On 21 September 2026, the Government of Maldives and Eagle Hills, a property developer based in Abu Dhabi, signed an agreement on the main commercial terms of Maldives Waterfront and Marina. The project will bring hotels, homes, a marina, shops, schools and health facilities to reclaimed land in Ras Malé. The Ministry of Infrastructure, Housing and Urban Development says the full project could reach about USD 20 billion over several phases.
The most debated part of the announcement is how homes will be sold. Eagle Hills' version of the announcement says homes will be offered on leases of up to 99 years, and that each time a home is sold or inherited, a new lease of up to 99 years will begin. This is often called a "rolling lease".
Critics have described this as "99 years with unlimited resets" and argue that it weakens national control of land. The Minister of Finance and Public Enterprises, Hassan Zareer, has said that not a single inch of land will be sold, that the project uses the same 99-year lease system already used for resort islands, and that the pledge by His Excellency Dr Mohamed Muizzu, President of the Republic of Maldives, not to sell Maldivian land to foreigners still applies.
This article makes a different argument from the one most often heard. A rolling lease is not a threat to development. When it is designed well, it is one of the tools that makes long-term development possible, while the land itself stays with the State. The sections below explain why, step by step, and then describe the conditions that the final agreement should meet, together with the concerns critics have raised.
Step one: owning land and leasing land
There are two main ways to hold land.
The first is full ownership, which lawyers call "freehold". The owner holds the land with no end date and can leave it to their children for ever.
The second is a lease. A lease gives a person the right to use land for a fixed number of years. The land still belongs to someone else, called the landlord. When the lease ends, the land returns to the landlord, usually with any building on it.
Article 251 of the Constitution says that no foreign person or company may own any part of Maldivian land. It allows land to be leased to foreigners, but for no more than 99 years. This is why every foreign investment in land in the Maldives, from resorts to Ras Malé, uses a lease, and why the landlord is always the State.
Step two: the problem that holds development back
An ordinary lease becomes shorter every year. As the years left become fewer, the property becomes worth less to the next buyer, because the next buyer receives fewer years of use.
This loss of value is small at first and large near the end. People value years close to today much more than years far in the future, so the early decades of a lease carry most of its value. Singapore, where most homes are held on 99-year leases from the government, has used an official table for decades to measure this. The table, known as Bala's Table, shows the value of a lease compared with full ownership of the same land:
- a new 99-year lease is worth 96 per cent of full ownership;
- with 60 years left, it is worth 80 per cent;
- with 30 years left, it is worth 60 per cent;
- with 10 years left, it is worth 30 per cent.
Property experts call this "lease decay". It matters for development in three ways.
It lowers what buyers will pay. Buyers know a lease will lose value, so they pay less at the start and less again at every resale. Lower prices mean less money is available to pay for roads, power, water, sewerage and public spaces.
It makes bank loans harder to obtain. Banks want a long lease to remain after a loan is repaid. As a lease becomes shorter, banks lend less or refuse to lend. Fewer buyers can borrow, so sales become slower and prices fall further.
It discourages owners from maintaining buildings. An owner with only 20 or 30 years left has little reason to spend heavily on repairs or improvements, because the benefit will return to the landlord. Over time, this can leave older buildings poorly maintained.
These are not theoretical risks. In England and Wales, where many flats are held on leases, extending a lease became much more expensive once fewer than 80 years were left, and owners of such flats found them difficult to sell. Parliament responded with the Leasehold and Freehold Reform Act 2024, which allows lease extensions of 990 years and removes the extra charge, although not all parts of the law are yet in force. In Singapore, owners of older buildings who wish to redevelop together must pay the government to restore a full 99-year lease.
Step three: how a rolling lease solves the problem
A rolling lease starts the clock again each time a home changes hands.
Here is a simple example. An investor buys an apartment in 2030 and receives a 99-year lease, ending in 2129. In 2055 the investor sells the apartment.
- Under an ordinary lease, the new buyer would receive only the 74 years that remain, and would pay a lower price because of it.
- Under a rolling lease, the new buyer would receive a new lease of up to 99 years, ending in 2154.
The same would happen if the owner died and a child inherited the apartment.
