Zanzibar's coastal boom: tourism is rewriting the investment case

Few markets in the region have moved as fast as Zanzibar. Record tourism and a friendlier investment regime have turned the archipelago into one of East Africa's most compelling property stories, and short-stay is at the centre of it.

Tourism is the engine

Zanzibar welcomed over 917,000 international visitors in the latest year, a jump of around 25 percent. That surge flows straight through to real estate: occupancy, nightly rates and ultimately capital values. Annual price appreciation of 5 to 7 percent is now routine across the islands, with prime beachfront in areas such as Nungwi and Jambiani rising faster still.

Yields that stand out

For income investors, the numbers are striking. Gross returns of 12 to 15 percent are achievable on well-run holiday lets in Paje and Nungwi, while characterful Stone Town apartments still clear a healthy 6 to 8 percent. The difference between those outcomes and a disappointing one almost always comes down to management.

A more open market

Recent investment reforms have introduced grace periods on ground rent and, within approved schemes, full foreign ownership, removing two of the biggest hesitations for diaspora and international buyers.

How Terranova operates here

We are short-stay specialists. In Zanzibar we operate The Train's House, a boutique apartment property with its own restaurant and coworking space, alongside other serviced homes. From dynamic pricing and channel management to housekeeping and 24/7 guest support, our job is to turn the island's tourism momentum into reliable returns for owners.