Table of Contents
- Executive Summary: The State of Commercial Real Estate in Maldives (2025)
- Market Overview: Key Statistics, Growth Drivers, and Regional Highlights
- Tourism & Hospitality Influence: Impact on Retail, Office, and Mixed-Use Developments
- Regulatory Landscape: Zoning, Property Rights, and Licensing (Refer: planning.gov.mv)
- Foreign Investment Rules & Taxation: Entry Barriers and Incentives (Refer: mira.gov.mv, trade.gov.mv)
- Compliance & Environmental Regulations: Green Standards and Development Approvals (Refer: environment.gov.mv)
- Financing & Lending Trends: Local Banks, International Capital, and Risk Appetite (Refer: mma.gov.mv)
- Major Ongoing and Upcoming Projects: Case Studies from Leading Developers (Refer: hdc.com.mv, mtcc.com.mv)
- Challenges & Risks: Legal, Climate, and Market Volatility Considerations
- Future Outlook (2025–2030): Growth Forecasts, Policy Changes, and Emerging Opportunities
- Sources & References
Executive Summary: The State of Commercial Real Estate in Maldives (2025)
The commercial real estate sector in the Maldives in 2025 is characterized by steady recovery and transformation, following the tourism-led downturn during the COVID-19 pandemic and subsequent rebound. The sector’s performance is closely allied with tourism, hospitality, and the expanding infrastructure development initiatives undertaken by the government. Key drivers have included increased foreign direct investment (FDI), regulatory modernization, and a national focus on sustainable development and resilience against climate risks.
Recent policy reforms have streamlined land leasing and property rights, supporting both Maldivian and foreign investors. The Maldives Inland Revenue Authority governs leasing fees, taxes, and compliance for commercial land, while the Land and Real Estate Authority oversees registration and title security. Notably, regulations now permit foreign freehold ownership of land for projects exceeding USD 1 billion, provided that at least 70% of the land is reclaimed—a significant shift aimed at attracting large-scale investment and development (Invest Maldives).
Commercial real estate comprises hotels, guesthouses, office space, retail, and mixed-use developments, with the Greater Malé Region remaining the commercial hub. According to 2024 data, over 170 resort islands and more than 800 guesthouses were operational, with new developments in the pipeline (Ministry of Tourism). The ongoing expansion of Velana International Airport and infrastructure upgrades under the government’s Strategic Action Plan have further boosted demand for logistics and warehousing facilities (The President’s Office).
Legal compliance remains a high priority, particularly relating to anti-money laundering (AML) and counter-terrorism financing (CTF) requirements enforced by the Maldives Monetary Authority. Environmental regulations and green building incentives are also gaining traction, as outlined by the Ministry of Environment, Climate Change and Technology, reflecting national sustainability targets.
Looking ahead to the remainder of 2025 and beyond, the Maldivian commercial real estate market is positioned for measured growth. The government’s commitment to public-private partnerships, regulatory transparency, and climate-adaptive infrastructure is expected to attract further domestic and international investment. However, challenges remain, including limited land availability, climate vulnerability, and the need for skilled labor. The sector’s outlook is cautiously optimistic, underpinned by strong tourism recovery and sustained policy support.
Market Overview: Key Statistics, Growth Drivers, and Regional Highlights
The commercial real estate sector in the Maldives is undergoing significant transformation as the country diversifies beyond its traditional reliance on tourism. As of early 2025, the sector is characterized by robust growth in hospitality-driven developments, increasing interest in mixed-use projects, and government initiatives to attract foreign investment. According to the National Bureau of Statistics, the construction sector—an indicator tied directly to real estate—grew by 9.6% in 2023, contributing substantially to national GDP. Commercial projects, particularly in the Greater Malé Region, are a major driver of this trend.
Key statistics highlight that foreign direct investment (FDI) approvals reached over USD 500 million in 2024, with a significant portion allocated to hospitality, retail, and office space developments (Ministry of Economic Development). The government’s “Strategic Action Plan 2019-2023,” which continues to guide infrastructure expansion, specifically targets commercial hubs in Hulhumalé and regional airports, creating opportunities for logistics, warehousing, and business services (Ministry of National Planning, Housing and Infrastructure).