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See the project (opens in a new window)On Singapore's table, a lease with 74 years left is worth about 88 per cent of full ownership, compared with 96 per cent for a new lease. With 40 years left, it would be worth only 68.5 per cent. The rolling lease removes this gap at the moments that matter most: when a home is sold or passed to the next generation.
Each individual lease still lasts no more than 99 years, which is why the government says the arrangement follows the Constitution. The land itself remains the property of the State at all times.
Step four: how a rolling lease strengthens development
Removing lease decay does more than protect individual buyers. It supports the whole development in six ways.
It pays for the city, not only the buildings. The Minister of Infrastructure, Housing and Urban Development, Dr Abdulla Muththalib, has argued that reclaiming land is the cheaper part, and providing it with services is the expensive part, and that the real waste is reclaimed land left empty for years. Roads, utilities, schools and clinics are funded largely from property sales. When homes hold their value, sale prices are higher and steadier, and more money is available for this basic infrastructure.
It makes bank lending possible. Because the lease never becomes short, banks can predict the value of a home over the full life of a loan. This allows mortgages, widens the pool of buyers and makes sales faster. Faster sales allow a large project to progress from one phase to the next. According to the Maldives Independent, Eagle Hills' chairman said the project would be built in five districts, in line with demand.
It encourages owners to maintain and improve their buildings. An owner whose lease will always be renewed at the next sale has a reason to keep the property in good condition, because the full value of that work stays with the property. This supports well-kept buildings over many decades.
It attracts long-term residents rather than short-term speculators. For many buyers of homes and second homes, the ability to leave a property to their children is a main reason to buy. A rolling lease meets that need. Families who plan to stay for generations tend to invest in their community, use local services and employ local people.
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Open the tracker (opens in a new window)It creates a steady income for the State. According to Dr Muththalib, the State will receive 4 per cent of the value of every property sale, a 10 per cent share of the main developer's revenue, and the Tourism Goods and Services Tax (T-GST) on tourism activity in the development. The rolling lease and the 4 per cent charge work together: every sale renews the lease, and every sale pays the State. A healthy resale market therefore becomes a recurring source of public revenue, not a one-time payment.
It meets investor needs without foreign ownership. In 2015, parliament changed the Constitution to allow foreigners to own land in very large projects, partly because investors wanted land they could leave to their heirs. That change was cancelled by a unanimous vote in April 2019. A rolling lease gives investors the long-term security they seek while keeping the constitutional ban on foreign ownership fully in place.
Step five: what the State keeps
A common concern is that a lease which keeps restarting takes land away from future generations. It helps to separate two questions: money and control.
On money, the State loses very little. Money received far in the future is worth much less than money received today, because money today can be saved or invested and grow each year. Singapore's table assumes a growth rate of about 3.5 per cent a year. On that basis, one dollar of land value that returns to the State after 99 years is worth only about 3.3 cents today. In other words, even an ordinary 99-year lease already gives the buyer about 96 to 99 per cent of the land's value today. (Calculations by Good Morning Maldives (GMM).) Under a rolling lease, the State forgoes that small remaining share, and in return receives 4 per cent of the value of every future sale, which over decades of resales is likely to be worth considerably more.
On control, the State keeps its most important powers. The land is never sold. Maldivian law applies at all times. The State decides planning rules, building standards, taxes and, according to Dr Muththalib, who may buy and who may receive a visa. What changes is that the State controls the land through law and regulation, rather than by waiting for leases to end. This is how Canberra and Hong Kong manage their land, as the next section shows.
Step six: where long, renewable leases have worked
No country uses exactly the same model as Ras Malé. Several places, however, keep public ownership of land while giving private owners long-term security, and their experience supports the approach.
Canberra, Australia. All private land in Australia's capital territory is held on 99-year leases from the government. The system was chosen when the capital was founded, so that the government could guide development and prevent speculation. When a lease ends, the owner applies for a new one of up to 99 years, for a fee of about AUD 540 for a home. The new lease is granted unless the government needs the land for a public purpose. A law professor at the Australian National University said the government has never refused to renew a lease. A whole national capital has been built on this system over the past century, and homes there sell much like fully owned homes.
