Rasmalé’s Land: Gauging its True Worth

A recent report published on Dhauru valued the 500 hectares of Rasmale’ land included in our partnership with Eagle Hills at USD 24 billion. Based on this figure, the report argued that this land is being given away for virtually nothing and that the State would not recover its value even after a century.

That is a serious allegation, and it deserves a serious response. On one fundamental point, I agree with the report: land is undeniably amongst the most valuable assets the State holds, and every agreement involving it should be assessed against the value it can realistically generate for the public. The difference between us lies in the interpretation of that one word: realistically.

A price for a city that does not yet exist

The USD 24 billion figure is derived from taking Hulhumalé’s current average land price, MVR 7,500 per square foot, and applying it uniformly to every square foot of 500 hectares of newly reclaimed land.

The flaw in that calculation is obvious. Hulhumalé was not worth MVR 7,500 per square foot when it was first reclaimed.

Reclamation began in 1997. The first 1,000 residents moved in only in 2004. By 2018 the number of residents increased to over 50,000, coinciding with the opening of the China-Maldives Friendship Bridge which established a direct road connection between Hulhumale’ and Male’. Serving as Deputy Minister at the time, I was in charge of that bridge project. Hulhumalé’s prices today are the result of more than two decades of public investment: roads, utilities, schools, health care, housing and, from 2018, a connection to the capital.

Rasmalé has none of that yet. It has no bridge, no services and no economic activity. You cannot take a finished city’s price and apply it to an island that is still being built.

A fairer benchmark is Thilafushi: reclaimed land in the same region, where industrial plots have been sold at around MVR 1,750 per square foot. Thilafushi already has businesses operating, and a bridge linking it to Malé is under construction. If anything, it is a generous comparison for Rasmalé as it stands today.

Not every square foot can be sold

A city is not all plots, and Hulhumalé shows how a planned city in our region divides its land. In HDC’s land use plans for Hulhumalé Phases 1 and 2, housing takes 29.84 percent of the land, commercial use including offices 10.2 percent and industry 7.5 percent, coming to a total of approximately 48 percent. Roads, green spaces, sports and recreation take up 29.4 percent, schools, mosques and other institutions 17.5 percent, and municipal services and utilities 5.3 percent.

* Roads are not shown separately. Shares may not add to 100 percent because of rounding.

Planned the same way, Rasmalé’s 500 hectares would have about 239 hectares of housing, commercial and industrial land to sell.

And it can only be sold once it is serviced. Before selling a single plot, the State would have to provide water, electricity, sewerage, roads and other municipal services. Setting up these services for a land spanning 500 hectares, it would cost around USD 1 billion, spent up front.

Where would the billion dollars come from?

This is a challenge I understand through firsthand experience. We have reclaimed hundreds of hectares of land, and only a small part of it has been equipped with municipal services today. Faced with the difficulty of borrowing from abroad, we cannot build those services at the speed people want them.

Gulhifalhu is the clearest example. About 230 hectares of land have been reclaimed there, and developing it needs around USD 400 million of roads and municipal infrastructure. A powerhouse to serve Gulhifalhu will require additional investment. Despite diligent efforts, we have not yet been able to raise that finance — even though the Thilamalé bridge will link Gulhifalhu to Malé.

If we cannot finance USD 400 million for Gulhifalhu, how would we finance USD 1 billion for 500 hectares of Rasmalé, with no bridge to Malé at all?

If we cannot finance USD 400 million for Gulhifalhu, how would we finance USD 1 billion for 500 hectares of Rasmalé, with no bridge to Malé at all?

The arithmetic, with true figures

If the State sold the land itself on the same plan, the best case looks like this:

• 500 hectares is about 53.8 million square feet.
• At about 48 percent, some 25.7 million square feet could be sold as housing, commercial and industrial plots.
• At around MVR 1,750 per square foot, that is about MVR 44.9 billion, or USD 2.9 billion.
• When USD 1 billion for services is factored in, about USD 1.5 billion would remain.

That is the best case: every plot sold, at today’s price, with nothing left unsold.

Comparison: how much of the land the State could sell

Viewed side by side, the figures reveal how the report arrived at its valuation, and how quickly that figure unravels once land use, price and services are considered.

* MVR 403 billion is USD 26.2 billion at the official rate of MVR 15.42; the report states USD 23 billion.

Even under the most generous realistic assumptions, valuing every private plot at today’s market price yields a figure far lower than the USD 3.1 billion the State is projected to receive from its 10 percent revenue share alone, and that is before accounting for the cost of providing a single public service.

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Demand is not unlimited

The report also assumes unlimited demand: that every square foot would find a buyer at today’s price. In reality, land does not sell that way. People buy land where they can live, work or do business, and with no road link to Malé, Rasmalé’s residents would need jobs on the island itself. An economy will not organically grow there without significant investment.

Even Hulhumalé, right next to Malé and the airport, took two decades to become what it is today. Without a bridge, and without the jobs and activity that make people want to live and invest somewhere, it is unlikely the State could sell Rasmalé’s land within 20 years.

The report rightly says that money received over decades is worth less than money in hand today. Yet that principle applies even more forcefully to the alternative of developing and selling the land ourselves: the initial billion dollar investment must be made upfront, while any return is realized only gradually, and is far from guaranteed.

The report calculates that, from property receipts alone, the State would need 298 years to recover the land’s value. But measured against a price this land could never fetch, every option looks like a loss — including selling it ourselves.