Several growth drivers sustain market momentum. First, ongoing investment in integrated resort islands and commercial marina projects is expanding the commercial property landscape. Second, the government’s policies on Special Economic Zones (SEZs) offer tax concessions and streamlined approval processes to international investors, stimulating demand for commercial land and facilities (Invest Maldives). Third, urbanization and a growing expatriate workforce are fueling demand for retail and office spaces, particularly in central urban areas.
Regionally, the Greater Malé Region remains the focal point for high-value office and retail development, but satellite cities like Hulhumalé and Addu City are gaining traction due to infrastructure upgrades and decentralization initiatives (Housing Development Corporation). New commercial zones are emerging around international airports and new ports, with the government actively promoting public-private partnerships for mixed-use and logistics projects.
Looking ahead to 2025 and beyond, the outlook for commercial real estate in the Maldives is positive but contingent on continued policy stability and infrastructure development. The government’s commitment to sustainable urbanization and diversified economic growth is expected to support steady expansion in commercial real estate, while regulatory reforms and digitalization in land registration and permitting are anticipated to enhance compliance and investor confidence (Land and Survey Authority).
Tourism & Hospitality Influence: Impact on Retail, Office, and Mixed-Use Developments
The Maldivian commercial real estate sector is intrinsically linked to the country’s robust tourism and hospitality industry, which continues to be the bedrock of its economic growth. In 2025, tourism’s influence is extending beyond resort developments, increasingly shaping the demand, design, and location of retail, office, and mixed-use properties. As international arrivals rebound and diversify post-pandemic, there is a corresponding uptick in supporting infrastructure and commercial space requirements.
Retail spaces in Malé and key atolls are experiencing renewed interest, driven by the need to cater to both tourists and the expanding expatriate workforce. The Ministry of Tourism’s official statistics show that tourist arrivals surpassed 1.8 million in 2023 and are projected to grow further in 2025, sustaining high demand for retail outlets, F&B, and entertainment venues within mixed-use developments (Ministry of Tourism). Shopping arcades, duty-free stores, and local craft outlets are increasingly integrated into new resort and urban mixed-use projects to capitalize on visitor spending habits.
The office real estate segment, traditionally limited in scope due to the Maldives’ service-oriented economy, is being redefined by the proliferation of international hospitality groups, travel operators, and ancillary services establishing regional headquarters or support offices in Malé and Hulhumalé. The government’s vision for economic diversification, articulated in the Ministry of National Planning, Housing and Infrastructure’s strategic plans, is prompting a gradual shift toward more formalized office spaces, especially within mixed-use buildings that serve both commercial tenants and hospitality operators.
Legal and compliance frameworks are adapting to these changes. The Land Act (Law No. 1/2002) and associated regulations set out land use and leasing procedures for commercial developments, while foreign investment is governed by the Foreign Investment Act (Law No. 25/79) and administered by the Ministry of Economic Development. Recent government initiatives encourage foreign participation in mixed-use projects, provided local partnership and compliance thresholds are met. Environmental Impact Assessments (EIA), mandated under the Environmental Protection and Preservation Act (Law No. 4/93), are crucial for all large-scale and waterfront developments (Ministry of Environment, Climate Change and Technology).
Outlook for 2025 and the following years indicates sustained growth in commercial real estate, underpinned by continued tourism expansion and policy support for integrated developments. Investors are expected to prioritize flexibility and resilience, factoring in climate adaptation and evolving consumer preferences. The regulatory environment is likely to see incremental tightening around sustainability and foreign ownership, but the commercial real estate sector remains a dynamic beneficiary of the Maldives’ tourism-driven transformation.
