Exotic island for UK investors: 66% return

John and Bronwen Wirncombe never planned to become real estate developers in Zanzibar. In fact, they never even intended to visit the Tanzanian island. The couple ended up on the ancient spice island by accident in 2021, when the British government introduced a "red list" of travel due to the pandemic.

The couple were volunteering in Namibia and faced the prospect of a costly stay in a quarantined hotel when returning to the UK and canceled flights home, so they decided to extend their African vacation by three months. They stayed in Namibia first, then drove across the continent to do safaris in reserves empty of tourists. "We traveled to Botswana, Zambia and Tanzania, and finally decided to''to go to Zanzibar when it got too cold on the mainland,' says Mrs. Wirncombe.

"We came for a month, then thought it would be better to stay a bit longer and decided this might be the place for our country house." The couple, who have never owned property abroad, are halfway through building a four-bedroom villa on a steep cliff with a swimming pool above the coral-white sands of Kiwengwa on Zanzibar's east coast. They had pondered buying property while vacationing in other countries in the past, but as John Wirncombe explains, "When we looked at the amounts, they didn't make sense. "

Their spacious 'sugar cube' villa is set to cost £240,000, including the initial purchase of the land. The couple are financing''their dream home by building nine apartments on a neighboring plot. They have spent £549,000 building these nine properties, which are expected to sell for a total of £911,000 (a 66% profit margin). "We have already sold four of the apartments," Mr. Wirncombe said. "The fifth is under offer. "

They initially placed two-bedroom apartments from €95,000, or about £82,000. A two-bedroom penthouse with a plunge pool and uninterrupted views of the Indian Ocean originally sold for €190,000. Of the apartments still available, the cheapest is priced at €115,000. That's around £100,000 for a two-bedroom property with a communal pool, a two-minute walk from one of Zanzibar's best beaches. Such prices are not overpriced compared to what''available to buy in Zanzibar. Twenty minutes down the road, in the village of Uroa, another developer is selling two-bedroom villas with shared pool for just under £59,000. Away from the beach, near Zanzibar's ancient capital, Stone Town, a three-bedroom duplex with access to a pool and gym is for sale on a pre-order basis for £94,000. Although larger, these properties are unlikely to yield the same return on investment as the ocean view apartments in the exclusive village.

The Italian builder, who also owns a popular letting agency on the north east coast of Kivengwa, has calculated that each average two-bedroom apartment could be rented out for the equivalent of £23,480 a year. Taking into account the commission''rental agencies, plus the cost of cleaning, laundry, utilities and tax, which is 15% for non-residents, that's about £9,000 net profit per apartment after tax.

Of course, traveling to view potential properties or check out your tenants comes with some hassle and expense for the British investor. There are no direct flights to Zanzibar from the UK, which means a flight time of at least 13 hours each way, and there are usually stops in Dubai, Kenya or Turkey.

However, such good profits have made Wirncombe''s investment in Zanzibar, where they have set up a resident rental business in their hometown of Winchester. The couple admits they may have overpaid for land and builders. "But we looked at the margins and thought, yes, we can make money on this," they say.

The reason Wirncombe is reaching out to potential buyers may be due to the potential cash flow from vacation rentals, but the real money in Zanzibar, according to former investment analyst Paul Tellwright, lies in its potential for capital growth.

Tellwright, 43, made about 35,000 pounds in profit when he sold a $75,000 one-bedroom apartment he bought on a pre-order on an adjacent property to the Wirncombs a couple of months later for''120,000 dollars. In contrast, Tellwright had no real estate anywhere in the world before he bought an apartment at Park Village in Kiwengwa. He originally planned to rent the apartment to tourists, but instead decided to sell it and use the money to invest in another project. He and his partners have also bought land elsewhere which they plan to develop in the future. He says one of the plots his company bought for $15,000 eight months ago has already increased in value to more than $40,000.

The nearly 6-acre site is just 400 meters from Jambiani Beach, an up-and-coming resort with boutique hotels, kitesurfing schools, restaurants and bars.

Tellwright, like Wirncombe, had never visited Tanzania before 'saving up' on''Zanzibar in late 2021. The Scotsman, whose mother was born in Northern Rhodesia (now Zambia) and he lived in neighboring Malawi as a child, came with his girlfriend and mother to escape the punitive restrictions on Covid in Dublin, where they then lived.

Zanzibar is full of expats and tourists like him who only discovered its safe and carefree lifestyle during the pandemic. Tanzania was one of the few places on the planet that didn't impose lockdowns or mandatory masks for visitors; its late president, John Magufuli, who held a doctorate in chemistry, chose to follow established pandemic protocols and keep the economy open. As a result, the economy grew throughout 2020 and 2021, while neighbors grew for the first time in more than''s quarter-century entered recession.

Resorts like Paje in the southeast have grown beyond recognition in the past three years, with new construction projects, bars and restaurants extending from the beach to the main road and beyond. Some, like the five-star Nest Hotel, a fantasy of covered walkways and palm-fringed villas, were built by Western tourists who were trapped in Africa when Europe lifted its bridges in March 2020. Others were built by expats who moved to Tanzania to escape restrictions elsewhere.

In Paje, for example, you'll find a huge new complex of 20 Balinese-style villas rising out of the thicket behind the main road. It's the work of Richard Ashby, a London-based estate agent who''had never set foot on African soil before until he came to Zanzibar in mid-2020. His company Shivo has sold all the villas on the property in Paje. They have moved on, selling everything from studio apartments to three-bedroom houses with private pools for around £175,000.

While you'd have trouble buying a two-bed house in Britain for that kind of money, Tellwright says you can build your own property even cheaper. "A friend of mine built an absolutely huge, very high-end, six-bedroom mansion with a swimming pool and an acre of land for $200,000. If you want something very simple, you can build a house here for as little as $25,000. "

Really, you'll meet a lot of people who have gone this''way. At a beach café in Paje, I met Radek "Bond" Bednarzem, who has built a "simple house in the bush" on a £7,800 plot of land near Jambiani. The Polish musician, who lives in a modest coconut house for six months while touring the island with his Afro-fusion band Pamoja Zanzibar, did most of the construction work himself. The same is true on the coast in Pongwe, where Pete Tingle does most of his construction work himself to keep costs down. Tingle, 43, bought a half-acre plot in Pongwe for about 3,900 pounds during his first visit to Zanzibar in August 2020. "In the third week of this vacation, I was shown the plot