Assetz® News - Cape on investing

Cape on investing

13th May 2008 |

With so many destinations for those buying investment property overseas being hit by the credit crunch, emerging markets are attracting plenty of attention. Cape Verde is among these, although it would be quite incorrect to suggest that it is becoming popular because of the credit crunch.

This archipelago off the coast of West Africa has been gradually building its reputation as a centre of tourism and property over recent years, with the two of course being closely linked. As the former industry is a big earner for the islands the investment that has gone not just into bricks and mortar but also into roads and runways has helped push this forward. A couple of years ago there were no direct flights from the UK to the islands. Now there are and British tourists and investors have been coming in good numbers, with plenty more flying into the new airports in this former Portuguese colony from other European destinations. The Global Property Group has noted that according to figures from the Cape Verde minister of the economy, growth and competitiveness, the number of tourists has soared by 25 per cent since 2002.

Such growth has been helping Cape Verde move ahead in recent years and may be the reason for it continuing to do so despite the credit crunch. Deborah Fox, director of Emerging Real Estate, a firm which specialises in such new markets, said: "There's no doubt that the credit crunch has had an impact in Cape Verde like so many other countries around the world. However, it is still an affordable destination with strong anticipated capital growth so investors can still see the potential and the lower prices in such an amazing location means they're not totally out priced by the market."

That sort of combination will sound like music to the ears for many. Reporting on the expansion of the tourist economy, the Daily Telegraph focused this week on the island of Sal, which thus far has an international airport and a few crowded resorts, plus the topographical advantage of every part of the two-mile wide island offering a sea view. But all this is due to change rapidly, the paper notes, with £1.5 billion in private investment lined up for the next five years. New developments will include the Cotton Bay resort, which will comprise 4,000 apartments scattered across a 7,000 acre site, meaning 93 per cent of the land there is not built on and can offer gardens, lakes and of course golf.

In both the paper's analysis and that of Ms Fox, the same advantages apply: It can be reached from Britain inside five hours with no jetlag, yet offers year-round sunshine. More importantly, the sort of investment the Telegraph highlighted on Sal, which is also going into other islands such as Boa Vista, indicates that while others are suffering liquidity problems the money is still going into Cape Verde.

As Ms Fox concluded about the country, this has to be good news, saying: "Continuing investment in its infrastructure and better access are all great signs for would-be investors."

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