Zanzibar Property Investment Haven: A Guide to the Hottest Regions on the Island

Zanzibar has emerged as one of East Africa’s most compelling real estate investment destinations. With sustained tourism growth, expanding infrastructure, and increasing international investor interest, the island presents diverse opportunities across residential, hospitality, and land development sectors. For investors seeking long-term capital appreciation, hospitality development opportunities, or strategic land acquisition, understanding the high-growth regions is essential.

In this guide, we explore five promising investment areas in Zanzibar and why they are attracting serious investor attention.

Why Zanzibar Property Investments?

Zanzibar’s appeal is driven by several core fundamentals:

• Strong tourism growth

• Expanding road and infrastructure networks

• Increasing international flight connectivity

• Rising demand for boutique hotels and residential developments

• Limited prime coastal land supply

  
  

While all land in Zanzibar operates under a leasehold system, investors can secure long-term lease rights (commonly 33–99 years) through approved legal structures.

1️⃣ Paje (Inland Region) – Growth Through Expansion

Paje remains one of Zanzibar’s most dynamic property markets, particularly in its inland zones near the main road and Jambiani border.

Why investors are watching Paje:

• Rapid tourism growth along the southeast coast

• Expanding commercial and hospitality activity

• Increasing demand for staff housing and boutique accommodations

• Road accessibility and proximity to beaches

  
  

Inland plots — while not beachfront — offer significantly lower entry prices compared to coastal parcels, providing stronger margin potential for mid-scale developments.

As infrastructure continues to expand, inland Paje is increasingly viewed as a strategic early-entry location for investors seeking appreciation over the next 5–10 years.

Best suited for:

• Boutique hotel development

• Residential villas

• Staff accommodation projects

• Medium-density tourism developments

  
  

2️⃣ Nungwi – Established Tourism Hub with Expansion Potential

Located on the northern coast, Nungwi is one of Zanzibar’s most mature tourism markets.

Key drivers:

• Strong existing hotel presence

• Consistent visitor demand

• Sunset-facing beaches (rare on the island)

• Expanding hospitality ecosystem

  
  

Nungwi continues to attract investors seeking:

• Hotel acquisition opportunities

• Renovation of existing guesthouses

• High-end villa development

• Hospitality repositioning projects

  
  

While land prices are higher than emerging regions, Nungwi offers reduced risk due to its established tourism base.

3️⃣ Mangapwani – Strategic Coastal Positioning

Mangapwani, located northwest of Stone Town, has attracted attention due to its strategic coastal positioning and discussions around infrastructure expansion.

Why investors are monitoring Mangapwani:

• Proximity to Stone Town

• Growing interest in northern-western coastal development

• Larger land parcel availability

• Quieter, less saturated tourism zone

  
  

As Zanzibar property investments continue, leading to expanding port, marine, and logistics infrastructure, coastal areas near Stone Town may benefit from secondary commercial and residential demand.

Mangapwani presents opportunity for:

• Beachfront hospitality

• Private estates

• Long-term land banking

  
  

4️⃣ Bungi – Infrastructure-Led Appreciation Potential

Bungi sits along a key connecting corridor between central Zanzibar and the east coast.

As road improvements and connectivity projects advance, strategically positioned plots along main access routes often see increased commercial and residential demand.

Infrastructure-led investment areas like Bungi are typically attractive for:

• Agricultural land conversion

• Residential subdivisions

• Commercial roadside developments

• Logistics or service-based projects

  
  

While still early-stage compared to Paje or Nungwi, Bungi may offer lower entry points with upside linked to connectivity improvements.

5️⃣ Stone Town & Periphery – Heritage Meets Commercial Opportunity

Though not mentioned originally, Stone Town and its outskirts deserve consideration.

As a UNESCO World Heritage site, Stone Town:

• Maintains consistent tourist flow

• Supports boutique hotel conversions

• Attracts cultural tourism investors

• Offers renovation and restoration projects

  
  

Opportunities here require careful regulatory compliance but can deliver strong hospitality returns when properly executed.

Zanzibar Property Investment Considerations Before Purchasing in Zanzibar

Before investing, investors should consider:

• Leasehold structure (33–99 years)

• Land registration status

• Zoning and development permissions

• Environmental approvals

• ZIPA requirements (if applicable)

• Due diligence on title and occupancy rights

  
  

Working with experienced legal advisors and licensed real estate professionals is essential to ensure compliant acquisition.

Is Zanzibar the Right Investment Market for You?

Zanzibar may be ideal for investors who:

• Seek emerging market growth

• Understand leasehold systems

• Are interested in tourism-aligned assets

• Can adopt a medium-to-long-term investment horizon

• Want exposure to East African hospitality markets

  
  

Final Thoughts

Zanzibar’s real estate landscape is evolving. As tourism expands and infrastructure improves, strategic early positioning in high-potential regions can provide significant upside.

Whether you are exploring land acquisition, hotel development, or portfolio diversification, Africa Luxury Properties Ltd. can assist you in navigating Zanzibar’s dynamic investment environment.

Contact us to explore current opportunities across Paje, Nungwi, Mangapwani, Bungi, and beyond.