family that wants a private island here is, in almost every case, becoming a resort developer or acquiring an existing operation, with all the licensing, staffing and operating weight that implies. That is a legitimate and sometimes very rewarding undertaking; it is simply not the same thing as buying a cay in the Exumas, and it should not be approached as though it were. Our note on island income and resorts sets out the operating economics that decide whether such a project makes sense.

Zanzibar and the Tanzanian coast

The Zanzibar archipelago has emerged as the region's more accessible entry point, and its rules have settled into a workable shape. Foreign buyers cannot hold land outright, but may take renewable leaseholds of up to ninety-nine years, commonly issued in blocks under the islands' condominium framework and typically within government-approved developments. Annual ground rent to the state is modest. Once the approvals are in place a leaseholder enjoys close to freehold rights in practice: occupation, letting, resale and inheritance. Genuine private-island parcels appear from time to time; one beachfront island parcel has been publicly listed around US$330,000, an indication that the coast still offers scale that the Maldives and inner Seychelles cannot.

The caution here is quality of title and quality of counterparty. Approvals through the relevant investment authority matter, and buyers should be as careful about who they are dealing with as about what they are buying. The upside is a coastline of real beauty, improving air access through Zanzibar and Dar es Salaam, and pricing an order of magnitude below the region's marquee markets.

Access and the practicalities of a remote holding

Distance is the region's defining friction. Seychelles and the Maldives are served by strong long-haul hubs but the last leg, seaplane, launch or private charter, is where cost and reliability concentrate, and it should be modelled as a permanent operating line rather than a one-off. Zanzibar is the easier of the three to reach. In every case the running of a remote island, power, water, staff, provisioning and maintenance in a salt and monsoon environment, exceeds what first-time buyers anticipate. Our companion notes on island access and transport and private island costs set out those numbers plainly.

How we work in the region

This is the region where discretion earns its keep. Sanctioned inner-island transactions, outer-island conservation leases and Maldivian resort concessions almost never appear on public portals, and the people who transact them prefer it that way. Our detailed country treatment sits in the Seychelles country guide, and the sequence of an acquisition in our note on how to buy a private island. We maintain a working directory of the region's principals and an ongoing island dossier of leases and concessions worth watching, publish our reading of the market in the acquisition brief and the quiet market, and receive discreet instructions to sell through register an island.

Buyers comparing structures will find the contrast instructive against the freehold ease of the Caribbean, the scarcity of the Mediterranean, and the native-title complexity of the South Pacific. The Indian Ocean asks more of a buyer than any of them. Handled properly, it also offers holdings the others cannot match.

Asking prices and public record, not verified sales; general orientation, not advice. Enquiries: the enquiry form.