The method behind the number

USD 24 billion, 298 years make strong headlines. But a number is only as sound as the method behind it. A figure of USD 24 billion makes a striking graphic; it does not make a valuation.

A figure of USD 24 billion makes a striking graphic; it does not make a valuation.

Whether by haste, ignorance or by design, the report presents a figure that fails the most basic test of land economics.

The method leaves out almost everything that decides what land is worth: the roads and public spaces every city needs, the cost of servicing the land, the time it takes to sell, and whether anyone is there to buy. It even adds the reclamation cost to the market price, but what land cost to make does not add to what it is worth. Urban development is not a multiplication of area by price. And in the real economy, land earns nothing until something happens on it.

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Reclaiming all of Rasmalé, about 1,000 hectares, takes about 39.2 million cubic metres of sand, and reclamation has cost between USD 6 and 10 per cubic metre. Even at the top of that range, the whole of Rasmalé costs less than USD 500 million, and the 500 hectares in the partnership less than USD 250 million.

Scrutiny of this deal is welcome; it contributes to strengthening the final outcome. But estimates presented as fact with this much confidence must meet the same standard of evidence and realism expected of the Government.

What the partnership brings instead

Over the development period, the agreed terms are projected to bring the State:

• A 10 percent revenue share from the master developer: about USD 3.1 billion (MVR 47.8 billion).
• A 4 percent fee on every property transfer, including the first sale: about USD 1.24 billion (MVR 19.12 billion) more.
• GST and TGST on the economic activity the development generates.

The 10 percent share alone, approximately USD 3.1 billion (MVR 47.8 billion), is more than the State could raise by selling every housing, commercial and industrial plot itself, before spending a single dollar on services. It does not depend on the State building a city first and then waiting for buyers. And the 4 percent does not end with the development period. It is paid every time a property changes hands, for as long as the development stands.

Part of the State’s share also comes first, in the form of homes. The developer is funding 5,000 three-bedroom homes in Hulhumalé up front, before Rasmalé earns a single dollar.

The discounting argument, in numbers

The report discounts future money at 5 percent a year. Apply that same rate to both options, and the comparison is not close.

Suppose the State spends USD 1 billion on services over five years, then sells every sellable plot, steadily, over the following 20 years. At 5 percent, that is worth about USD 0.6 billion today. At 9 percent, the rate we use in our housing analysis, it is worth close to nothing.

The partnership’s direct receipts, about USD 4.3 billion spread evenly over the ten-year development period, are worth about USD 3.3 billion today at 5 percent, and about USD 2.8 billion at 9 percent. On the report’s own method, the partnership is worth many times more than selling the land ourselves.

Jobs and growth, when we need them most

What the State collects is only part of the story. The partnership is projected to bring about USD 22 billions of net foreign investment over its life and to create more than 60,000 direct and indirect jobs. At maturity, it is expected to draw about a million visitors a year and over USD 2 billion a year in tourism revenue.

Many of those jobs are ones Maldivians can take while living with their families, in a city where other 500 hectares will be built for local population, rather than on a resort island far from home. Building and running the hotels, homes and shops will bring work to Maldivian contractors, suppliers, transport operators and service businesses.

That activity is what turns reclaimed land into a living city. It is also what our economy needs now: more revenue for the State, less pressure on our debt and our foreign currency, and growth that directly reaches Maldivian households.

“A new lease on every sale”

The report describes the lease arrangement as an indirect sale of land. It is the opposite.

The land is never sold. Eagle Hills sells apartments, villas and other properties on 99-year leases, to buyers approved by the Government. When a property changes hands, the Government must approve the new buyer; it then cancels the old lease and issues a new one, for 4 percent of the value.

In a sale, the State steps away. As opposed to this, here, the State is a party to every transaction, for as long as the development exists. The land’s value returns to the State not once, a century from now, but every time a property changes hands.

Revenue is not profit

The report estimates that Eagle Hills could sell USD 35 billion of villas. Sales are not profit. Out of that revenue must come the cost of building the development — its roads, shore protection, marina and every building — and the risk that buyers come more slowly than anyone hopes. That risk is the developer’s. The State guarantees no revenue and gives no sovereign guarantee.

Those villas will be worth what they sell for because of what is built around them, and because the developer can sell to buyers around the world. That is not a value the land has today.

The report also sets TGST aside because it is not land rent. That is true. But a visitor who comes because Rasmalé exists, and who stays and spends there, is not a visitor we would have had otherwise. Today the State’s tourism income comes mainly from taxes on activity, not land rent: in 2024, TGST raised about five times as much as tourism land rent.

The real choice

The choice before us was never between USD 24 billion and USD 4 billion. The USD 24 billion was never on the table. The real choice was between reclaimed land that waits — for a billion dollars of services we would have to borrow, and for buyers who may never come — and a partnership that starts building an economy now, funds homes first, and pays the State on every sale.

Half of Rasmalé, around 500 hectares, remains for Maldivian families: enough for a population of 200,000 or more. A city of that size needs jobs, and the other half is where they will come from.

Land does not create value on its own. People, services and economic activity do.

Land does not create value on its own. People, services and economic activity do. That is what this partnership is for, and that is the standard by which it should be judged.

Note: Net FDI and job numbers in this article from Project's Economic Impact Assessment carried out by a global research and analytics firm, Evalueserve.

This article was first published on LinkedIn on 30 October 2026.