The Maldives, long revered as a paradise getaway among high-end and discerning travelers, is increasingly getting the attention of hotel investors involved in the Asian market. The beautiful environment, geographic proximity, and exotic draw of this destination has many flocking to the low-lying atolls of the Maldives (including our Editor in Chief, Wimintra, who recently visited).
Investing in a unique location such as the Maldives raises questions—the market is still changing rapidly, and while there are major opportunities ahead for Asian investors, there are risks. Brian Greco corresponds with Ghaly Murthala, Managing Director of Morteza Capital based in the Maldives, to take a closer look at hotel investment in this Indian Ocean destination.
B: “What are you and your company up to in the Maldives right now?”
G: “Morteza Capital is the first institutional hotel investment platform with a primary focus on the Maldives. Morteza is essentially a one-stop solution for hotel owners and investors in the Maldives, providing investment management, development, advisory and asset management solutions. The company was born out of a need for professional hotel investment related services to keep up with the dynamics of an increasingly mature and international destination such as the Maldives.”
B: “Is there an increasing interest for Maldivian hoteliers and investors to grow their base in Asia and if so, why?”
G: “Asia is home to some of the world’s most interesting holiday destinations and economic powerhouses. Considering the current geopolitical climate in more traditional destinations, I believe that hoteliers and investors are interested in exploring opportunities in more exotic markets.”
B: “How has the Maldives market changed in the past 5 years and where do you see it going?”
G: “The hotel market in the Maldives is seeing some dynamic changes at the moment. Typically known as romantic honeymoon destination known for its one-island-one-resort concept, we are now seeing some diversification in the form of integrated resorts coming up with integrated retail and entertainment components. A key reason for the increased size and scale of developments is that the Maldives is attracting capital from international institutional and UHNW investors, and the development of infrastructure within the Maldives to be able to accommodate large projects.”
B: “What are some of the logistical challenges of investing and building in the Maldives? Energy, transport, sanitation, food?”
G: “In terms of the investment framework, it is quite easy to do business in the Maldives, especially for hotel investors. Development in remote islands is of course a challenge, however the Maldives has perfected its resort development process over 4 decades, which has enabled the development of knowledge, experience and services to minimize their development risk for investors.”
B: “What is your take on the issue of climate change and sea levels rising in terms of the longevity of Maldives investments?”
G: “It cannot be disputed that the Maldives remains vulnerable to climate change. However, it is precisely due to this vulnerability that the country is at the forefront of adapting new measures and technology to mitigate the effects of such occurrences. That being said, from purely an investment perspective, typical investment horizons for hotel investors are far shorter than the length of time in which the Maldives could potentially see adverse effects of climate change and sea level rise.”
B: “Anything else you’d like to include?”
G: “Markets such as the Maldives are often mistakenly seen by investors as disproportionately risky, however this perception is primarily due to the ambiguity of investing in such destinations. We believe that we can make destinations like the Maldives more accessible to investors by being a platform to reduce uncertainty and risk, and providing execution capabilities in a largely informal market.”
Hotel Intel aims to stay on the forefront of news and industry trends in Maldives investment and beyond. Thank you again to Ghaly Murthala of Morteza Capital for insights on this fascinating and beautiful part of the world. Learn more at mortezacapital.com.