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The Mauritian real estate sector has seen positive growth over many years. But are there warning signs that some industry segments may be in oversupply?
Rs 300 billion in real estate projects
According to EDB Mauritius, there are currently Rs 300 billion of real estate projects in the pipeline or under construction at the moment. The sector is separated into 5 distinct classes; Residential (various real estate schemes to foreigners), Business Parks (incl. Smart Cities), Warehousing, Office space, and Hotel/Hospitality.
The construction of numerous office buildings, business parks, and alike, has provided the business sector with an array of professional office solutions. Much of the development strategy has focused on de-urbanisation and the creation of ‘new hubs’ such as Ebene Cybercity and Vivea Business Parks to much success. Vivea Business Park specifically holds a positively high tenant occupancy rate of 96%. But the question remains, is there adequate demand to fuel the ongoing flux of new office supply onto the market?
Unpacking supply, demand, and yield expectations
In terms of a commercial deep dive, Elevante Property Services indicated Port Louis CBD used to be the dominant office supply location but over the last 20 years has seen a geographic distribution of this market as a result of developers injecting a lot of capital into developing offices in decentralized ‘hubs’. An additional 95,000 m2 of space is estimated to come onto the market by June 2025 indicating an additional 8% to current supply figures, predominantly based in Ebene.
Occupancy Levels
In terms of occupancy, current levels are estimated at 94% occupancy for Grade A office types and 78% for split between Grades B & C. There has been a notable shift over the last 5 years with Grade A offices taking the majority of occupied space. Forecasts indicate that the total stock (index of 126.00) exceeds occupied stock (index of 117.5). With regards to the pipeline growth, there is a widened growing cap divided between available supply and demand which could lead to underperforming buildings and/or adjustment of prices to realign with market expectations.
