It’s not every day you bump into Britain’s best-known reformed gangster in the African desert. It’s even more unusual to discover that the convicted murderer has become a poster boy for the hottest trend in overseas property. But, when it comes to the next big thing in the second-home market, the man scratching shapes with a stick in the sand is hotter than the desert sun.

Jimmy Boyle is standing on the outskirts of the Moroccan city of Marrakesh, on a patch of scrubland where he is building two new £500,000 villas. The 60-year-old Glaswegian — who was sentenced to life imprisonment for murder when he was 23, discovered sculpture in Barlinnie jail and was released as a reformed character — is chatting to architects and local property investors. The group, who call him Mister Jimmy, nod and take notes.

Boyle, who has made a multi-million-pound fortune from his art, is one of a handful of overseas investors leading Marrakesh’s new property boom. A decade after the Wallpaper* crowd discovered the ancient Arab walled city, turning its narrow streets into one funky cool medina, the supply of affordable, good-quality riads (town houses) is drying up. Prices of riads have risen by 50% in the past three years and only a handful of properties remain that are suitable for conversion into holiday homes.

Investors are now moving out of the souk and into the sand. As Boyle gestures towards the dusty scrubland surrounding his 7Å-acre desert plot, where workers are digging the foundations for his villas, he says: “Enjoy the view of the date palms and camels while you can because this area is being transformed. Modern villa developments are changing everything.”

Marrakesh has caught the villa bug. It’s not just small developers either; some of the world’s biggest property firms are greening the desert that surrounds the old city’s ochre walls. Britain’s Hamptons International and Knight Frank will announce a £25m deal next month with Canada’s Four Seasons group to market 40 modern town houses and villas built around a Four Seasons hotel and spa on the outskirts of the city. The properties, due to be completed by 2008, will start at £300,000 for a two-bed town house and rise to £1m for four-bedroom villas, which will all feature a double-height central courtyard, swimming pool and garage, plus water features in the gardens. The hotel will rent out the villas when their owners are not using them. Hamptons’ associate director, Caroline Reid, says: “Marrakesh is fast becoming an alternative holiday and second-home destination. Huge efforts are being made to attract international investment.”

Hamptons’ UK rival, Savills, is in talks to sell flats on an as yet unnamed development in the Agdal — “garden” — area, a newly created western-style tourist enclave half a mile from the city walls. The flats, start at £100,000 and buyers will have use of a private clubhouse and a spa. When they get bored with their own spa they can head down the road to the Hermès one. The French luxury goods group is building its own complex of hotel, spa and 60 flats and villas at Les Parcs de l’Agdal, with prices starting at £200,000.

Across the city, Aman Resorts is jumping on the camel train and constructing 16 freehold villas in a ring of citrus groves on the site of the Amanjena hotel. Prices start at £2m for a four-bedroom villa with private pool and garden. Ferdinand Wortelboer, Amanjena’s Dutch manager, says: “Our villas offer privacy, but buyers will be able to enjoy all the facilities of the resort. We have already sold half the villas off-plan to clients who like the Aman aesthetic and value the peace and views that Marrakesh offers.”

Mandarin Oriental, a rival Asian group noted for its city-centre hotels, is finalising plans for its first “out of town” hotel and residential resort.

Over the next five years, 17 developments, comprising almost 10,000 new homes, are due to be completed. Alban Pamart, who runs a leading local estate agency, Atlas Immobilier, says: “There’s so much construction going on, Morocco feels like a mini Dubai. The city is changing completely.”

The arrival of large-scale developers has prompted criticism from some long-time Marrakesh residents. They fear new holiday-home developments will transform a bohemian Arab capital into Africa’s answer to Palm Springs. Some are calling for a cap on the number of homes built for overseas investors.

Elisabeth Bauchet-Bouhlal, who moved to Marrakesh to open the fashionable Es Saadi hotel in the 1960s, has seen the city rise and rise — from the hippie 1960s, when Yves Saint Laurent, Mick Jagger and Paul Getty established Marrakesh as a louche holiday destination, through the “Hideous Kinky” 1970s, to the Jude’n’Sienna boho-chic 2000s. She says: “We don’t want to become like California, with condos and manicured golf courses in the desert. This is Marrakesh. We should not be killing its charm by building soulless fake palm-lined oases.”

With an entire stretch of Mohammed VI Avenue already resembling a US-style strip development of apartment blocks, shopping malls, nightclubs and hotels, Khalid el Fataoui, the fast-talking deputy mayor of Marrakesh, concedes that the new developments will westernise the city. But he insists that strict rules on building size and style will preserve the local charm.

New buildings cannot be more than 9m high and the exterior must be decorated in the traditional Moroccan red. Local materials, such as cedar wood, tadelakt, zellige and bejmat (smooth-finished lime, elaborately decorated tiles and clay bricks) must be used inside and out. “Marrakesh is a big city and however large the developments they will simply dissolve into the broader Moroccan culture,” he says.

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