Regulatory Landscape: Zoning, Property Rights, and Licensing (Refer: planning.gov.mv)
The regulatory landscape governing commercial real estate in the Maldives is shaped by an evolving framework of zoning laws, property rights statutes, and licensing regimes. These regulations are primarily overseen by the Ministry of National Planning, Housing and Infrastructure, which is responsible for land use planning, urban development, and the implementation of relevant legal instruments.
Zoning in the Maldives is stipulated through national and local land use plans, which designate specific areas for commercial, residential, mixed-use, and tourism-related development. The Malé City Development Plan and the Greater Malé Region Planning Framework, for example, set out development densities, building heights, and permitted commercial activities in urban and reclaimed zones. The government has increasingly emphasized mixed-use projects and urban densification, reflecting both limited land availability and growing demand for commercial space in central areas. Developers must obtain zoning clearance and adhere to detailed planning standards before commencing construction or occupancy of commercial premises.
Property rights in the Maldives are uniquely structured, as all land is legally owned by the state. Private and corporate entities, including foreign investors, may obtain long-term leases—most commonly up to 99 years—for commercial purposes. These leasehold rights are regulated under the Land Act and relevant lease agreements, stipulating permissible land use, transfer conditions, and renewal protocols. The recent amendments to state land lease regulations have streamlined the transfer and sub-leasing of commercial properties, facilitating greater liquidity and investment flows in the sector. However, foreign ownership of land remains prohibited, except in cases where significant investment thresholds are met in the tourism sector, subject to cabinet approval.
Licensing is a critical component of regulatory compliance. All commercial real estate developments require project approval, environmental clearance, and an operating license from the Ministry of National Planning, Housing and Infrastructure. This includes adherence to planning codes, building regulations, fire safety standards, and accessibility requirements. For certain sectors, such as retail, hospitality, and food & beverage, additional sector-specific permits may be required from respective ministries or authorities.
Looking ahead to 2025 and beyond, the Maldivian government is expected to further refine zoning policies and digitalize the application processes for planning and licensing. The adoption of smart urban planning tools and the ongoing review of the Land Act are likely to enhance transparency, compliance, and investor confidence in the commercial real estate market. The continued push for sustainable and resilient urban development, particularly in response to climate adaptation needs, will further shape the regulatory environment in the coming years.
Foreign Investment Rules & Taxation: Entry Barriers and Incentives (Refer: mira.gov.mv, trade.gov.mv)
The regulatory framework governing foreign investment in the Maldivian commercial real estate sector is defined by a combination of national laws and agency-driven policies aimed at balancing openness with economic sovereignty. The Maldives Inland Revenue Authority (MIRA) and Ministry of Economic Development act as central authorities overseeing compliance, taxation, and licensing for foreign investors.
Foreign ownership of land is constitutionally restricted in the Maldives; outright freehold for foreigners is not permitted. However, under the 2015 amendments to the Maldivian Constitution, foreign investors can acquire land for projects exceeding USD 1 billion, provided at least 70% of the land is reclaimed from the sea (Ministry of Economic Development). In practice, most commercial real estate transactions involving foreigners, especially in the hospitality sector, take the form of long-term leases—typically up to 99 years. These leases are registered and regulated through the Ministry of Tourism or Ministry of National Planning, Housing and Infrastructure, depending on the asset type.
Taxation for foreign investors in commercial real estate is primarily regulated through the Business Profit Tax Act and the Goods and Services Tax (GST) regime. The standard Business Profit Tax rate is 15%, while a 6% GST applies to real estate transactions not related to tourism, and a 12% GST applies to those within the tourism sector (Maldives Inland Revenue Authority). Lease rentals for islands or land used for tourism, a major component of commercial real estate, are subject to fixed and variable fees as set out by the authorities. Foreign investors must also comply with Withholding Tax requirements on certain cross-border payments.
To attract investment, the government offers several incentives: 100% foreign ownership in most sectors (excluding land ownership restrictions), full repatriation of profits, and exemptions or reductions on import duties for construction materials and equipment linked to approved projects (Ministry of Economic Development). The Special Economic Zones Act further provides enhanced incentives for large-scale projects, including tax holidays and streamlined licensing for developments meeting specified thresholds.
