Up until this year, the prospect for luxury travellers has been simple: go every year to a choice destination, or get a second passport that comes with the dual advantage of easy access to other countries all over the world, a benefit that citizens from developing nations find especially intriguing. Now, there is a third option, one that was on the back burner pre-Coronavirus: owning a private island.
Until recently, the possession of one’s very own sea-fringed pseudo-kingdom remained, for most of us, a pipe dream. But now that isolation has taken on the urgency of a government mandate, and the bonds that tie us to physical workplaces are disintegrating, more and more people are considering whether owning an idyllic rock somewhere is less fantastical and more fundamental.
Two years ago, when Edward de Mallet Morgan, a broker for Knight Frank’s super-prime international residential division, first sent out details for Little Pipe Cay, an $85 million private island in the Bahamas, the response was lukewarm. “They couldn’t justify the management costs for the amount of time they would use it,” he says of potential buyers pre-pandemic. “Now that we can all work from home, the genie is out of the bottle. All of a sudden, a private island seems justifiable.” Inquiries have increased at least five-fold since January.
The market is even hotter in the world’s farthest-flung archipelagoes, for those really looking to disappear into the blue yonder. Jacques Menahem, founder of French Polynesia Sotheby’s International Realty, normally gets two e-mails a week about private islands. Since March, that number has jumped to as many as 10 a day. “They are all looking for a remote area where they can control their environment and no one is going to tell them to put on a mask,” he says. Even in colder climes, no-frills islands priced as low as $100,000 are selling particularly well, says Farhad Vladi, a specialist island broker based in Germany, citing Canada, Norway and Sweden (home to 267,570 islands) as hot spots.
While holing up on a private island all by yourself, and possibly your family, can look like the life, there are quite a lot of downsides to this type of lifestyle. Menahem advises his clients that islands involve “a lot of loneliness. It’s like living on a boat alone in the sea, only the boat does not move.”
Every buyer should assume that all costs, from construction to repairs and supplies, will be 25 to 30% higher than on the mainland, says Vladi. In addition to the standard amenities of a vacation home, you might need to take into account desalination, sewage and electricity. Will you require a landing pad? A seaplane? How many boats? Insurance considerations include flooding, hurricane damage and expropriation, in case the local government happens to requisition your land for public use.
“You have to think, not dream,” says Menahem. “You need to have a large maintenance budget and a handyman on-site, or it will cost you a lot of money to fly someone in every time something breaks down. You need to buy two of everything so you have backups, and you have to have space to store it all.”
According to the owner of Blue Island, who has bought and sold five Bahamian isles (his family also has a stake in a Scottish one), an indispensable investment is an experienced island manager to oversee the building and maintenance of “houses and power plants and harbours and landscaping.” His largest single expense on Blue Island was installing a 5,700-foot asphalt runway—the only jet airstrip on a private island in the Caribbean. “We had 40 men working on the runway, and had to build accommodation for all of them.”
Annual running costs at Little Pipe Cay, the former home of Michael Dingman, a billionaire industrialist, are $1.5 million for five houses and a large staff village. “It’s not cheap, but it’s probably cheaper than owning a superyacht,” says Morgan. “You can come in with a toothbrush and tap straight into a functioning machine.” Watching the behind-the-scenes operation is “like being on deck in a battleship,” he adds.
In order to recoup a little of their expenditures, many owners sacrifice some of their cherished privacy and rent out their islands. Sir Richard Branson charges $102,500 a night for Necker Island (sleeps 40), which he bought in 1979 for $120,000. Should Little Pipe Cay’s future ruler wish to make some cash on the side, he or she could charge $50,000 to $80,000 a night, Morgan estimates.
For those on a tighter budget—or for whom contemplating such details as composting toilets is a less than joyful prospect—a private island might seem like an encumbrance. This is the view of David Forbes, chairman of Savills Private Office, the department of the global real-estate brokerage that deals with ultra-high-net-worth clients. “In 40 years of selling at the very top end of the market, I have shown many private islands but never sold one,” he says. “They are a total money pit. Rent one for a month? Fine. Own it? No, thank you.”
During a trip to Mustique in February, Forbes was contacted by a client who asked to view a nearby island. “I showed him round it, and we were eaten alive by mosquitoes,” Forbes recounts. “He decided he didn’t really want to have to put in roads and negotiate with the St. Vincent government about electricity and water and sewage treatment. What seemed like cheap real estate began to seem like an expensive long-term proposition.”
Yet for many, this requirement for self-sufficiency is exactly what appeals. The isolation and autonomy are the point, not the sacrifice. If this is you, then being the king of your own little kingdom – even if it means sinking almost all your funds to make it a reality, or dealing with less-than-desirable situations while being cut off from the rest of humanity – is the most important thing.
Source: Robb Report