Mauritius: Paradise relocated

The beaches are golden, the sea is opal and the mountain scenery is spectacular. Daytime temperatures hit 30C all year round. But this is not a crowded holiday haven such as Barbados or Bermuda - this is Mauritius, a 2,000sq km island in the Indian Ocean. And this month it opens its doors to overseas holiday home-buyers for the first time.

While many Caribbean islands have been carpet-bombed by new developments in the past decade - a response to governments in the region panicking after losing most of their traditional sugar industries - Mauritius remains genuinely unspoilt, save for a cluster of popular and generally upmarket holiday resorts lining the northern coastline. And that image is what the island's government wants to maintain.

Mauritian sugar cane is still grown on about 80 per cent of the cultivated land and accounts for more than 20 per cent of export earnings, but the country knows that competition from South America and India means it has to look at other options. So it is introducing the "integrated resort scheme", allowing 1,500 properties in five locations to be built for and bought by foreigners. Work on two is under way, and Britons are at the top of the list of would-be buyers.

One development is the 119-villa Tamarina Estate, being built on the west coast, close to the towering Trois Mamelles and Montagne du Rempart mountain ranges and overlooking Tamarin Bay. Villa-owners will have use of a private beach club and an 18-hole golf course - which will have no difficulty being watered appropriately, given the frighteningly high volume of rain in Mauritius. Entry prices begin at £285,000, for a villa with an average plot space of 3,500 sq m. That price includes a hefty £40,000 Mauritian government tax.

Development number two is Anahita, a mix of 215 villas, 70 waterside apartments and 40 lodges overlooking a golf course designed by Ernie Els. A Four Seasons hotel within the complex will provide restaurants, other sports facilities and shops, in what the builder promises will be a "plantation-style development" on the island's eastern coast. Prices here are much more expensive, starting at £456,000 and rising to a whopping £2.85m.

The integrated resort scheme limits the volume of land to be purchased by any individual to 1.5 hectares. As well as the £40,000 government tax on new build, there is a £28,000 transfer tax for second-hand properties plus legal and land-registry fees totalling 1 per cent of the price. Mortgage schemes have been set up with the local branches of Barclays and HSBC.

Joanna Yellowlees-Bound of Erna Low Property, the UK agent selling Anahita, says: "'By encouraging overseas investment, the Mauritian government is looking at building a future for the island, which now cannot rely on sugar and textile exports as its major source of revenue. By carefully allowing a measured degree of growth, the island should be able to avoid the overdevelopment that has encroached upon some of the Caribbean."

Soon, more property under the scheme will be on sale in the UK - two other top-end estate agents, Hamptons International and Knight Frank, are thinking of setting up shop on the island. Given the premium prices of the very first holiday homes, and no hard evidence of what the resale market will be like, no one can accuse Mauritius of undervaluing itself. It clearly feels that its charms more than compensate for the 12-hour air journey from London - and a typical economy-class fare of £600 return.

Mauritius is already home to 9,000 offshore companies, mainly dealing with India and South Africa, and investment in its offshore banking sector alone has exceeded US$1bn. Yet the country remains charmingly undeveloped. Port Louis, the capital, is a thriving but chaotic cluster of markets and streets choked with hawkers, buyers, tourists and cars - think of New Delhi but with more innocence and less noise. The rest of the island is a blur of lush greenery, much of it on hillsides and 2,000ft mountains that plummet down to glorious coastlines and hundreds of undeveloped coves and bays.

Since independence from the UK in 1968, Mauritius has developed from a low-income, agriculture-based economy to a middle-income diversified economy. It has one of the most educated and multicultural workforces in the world, with descendants from the Indian subcontinent, Africa, Madagascar, France, the UK and China. English is the main language. Annual growth over much of the past 40 years has been 5 per cent or more, reflected in dramatic improvements in life expectancy, infant mortality, infrastructure and income distribution. It now has Africa's second-highest per capita earnings, and it is a stable democracy with 1.25m residents.

So buying a property is a solid-looking long-term investment. As for those just wanting an idyllic holiday-home location, Mauritius must be near the top - and at last offers an alternative to the Caribbean.

For more details of the integrated resort scheme, see www.gov.mu