In 2025 and the coming years, the government’s continued infrastructure drive—especially in greater Malé and designated economic zones—is expected to spur demand for commercial real estate. However, entry barriers remain notable for foreign investors, particularly regarding land tenure and compliance with evolving environmental and planning regulations. Investors are advised to maintain rigorous due diligence and stay current with compliance updates from MIRA and the Ministry of Economic Development, as regulatory adjustments are anticipated in line with national development priorities.
Compliance & Environmental Regulations: Green Standards and Development Approvals (Refer: environment.gov.mv)
Compliance with environmental regulations has become an increasingly central component of commercial real estate development in the Maldives, especially as the country faces acute vulnerability to climate change and sea level rise. As of 2025, all commercial real estate projects—particularly those in tourism, hospitality, and mixed-use sectors—are subject to rigorous approval processes overseen by the Ministry of Environment, Climate Change and Technology (MoECCT). These processes are designed to ensure that new developments adhere to national environmental standards and international sustainability commitments.
A cornerstone of regulatory compliance is the Environmental Impact Assessment (EIA), mandated under the Environmental Protection and Preservation Act (Law No. 4/93). Developers must submit detailed EIAs prior to commencing construction, outlining the potential environmental impacts and proposed mitigation measures. The EIA process includes public consultation, technical review, and, where necessary, site inspections. Only after receiving formal Environmental Clearance from the MoECCT can projects proceed to subsequent approval stages.
In recent years, the Maldivian government has strengthened its focus on green building standards, with new guidelines promoting energy efficiency, renewable energy integration, and sustainable waste management in commercial properties. Notably, the Maldives is implementing building codes that require resorts, hotels, and large-scale commercial establishments to incorporate solar photovoltaic systems, rainwater harvesting, and waste-to-energy technologies wherever feasible. The government also encourages the adoption of Leadership in Energy and Environmental Design (LEED) or equivalent certifications for major developments.
Compliance enforcement has intensified, with regular site audits and monitoring programs now standard practice. Failure to comply with EIA conditions or environmental regulations can result in project suspensions, fines, or even license revocation by the Ministry of Environment, Climate Change and Technology. In 2024, the Ministry reported a significant rise in the number of environmental audits and compliance checks across tourism zones and urban commercial hubs.
Looking ahead, the outlook for commercial real estate in the Maldives is closely tied to the country’s ambitious sustainability agenda. Policymakers are working on further tightening development control regulations, expanding protected areas, and introducing incentives for green-certified projects. As investor and stakeholder expectations for environmental responsibility continue to grow, compliance with evolving green standards will remain a key determinant of project viability and long-term commercial success in the Maldivian real estate sector.
Financing & Lending Trends: Local Banks, International Capital, and Risk Appetite (Refer: mma.gov.mv)
The financing landscape for commercial real estate in the Maldives is evolving, driven by domestic monetary policy, changing risk appetites, and emerging international interest. Local banks remain the primary source of debt financing for property developers and investors, with major institutions like the Bank of Maldives and Maldives Islamic Bank offering a range of commercial property loans. The Maldives Monetary Authority (MMA) has maintained a cautious regulatory approach, balancing credit growth with financial sector stability. As of early 2025, the aggregate loan portfolio of Maldivian banks to the real estate sector has shown steady growth, reflecting sustained demand for hotel, resort, and mixed-use developments. According to the Maldives Monetary Authority, real estate and construction accounted for approximately 20% of total outstanding bank credit at the end of 2024, underlining the sector’s significance within the broader economy.
Recent policy developments have focused on strengthening risk management and due diligence requirements for real estate lending. The MMA’s prudential regulations require banks to conduct thorough credit risk assessments, maintain adequate collateralization, and comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) obligations. In 2023 and 2024, the MMA issued updated circulars reinforcing these compliance standards, particularly for high-value transactions and foreign-owned projects. The regulatory climate is expected to remain vigilant in 2025, with periodic supervisory reviews and stress-testing of banks’ exposure to property sector risks (Maldives Monetary Authority).