Hong Kong. Almost all land in Hong Kong is leased from the government. Since 1997, leases can be extended for 50 more years without a large one-time payment; owners instead pay a yearly rent equal to 3 per cent of the property's official rental value. The Lands Department says there is no limit on the number of extensions, and that every ordinary residential, commercial and industrial lease has been extended since 1997. Since July 2024, extensions happen automatically. Leasehold has not prevented Hong Kong from becoming one of the world's major property and financial centres.
The Maldives' own resorts. The Maldives already uses longer leases to support investment. In 2015, the Tourism Act was amended to allow resort leases to be extended from 50 to 99 years for a fee. The then tourism minister said the change would increase government revenue and investor confidence. The Act has since been amended again to adjust the extension fees, most recently in March 2025. The resort sector, the country's main industry, has grown on the basis of long-term leases.
Singapore, the contrasting case. Singapore's 99-year leases do not renew automatically. This protects the State's ownership fully, but it also means owners bear lease decay, and older buildings need special arrangements and payments before they can be redeveloped. Singapore shows that fixed leases can work, but that they create costs that renewable leases avoid.
The pattern across these examples is consistent. Where long leases support development, owners are confident their lease will continue, and the government keeps clear rights through law: planning powers, a regular payment linked to land value, and the power to acquire land for public use with fair compensation.
Step seven: the conditions that will make it work
A rolling lease supports development only if it rests on clear rules. International experience points to seven conditions that the final Ras Malé agreement and its supporting laws should meet. Most of these details have not yet been published.
A clear legal basis. Each new lease stays within the 99-year limit in Article 251. Writing the rolling lease into legislation, rather than leaving it only in contracts, would give buyers, banks and the public certainty that it respects both the wording and the purpose of the Constitution.
The right to grant each new lease. In property law, no one can grant more than they hold. Eagle Hills will hold its own lease from the government for its 500-hectare site, and it cannot give a buyer a lease that lasts longer than its own. The simplest solution is for each new lease to be granted or confirmed by the State, or for the developer's own lease to renew on matching terms. The terms of Eagle Hills' own lease have not yet been disclosed.
Clear rules on which sales count. Rules should define which transfers restart the lease, how sales between related companies or family members are treated, and how the sale value for the 4 per cent charge is set, so that every renewal brings a fair payment to the State.
Care for ageing buildings. A new lease does not make a building new. Laws on building management, savings funds for major repairs and clear redevelopment rules will ensure that towers near the sea remain safe and well kept for decades.
A continuing share in land value. Hong Kong charges a yearly rent linked to property value, and Canberra keeps the right to use land for public purposes. A similar yearly rent or public-use clause at Ras Malé would give the State a permanent share in rising land values and the ability to respond to future public needs.
Consistency with other investors. Resort operators pay a fee of up to USD 10 million to extend a lease to 99 years. A clear public explanation of how the Ras Malé charges compare with those fees would reassure existing investors that the rules are fair.
Stable rules over time. Investors will pay full value only if they trust the arrangement will still apply in 50 or 80 years. Broad support across political parties, and publication of the key terms, would strengthen that trust.
What critics argue
The arguments against the rolling lease deserve a fair hearing.
Some critics, including a former MP quoted by the Maldives Independent, say there is little practical difference between selling land and leasing it on terms that keep restarting, and that future generations will never regain full use of the land. Opposition MP Ahmed Shamheed has described the Ras Malé lagoon as among the country's most valuable assets and has argued that such land should not be leased for long periods. Others note that the agreement has not been published, and that the terms of Eagle Hills' own lease, the basis of the 10 per cent revenue share, and the need for new laws remain unclear.
These concerns are serious. They are best answered not by avoiding long leases, which would weaken the development, but by meeting the conditions above in full and in public.
Conclusion
Ordinary leases lose value as they grow shorter, and that loss discourages buyers, banks and owners from investing. A rolling lease removes that obstacle. It helps pay for infrastructure, allows bank lending, encourages owners to maintain their buildings, attracts long-term residents and gives the State a share of every sale, while the land stays in Maldivian hands, as Article 251 requires.
Canberra, Hong Kong and the Maldives' own resort sector show that long, renewable leases can support development for generations. In each case, success rests on clear laws, protected public rights and predictable renewal. If the final Ras Malé agreement rests on the same foundations, the rolling lease will be a strength of the project, not a weakness.
