Cape Verde: is this the new Canaries for Irish investors?

Profile: Cape Verde Cape Verde became a new holiday hot spot when it was featured on a TV show this year. Frances O'Rourke visits one of the islands and finds out about a development planned by a group of Cork businessmen

"But which part of Malahide are you from?" one of our party, a true Dubliner, insists on knowing, "the north side or the south side?" It is late, and our group has wandered down a side street in Santa Maria, the nearest village to our hotel on the island of Sal, Cape Verde, looking for a drink.

Amazingly, we find an Irish bar: does everywhere in the world - even this remote sandy island - have an Irish pub?

The Tam Tam, recently bought by a young north county Dublin couple, is Cape Verdean but is rapidly being transformed, with an Irish flag up behind the bar, and invading paddies like ourselves adding Irish flavour.

We will be among the first of many Irish people flying into Cape Verde if the country's government and companies, like Cape Verde Development, have anything to do with it. For Cape Verde, a former Portuguese colony made up of 10 scattered islands south of the Canaries in the Atlantic, is rapidly becoming a major new tourist destination for north Europeans.

Although many Irish people are still saying "where" when Cape Verde is mentioned, it has become a hot destination for people eager to invest in foreign property since UK's Channel 4 named it earlier this year as one of the top 20 locations to buy abroad in 2005.

The west African country, 300 miles west of Senegal, which gained its independence from Portugal in 1975, is being billed as the new Canaries, or as Europe's Caribbean. (Astonishingly, it is only three-and-half hours' flying time to northern Brazil, which shows you how far south it really is.)

But unlike the Canaries, it has virtually guaranteed sunshine year round, with a climate that's a more or less unvarying 25 to 30 degrees Celsius. On Sal, a small island which got Cape Verde's first international airport because it is almost completely flat, there's a more or less constant strong cooling breeze.

And for people wary of flat, volcanic tropical islands sitting in the middle of the sea - and after this year, who wouldn't be? - the Cape Verdeans say that hurricanes start in its part of the world, but finish over in the Americas.

These are some of the reasons why an Irish company which is building Paradise Beach, a low density four-star development on Sal, is expecting that the launch of the second phase of its development next Monday will be as successful as its first.

Cape Verde Development, a company started by Tom Sheehy, a Clonakilty-based property fit-out specialist and backed mainly by Cork and Limerick business people, sold 200 units of its 449-unit scheme off plans when it launched it a few weeks ago, most of them to Irish buyers. Right now, Paradise Beach is 34 acres of white sand bordering a turquoise sea about 10 minutes from Sal international airport. By 2008, Cape Verde Development plans to have built 449 low-rise units. Prices in the mix, that includes apartments, duplex penthouses and villas, range from €120,000 for 202 80sq m (861sq ft) two-bedroom apartments with large balconies up to €299,000 for 10 beachfront 110sq m (1,184sq ft) semi-detached villas and €600,000 for 10 detached beachfront villas with private swimming pools - all these last 10 have already been sold, according to the company.

Communal facilities will include a 32-suite four-star hotel, conference centre, swimming pools, tennis courts, windsurfing, gym, restaurants, bars and 24-hour security. In December, a German-owned health clinic will open nearby.

There is no golf course in the development but three are being built, also nearby. And as Sal is just 30kms long and 12kms wide, pretty much everything is nearby.

The development will have its own back up power generator and water desalinisation plant (drought has been a major problem for Cape Verde, which gets its water by desalinating sea water).

Foreigners can buy property with freehold titleand need to budget for a maximum of 8.25 per cent of the value of their property to cover conveyancing, notary fees and property tax of about 3 per cent, says Sheehy. Maintenance charges should be under €600 a year.

The properties come with fitted kitchens, wardrobes and air conditioning as standard, and complete fit-out packages costing from €7,000 are available through the Cape Verde Development.

The company is in talks with an agency which will arrange lettings for buyers, and is forecasting net returns of 5-6 per cent. Rents could vary from €400 to €800 a week, says Sheehy. A detailed PWC guide to tax implications for Irish buyers is on the company's website.

Getting to Sal is a bit of an ordeal for Irish travellers at the moment - you have to fly via Lisbon or Amsterdam, and it costs about €700 return. But early in the new year, a Cape Verdean-based businessman is promising to start charter flights from Dublin via London which may cost around €500 return, taking about five hours from London.

A quick trip to the internet could well get Irish investors feverish about buying in this new holiday destination, with promises of serious capital appreciation over the years. But potential buyers really should go and look at Sal for themselves first, for it's still a developing country, very different from many holiday destinations.

Uninhabited until discovered by the Portuguese in the 1400s, it was populated by slaves brought from Africa, giving Cape Verde a distinctive Creole culture. (There are nine different Creole dialects on the islands, a mixture of African languages and Portuguese).

Each of its very geographically different islands has quite a distinct history. The capital is in Praia in Sao Tiago, where a second international airport will open next year. The total population of Cape Verde is 400,000.

Sal is small: a flat, sandy island with a desert-like lunar landscape away from the endless stretches of beach, its population is 14,000, most of whom live in Espargos, a dusty town where traders in local mercados sell African crafts to tourists. (And although the local currency is escudos, the euro is readily accepted.)

And as well as that Irish bar - where you can get a local beer for about €1.30 - there are excellent local restaurants serving wonderful freshly-caught seafood. A feast of a meal out with wine will cost about €17 per person.

In some ways, Cape Verde is like Ireland was years ago: it's a recently-independent, politically stable nation with a huge diaspora, from Portugal to the north-eastern United States, and rapid economic growth - based on tourism - tantalisingly within its grasp.

It is extremely serious about education, and determined to learn from other's mistakes. For example, it intends to permit only low rise development and to promote eco-tourism and its own lively Creole culture, according to Maria Rosario de Luz, the adviser to Cape Verde's minister for economic growth.

In the end, though, it's all about weather - and sun starved northern Europeans will probably find this the best reason to take a look at Cape Verde.

www.capeverdedevelopment.com