Investing in real estate in Madagascar: why independent expert appraisal is essential

Madagascar offers significant real-estate investment opportunities, but the Malagasy market has legal and land-tenure specificities that justify engaging an independent Building & Real-Estate Expert before any transaction. Cabinet ExpertImmo, led by Mr RABENIMANANA Normand — on the list of the Compagnie des Arbitres Rapporteurs et Experts Agréés près les Cours et Tribunaux de Madagascar (CAREA) since 1990 — carries out the open-market valuations and real-estate appraisals requested by domestic and foreign investors across Madagascar.

Why does Madagascar attract real-estate investors?

Madagascar, the fourth-largest island in the world, has a diverse property stock and acquisition prices generally lower than those of the real-estate markets of Southern Africa or the Indian Ocean. The capital, Antananarivo, concentrates a significant share of property demand, but other cities such as Toamasina, Mahajanga and Nosy Be also attract investors, particularly in the tourism and hotel sector.

Real-estate investment sectors in Madagascar include upmarket residential property, commercial and office premises, industrial land, agricultural estates and tourism projects. Each type of property has valuation specificities that call for the involvement of an expert trained in these different categories.

What are the specific risks of the Malagasy property market?

Madagascar's property market presents several risks that the investor must identify and manage:

• Land-tenure complexity: Madagascar has several coexisting land-tenure regimes — land title (the State land-registration regime), land certificate (created by the 2005-2006 land reform), and untitled private property. Verifying the legal status of the property is a critical step. The expert documents the nature of the right observed and measures its economic impact on the value adopted; the legal characterisation of the right, however, falls to the notary or lawyer.
• No centralised database: unlike other markets, Madagascar has no public register of property transactions. The CAREA-registered expert draws on their knowledge of the local market — acquired by Mr RABENIMANANA Normand over more than thirty-five years — to establish reasoned comparisons.
• Over-valuation of property: without an independent open-market valuation, the investor risks paying a price above market value. An open-market valuation by a CAREA-registered expert provides a value adopted using recognised methods.
• Planning risks: non-compliance with planning rules, absence of a building permit, undeclared easements. The expert records these elements and measures their impact on the open-market value; the legal handling of non-compliance falls to the legal professions.
• Restrictions applicable to foreign investors: Malagasy land law contains specific rules on acquisition by non-nationals. These rules fall to legal advisers (lawyer, notary), towards whom the firm systematically directs the client.

What does an independent appraisal bring to the investor?

1. An objective assessment of the property's value

The expert on the CAREA list determines the property's open-market value using recognised methods (direct comparison, income capitalisation, replacement cost). This valuation protects the investor against the risk of over-valuation and serves as a basis for negotiation.

2. Comprehensive real-estate due diligence

Independent appraisal includes a technical analysis of the property: examination of the condition of the building, a visual check of planning compliance, and observation of apparent easements and the status of the titles provided. Mr RABENIMANANA Normand combines his CAREA membership with significant experience in general construction, which informs the technical dimension of the valuation. Exhaustive legal verification of the title, mortgage registrations and the seller's capacity, however, falls within the remit of the notary or lawyer.

3. Securing bank financing

Malagasy credit institutions require an open-market valuation report issued by a CAREA-registered expert for any property-loan or mortgage-guarantee file. The reports drawn up by Mr RABENIMANANA Normand meet the requirements usually set by credit committees under the applicable banking regulations.

4. Legal protection

The expert report drawn up by an expert on the CAREA list carries the evidential weight granted to that status under Malagasy law. In the event of a later dispute, the investor has a signed and sealed document attesting to the value adopted on the acquisition date — an element usually produced before the courts.

How the firm works with foreign investors

Cabinet ExpertImmo carries out open-market valuations and real-estate appraisals at the request of foreign investors wishing to value real-estate assets in Madagascar. The practical arrangements are as follows:

• Remote initial contact: the request can be made through the online form on the expertimmo.mg website or by email at the address shown in the legal notice.
• Written fee agreement: a free quotation is issued before any work, followed by a written agreement detailing the services, timeframes and costs.
• Report in French: expert reports are written in French, the official language used before the Malagasy courts and credit committees. An English summary may be appended on request, with no substitutive value relative to the main report.
• Geographical coverage: the firm operates in Antananarivo and, by agreement, in the other provinces of Madagascar.
• Systematic referral to legal advisers: the expert does not deal with the legal characterisation of transactions (regime applicable to foreign nationals, structuring through a Malagasy-law company, long-term (emphyteutic) lease). These questions call for the opinion of a lawyer or notary, whose prior consultation is recommended.

What questions should you ask before investing in real estate in Madagascar?

Before any real-estate investment in Madagascar, the investor benefits from clarifying the following points, relying on the professionals competent for each:

Questions within the scope of real-estate appraisal

1. What is the property's open-market value according to an independent analysis using recognised methods?
2. Is the property, in its apparent state, compliant with the planning rules in force? What is the impact of any non-compliance observed on the value adopted?
3. What is the technical condition of the building, and what refurbishment cost should be anticipated?

Questions for the notary or lawyer

1. Does the property have a land title, a land certificate, or no formal land document? What is the legal scope of the right observed?
2. Is the seller the legitimate owner and do they have the legal capacity to sell?
3. Is the property free of any undeclared mortgage, easement or charge?
4. What legal regime applies to the planned transaction, in particular in the case of a foreign buyer?

Conclusion

Investing in real estate in Madagascar requires a thorough knowledge of the local market and its legal specificities. An open-market valuation by an independent expert on the CAREA list is a tool for securing the investment, for both domestic and foreign investors, in addition to the legal advice provided by the notary or lawyer. Cabinet ExpertImmo, led by Mr RABENIMANANA Normand — a CAREA member since 1990 — has practised real-estate valuation in Madagascar for more than thirty-five years.