International capital, primarily from Asia and the Middle East, continues to play a pivotal role, especially for large-scale hospitality and mixed-use projects on leased islands. However, foreign direct investment is subject to approval by the Ministry of Economic Development and must comply with the Foreign Investment Act, which stipulates minimum investment thresholds and local participation requirements. Recent years have seen a gradual uptick in joint ventures between Maldivian firms and overseas investors, often backed by international banks or development finance institutions. However, foreign lenders face additional compliance hurdles, including local registration and adherence to currency regulations governed by the MMA (Maldives Monetary Authority).
Looking ahead to 2025 and beyond, the outlook for commercial real estate financing in the Maldives is cautiously optimistic. While local banks are expected to maintain selective lending standards, government initiatives to attract sustainable investment and diversify the tourism sector may broaden funding sources. Nonetheless, ongoing global economic uncertainties and heightened regulatory scrutiny will continue to shape risk appetite and lending practices in the sector.
Major Ongoing and Upcoming Projects: Case Studies from Leading Developers (Refer: hdc.com.mv, mtcc.com.mv)
The commercial real estate landscape in the Maldives is being significantly shaped by a series of major ongoing and upcoming projects, spearheaded by leading state-owned and private developers. These projects are integral to the government’s broader economic diversification and urbanization strategies, particularly around the Greater Malé Region and strategic atolls.
One of the flagship developments is the Hulhumalé urban expansion project, managed by the Housing Development Corporation (HDC). Hulhumalé, envisioned as a “Youth City,” is a reclaimed island being developed to alleviate congestion in Malé and to serve as a commercial and residential hub. The ongoing Phase II of the project includes the construction of mixed-use commercial towers, business parks, retail centers, and hospitality facilities. In 2024–2025, HDC has prioritized parcels for corporate headquarters, technology parks, and logistics centers, with several international hotel and retail chains securing long-term leases. The planned “Central Park Commercial District,” for example, is set to offer over 150,000 square meters of leasable commercial space by 2026.
Another influential player is the Maldives Transport and Contracting Company (MTCC), which is driving infrastructure projects that underpin commercial real estate growth. MTCC is currently executing the reclamation and infrastructure development for the Thilafushi Industrial Zone, a key node for warehousing, logistics, and light manufacturing. Thilafushi’s upcoming commercial developments are designed to support the burgeoning marine, trade, and manufacturing sectors, with dedicated plots for factories, bonded warehouses, and office complexes. As of early 2025, MTCC reports that over 60% of the planned 150 hectares of commercial land are either under construction or have been pre-leased to local and foreign investors.
In the pipeline, HDC is also advancing the Hulhumalé Business Ventures Project, targeting the establishment of fintech headquarters and innovation labs, in line with the government’s digital transformation agenda. This project is set to attract both multinational corporations and local start-ups, providing Grade-A office space and business incubation facilities.
Compliance and regulatory oversight for these projects fall under the purview of the Ministry of National Planning, Housing and Infrastructure and the Ministry of National Planning, Housing and Infrastructure – Land Division, which mandate adherence to urban planning, environmental guidelines, and sustainable development goals. These authorities ensure that commercial real estate projects align with national land use plans and environmental impact assessment requirements.
Looking ahead to 2025 and beyond, the successful execution of these major projects is expected to substantially increase Grade-A commercial space, diversify the investment base, and catalyze the Maldives’ emergence as a regional commercial hub. The commitment of HDC and MTCC to sustainable, large-scale development signals a robust outlook for commercial real estate in the coming years.
Challenges & Risks: Legal, Climate, and Market Volatility Considerations
The commercial real estate sector in the Maldives faces a unique set of challenges and risks, shaped by its legal framework, environmental vulnerabilities, and market dynamics. As of 2025, investors and operators must navigate a complex environment to ensure compliance and long-term viability.
