The Best Zanzibar Real Estate Investments Right Now
Zanzibar is moving into the spotlight. Tourism is breaking records, new global hotel brands are arriving, and more buyers are looking for second homes that also earn strong returns. At the same time, prices on the island are still far below those of Mauritius, Seychelles, and Bali, which makes 2026 an interesting moment for investors who want both lifestyle and income.
If you’re exploring the island for the first time, the range of choices can feel wide - villas, apartments, small hotels, raw land, and more. This guide simplifies the landscape so you can understand which investment types are performing well, what to expect from each, and why certain categories stand out.
Quick Glance: How Each Investment Performs
Below is a simple overview of the seven main real estate investment types you’ll find in Zanzibar.
| Investment Type | Rental Income | Ease of Ownership | Capital Growth | Legal Simplicity | Who It Suits |
|---|---|---|---|---|---|
| Resort & Villa Investments | High, strong ADRs | Easy (if managed) | Strong in prime areas | Clear in ZIPA-approved projects | Lifestyle buyers + yield-focused investors |
| Apartments & Condos | Medium–High | Easy–Moderate | Steady | Clear under the Condominium Act | Buyers seeking lower entry price |
| Boutique Hotels & Lodges | High (if well run) | High complexity | Solid in tourist hubs | More admin required | Experienced operators |
| Commercial & Mixed-Use | Medium | Moderate | Consistent | Straightforward with a local company | Business-minded investors |
| Land (Beachfront / Inland) | None until developed | Low daily effort | High if well located | Requires careful due diligence | Long-term holders |
| Supporting Real Estate (staff housing, storage) | Medium | Moderate | Steady | Clear commercial structure | Purely financial investors |
| Structured Plays (off-plan, JVs) | High potential | Varies | High if timing is right | Depends on agreements | Investors comfortable with development risk |
1. Resort & Villa Investments
This is the category most international buyers look at first, and for good reason. Zanzibar’s tourism growth is heavily led by travellers finishing a safari with a beach stay. These guests tend to spend more, stay longer, and choose higher-quality accommodation.
Typical performance
Strong nightly rates: Luxury villas achieve around US$600–850+ per night, with those under professional management reaching US$1,000+.
Healthy occupancy: As high as 90% is realistic in the high-season based on 2024–2025 performance.
Net returns: Often in the 10–15% range, with top-tier villas such as Sandbank Villas projected to go as high as 17%,
Ownership structure
In government-approved projects, you receive a 33–99 year lease, full resale rights, and the option to apply for residency through property investment. It’s a straightforward path for foreign buyers and very similar to models used in Mauritius and parts of the UAE.
Why investors choose this category
It’s hands-off if you join a rental pool or work with a strong operator
It blends lifestyle and income - you can still use the home
Demand is rising as new flights connect Zanzibar to Europe, the Middle East, and Africa
Where Sandbank Villas fits naturally
Sandbank Villas combines beachfront villas with resort facilities, professional hospitality, and rental pooling - which reduces competition between owners and keeps performance stable. This setup is well aligned with how investors want to own a villa today.
Best for: Buyers seeking something beautiful to enjoy and rely on for strong rental returns.
2. Apartments & Condos
Throughout the island, there are increasing numbers of apartment developments, especially in Paje, Jambiani and Stone Town. They attract:
Digital nomads
Long-stay tourists
NGO staff
Remote workers staying 1–3 months
Typical performance
Projected Yields: 8–12% net, depending on size and location
Occupancy: Often above 45–60% in high-demand areas
Capital Growth: 5–7% per year in prime districts
Ease of ownership
Most new apartment buildings offer optional rental programs. Service charges are predictable, and maintenance is lighter than in larger villas.
Best for: Investors wanting a lower entry point with steady performance.
3. Boutique Hotels & Lodges
Buying or developing a hotel can create strong income, but it’s a hands-on business. This category attracts buyers with operational experience or those ready to hire a full management team.
Typical performance
ADRs vary widely: from US$100–250 for simple lodges to US$500–1,000+ for high-end boutique hotels
The best projects can reach double-digit net returns, but only with strong management
Complexity
Running a hotel means staff, payroll, marketing, food and beverage, and maintenance. It’s not passive - but with the right operator, it can be very attractive.
Best for: Experienced hospitality investors, not first-time buyers.
4. Commercial & Mixed-Use Spaces
Commercial real estate is driven by Stone Town, the airport corridor, and growing coastal neighbourhoods. Demand comes from restaurants, cafés, supermarkets, gyms, and tour companies.
Typical performance
Yields: 12–18% in prime locations
Capital growth: 5–7% per year
Leases often run 2–3 years or longer
Ownership
Foreigners usually buy via a local company with ZIPA registration. It’s a standard process but has more administration than a simple residential unit.
Best for: Investors who want stable, tenant-driven income.
5. Land
Land values rise as new hotels, resorts, and roads appear - and Zanzibar is building more infrastructure each year. However, returns only come when land is developed or rezoned.
Typical performance
No rental income
Capital appreciation is linked to:
Location
Access to utilities
Approved zoning
Prime beachfront sites can grow 5–10% per year, with larger jumps once approvals are secured
Risks
Not all plots have clean paperwork. Due diligence is crucial - survey plans, lease documents, boundaries, renewals, and zoning must all be checked.
Best for: Long-term investors or developers.
6. Supporting Real Estate
These investments cover the practical, behind-the-scenes properties that keep the island’s tourism and retail sectors running, delivering predictable income. These are not guest-facing or lifestyle assets - they’re functional spaces leased by businesses that need reliable facilities. These include:
Staff accommodation
Storage
Cold rooms
Transport depots
Typical performance
Yields: 10–15% depending on tenant
Longer leases
Growth in line with the wider market
Best for: Buyers looking for stable income without a lifestyle component.
7. Structured Investment Plays
This category brings higher return potential but also more risk. It includes:
Buying early in a phased development
Joint ventures with developers
Equity in a project
Lending to developers
Typical performance
Off-plan units can appreciate 5–10% before completion
Equity or financing arrangements can target mid-teens IRRs, depending on structure and timing
These options suit people who understand development or want to take on something more ambitious than a standard purchase.
Best for: Investors comfortable with construction cycles, timelines, and development risk.
Which Investment Type Stands Out in 2026?
Across the board, Zanzibar shows healthy performance - but resort and villa investments continue to lead the market in:
Rental income
Guest demand
Ease of ownership
Long-term value
Why? Because tourism in Zanzibar is moving upmarket. New five-star brands are entering the island, and travellers expect more space, privacy and design - things villas deliver better than hotels.
Explore Sandbank Villas
If you’re looking for a villa that feels special to own but is also easy to manage, Sandbank Villas offers a genuinely hands-off investment. Everything is taken care of while you enjoy the income and the flexibility to use your home when you want:
A fully managed rental program run by an experienced hospitality team
A beachfront location in one of Zanzibar’s highest-performing areas
Luxury resort-grade amenities
Clear foreign ownership through ZIPA
Strong demand from international guests all year
An ownership experience designed to be simple, reliable and enjoyable
You can explore ownership options and request a brochure here: www.sandbankvillas.com