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The Industrial Development Corporation (IDC) is looking to entice investors to invest alongside it in Lux-Isle, an ultra-luxury private island resort in the Topuito Isles, Mozambique, which is positioning itself as a high-end tourism destination. In a move likely to pique the interest of South Africa’s hospitality groups, the IDC has alerted the market that it is looking for an entity that will be a strategic equity partner in a project that entails the development of a 5-star, 60-key resort, comprising 40 keys on Caldeira Island (13.5ha) and 20 keys on Nejovo Island (6.74ha). In its expression of interest document, the IDC states the potential partner will support the completion, launch and long-term operational success of the ultra-luxury island resort, which is expected to open its doors next year.“The unique island location offers all-year-round warm waters and stable weather conditions and provides airport access in Mozambique’s third-largest city, Nampula. The resort will be Southern Africa’s first globally branded five-star ultra-luxury private island destination,” the IDC said.“The surrounding areas offer diverse offshore activities and rich cultural experiences, making it an exceptional destination for high-end tourism. The resort is currently under construction. It is expected to be completed and operational from 2027.”About $26m [R430m] has been spent on the project so far, with the equity investor expected to shell out $20m [R330m]. The resort will be Southern Africa’s first globally branded five-star ultra-luxury private island destination.— IDC“Revenue will primarily be earned from villas as well as food, spa, and beverages. The average daily rate is projected to start at $725 [R12,000] and estimated to increase by an average of 2% year on year until 2036,” the IDC said.“The occupancy rates are estimated to start at 48% and increase by an average of 2.4% from 2027 until 2030 when it then steadies at 60%.“Gross profit is projected to increase by 92% from FY2027 to FY2028, which is primarily driven by the 27% increase in revenue as the market is penetrated, while the cost of sales increases by 8%. Thereafter, gross profit is projected to increase by an average of 5% as revenue stabilises to an average of 3%.”The Mozambique government has set a lofty target of growing tourism’s contribution to GDP to about 6% in the medium term, supported by infrastructure upgrades, improved air connectivity and destination development.The country’s tourism sector has attracted a lot of investment over the years. Swiss-based Aman Group, a multinational luxury hospitality company founded by Indonesian hotelier Adrian Zecha, last year launched its first resort in Sub-Saharan Africa, in Mozambique.Several of South Africa’s hospitality groups, including Southern Sun, City Lodge and Tsogo Sun, have a presence in Mozambique.The IDC has significant exposure to Mozambique via its stake in Sasol and interest in Mozal Aluminium. Business Day reported last month that the IDC is weighing options to buy South32’s majority stake in Mozal to revive the smelter, which was placed in care and maintenance in March after it failed to strike a tariff relief deal with Eskom.The IDC has a 31.4% stake in Mozal, while Australia-headquartered South32 holds a controlling 63.7% stake and the government holds a 3.9% stake through preference shares.Mozambique is South Africa’s largest trading partner on the continent.