Legal and Regulatory Risks: The Maldivian legal system is rooted in Islamic law, with property rights and land use governed by a combination of statutory regulations and administrative decrees. Foreign ownership of land remains prohibited, except under special circumstances such as long-term leases for tourism-related investments, as specified by the Maldives Land Act and the Ministry of Economic Development. Commercial real estate projects often require multiple layers of approval, including environmental impact assessments, lease agreements, and compliance with local zoning laws.
The government continues to refine regulations to attract foreign direct investment while maintaining national interests, as evidenced by recent amendments to the Special Economic Zones (SEZ) framework and investment incentives. However, the lack of clarity in land tenure, lengthy approval processes, and evolving regulations can pose legal uncertainties for investors Ministry of Economic Development.
Climate Risks: The Maldives is one of the world’s most climate-vulnerable nations, with over 80% of its land area less than one meter above sea level. Commercial real estate is at heightened risk from coastal erosion, flooding, and extreme weather events. The Ministry of Environment, Climate Change and Technology emphasizes the need for climate-resilient infrastructure and adherence to strict environmental standards in construction and operation. New developments increasingly require robust adaptation strategies, such as elevated structures and advanced drainage systems, to mitigate the impact of rising sea levels.
Market Volatility: The Maldivian commercial real estate market is heavily reliant on tourism and hospitality, making it sensitive to global economic shifts, pandemics, and geopolitical events. The recovery from COVID-19 has seen a rebound in demand for resort and hotel properties, but the sector remains vulnerable to fluctuations in international arrivals and investment flows. According to the National Bureau of Statistics, foreign investment approvals in tourism and real estate showed moderate growth in 2023–2024, but investor sentiment remains cautious due to global uncertainty.
Outlook: Moving into 2025 and beyond, the commercial real estate sector in the Maldives will need to address these intertwined risks through legal due diligence, climate adaptation, and diversification strategies. Stakeholders are increasingly required to demonstrate compliance with evolving regulations and environmental standards to secure project approvals and maintain long-term asset value.
Future Outlook (2025–2030): Growth Forecasts, Policy Changes, and Emerging Opportunities
The commercial real estate sector in the Maldives is anticipated to undergo significant evolution between 2025 and 2030, driven by policy reforms, infrastructure investments, and the country’s ongoing effort to diversify its economy. The government’s Vision 2030 framework emphasizes sustainable urban development, improved investment climate, and expansion beyond tourism-centric assets, opening up new avenues for both domestic and foreign investors.
A primary driver is the government’s commitment to enhancing business infrastructure, as outlined in the Maldives National Trade Integration Strategy. The strategy prioritizes the establishment of Special Economic Zones (SEZs), logistics parks, and mixed-use developments to attract regional headquarters, logistics firms, and fintech companies. These initiatives are bolstered by the Special Economic Zones Act, which provides streamlined licensing, tax holidays, and land-use incentives to qualifying commercial real estate projects.
Recent amendments to the Land Act and the Uninhabited Islands Act have clarified leasehold rights and extended permissible lease durations for non-citizens, improving legal certainty for international investors. These changes are complemented by the Maldives Inland Revenue Authority’s ongoing tax compliance modernization, with digital land registry and transaction systems expected to be fully operational by 2026, thereby reducing transaction risks and increasing transparency.
Key statistics indicate robust momentum: according to the National Bureau of Statistics, the total value of commercial property transactions grew by 14% in 2023, with office and retail segments leading due to post-pandemic recovery and increased foreign direct investment. The Greater Malé Region continues to attract the lion’s share of activity; however, regional hubs such as Addu and Hulhumalé are emerging as new frontiers due to infrastructure upgrades and connectivity improvements.
Looking ahead, growth is expected in mixed-use developments, logistics hubs supporting the transshipment and fisheries sectors, and business parks targeting fintech and professional services. Policy signals suggest further liberalization, with potential updates to foreign investment restrictions and environmental compliance standards under discussion by the Ministry of Economic Development and Trade. The commercial real estate outlook for 2025–2030 is therefore positive, with opportunities expanding in tandem with regulatory modernization and economic diversification.
