Investment in Zanzibar
Explore profitable sectors and emerging investment opportunities in Zanzibar
Economic and Tourism Context of Zanzibar
Zanzibar is experiencing remarkable growth thanks to several factors: a dynamic economy, favorable government policies, and increased demand for luxury residences. The archipelago's economy is mainly based on tourism, agriculture (especially spices), and fishing. In 2023, tourism accounted for about 30% of GDP, generating nearly USD 950 million, with tourist attendance exceeding 500,000 visitors, and constantly increasing. Zanzibar's economy is growing steadily with a forecast of around 6.2% for 2024 in the trade, construction and tourism sector.
Potential return on investment
Investing in real estate in Zanzibar, especially in luxury villas, can generate significant returns on investment (ROI). The local real estate market is growing, supported by a growing demand for accommodation for tourists and expats. Investing in property offers attractive returns, with rental income yielding up to 20% annually due to high occupancy rates, while capital appreciation contributes an additional 5% to 7% per year. Altogether, the total return on investment combining rental income and property value growth can range between 15% and 25% annually.
Capital appreciation
Property values in Zanzibar have risen by 7% to 12% annually, with areas like Michamvi and Matemwe offering strong potential for long-term gains driven by infrastructure growth and rising demand
Rental Income
In 2023, rental income from luxury properties in Zanzibar rose by an average of 10%, with villas in tourist hotspots like Nungwi and Paje yielding up to 20% ROI and seasonal occupancy rates exceeding 80%
Total returns
Investors can expect total returns (rental income + capital appreciation) of between 15% and 25% per year, depending on the location and management of the property being invested
Zanzibar is a Rising Star for Foreign Real Estate Investment
Zanzibar presents a highly attractive environment for foreign real estate investment, supported by investor-friendly policies from the Zanzibar Investment Promotion Authority (ZIPA). These include simplified procedures for non-residents to acquire property, strong legal guarantees, and tax exemptions especially on imported building materials for approved projects. Over the past five years, the government has invested over $300 million in infrastructure, including the expansion of Abeid Amani Karume International Airport and the improvement of major roads linking key tourist areas.
The real estate market offers strong returns, with villas in popular areas like Nungwi and Paje generating up to 20% rental income annually and seasonal occupancy rates exceeding 80%. Property values have appreciated by 7% to 12% per year, particularly in emerging areas like Michamvi and Matemwe. Beyond financial gains, Zanzibar offers an exceptional quality of life with its rich cultural heritage, highlighted by Stone Town a UNESCO World Heritage Site—and international events like the Zanzibar International Film Festival. The island also boasts world-class beaches, vibrant marine activities, and a welcoming expatriate community, making it an ideal location for both investment and lifestyle.