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#197947 - 07/07/06 06:58 AM Private islands: Prestige ... and a whole lot of upkeep
Marty Offline
http://www.iht.com/articles/2006/05/25/properties/reisland.php
Private islands: Prestige ... and a whole lot of upkeep
By Anne Kalosh International Herald Tribune

Published: May 25, 2006

MIAMI A private island can be what one real estate specialist calls "the ultimate trophy" - and with the demand for properties rising worldwide, there is a lot of competition for such prizes these days.

Globally, the Caribbean is considered hot, and the Bahamas "very much so in recent years," according to Farhad Vladi of Vladi Private Islands, based in Hamburg, Germany, and Halifax, Nova Scotia. As a result, prices in the Bahamas have tripled, Vladi said, and even areas in less demand, like the Eastern Caribbean, have seen increases of about 20 percent.

Five of the priciest properties on Forbes's 2006 list of the most expensive private islands are in the Caribbean and Bahamas, led by $25 million Grand Bogue Cay, a reef island covering 314 acres, or 127 hectares, in Belize, and the $24 million Thatch Cay, 230 lush acres off the coast of St. Thomas in the U.S. Virgin Islands. (An island near Ibiza, Spain, tops the list at nearly $40 million.

Yet not all islands command astronomical prices. For example, H.G. Christie, a private island specialist with offices in the Bahamas, has listed a tree-topped 1.4-acre dot in the Abacos for $375,000. And, except for those rare turnkey properties, such as the $17.8 million Leaf Cay 2 in the Bahamas or the $5 million Jewel Cay in the Florida Keys, most islands are undeveloped and will require a lot of investment.

Someone who buys a $20 million island would probably build a $10 million home on it, said Ron Kurtz, president of the American Affluence Research Center in Miami. And that $30 million is likely to represent less than 20 percent of the individual's net worth.

"It's got to be somebody worth $150 million and maybe up to $300 million," Kurtz said. "Those are very limited in number in the world - Middle East oil families, entertainers, sports celebrities and a few businesspeople."

Plus, there is the continuing cost of staff and maintenance, which Kurtz estimated at 6 percent to 10 percent of the investment's value annually.

Even people with fat bank accounts cannot count on a private island to be carefree.

"You have to do everything yourself," from treating water and generating electricity to flying in a plumber when the pipes spring a leak, said John Christie, vice president of H.G. Christie.

Privacy is an important feature for many people who buy islands, although sales indicate the most marketable properties are those that are easily accessible, near the mainland or a populated island.

Vladi says it is important to have property ownership clearly established, a source of fresh water, attractive vegetation, development options and a politically stable host country.

Red tape is always a potential problem. Local laws vary. In the Bahamas, for example, foreigners must obtain approval from an investment board before buying a property, although agents say that is only a formality under most circumstances.

Depending on the island, sales may range from freehold titles to land leases. In some places, development may be limited by the presence of protected flora or fauna; other pitfalls can include neighbors from vastly different socioeconomic backgrounds, and weather that can range from humid and rainy to hot and dry. There is also a risk of hurricanes.

Communications used to be an issue for island dwellers, but now satellite access allows telephone, television and high-speed Internet service almost everywhere; many remote spots even have cellphone service.

Beyond buying an island and developing it, owners need to have time to relax there. A case in point: A couple from New Zealand and Italy with four children built a glamorous hideaway in Nicaragua's Pearl Cays, but found that it is just not practical to spend as much time there as they had hoped.

A diminishing supply of available properties has pushed up demand and prices. A first-ever public auction of several islands is being planned for July in New York City and is expected to further raise the profile of such getaways among the well-heeled.

Because prices are rapidly appreciating, brokers like Cheyenne Morrison in Australia see islands as "one of the most profitable investments you could ever make."

Morrison, owner of Coldwell Banker Morrison's Private Islands in Port Douglas, Queensland, pointed to Richard Branson's purchase of Necker Island in the British Virgin Islands for $303,000 in 1978. Branson has spent a great deal on improvements; the island is valued around $106 million today.

Christie, of the H.G. Christie agency, notes that one Bahamian island has appreciated at a breathtaking 100 percent a year for each of the past 10 years, which, he said, "sure beats the stock market."

After some 35 years of selling islands, Vladi predicts prices in the Bahamas "will definitely come down - it is only a question of time." "With islands, it only takes a few people to drive up the price," he said.

However Christie, whose family-owned agency has been selling Bahamas properties since 1922, thinks its prices have been undervalued and are still catching up with the rest of the Caribbean.

Big price gaps do exist between areas that have been frequented by the wealthy for decades and those that have not. St. Vincent and The Grenadines has long been famous among the yachting crowd, and jet-setters like Mick Jagger, David Bowie and Princess Margaret put Mustique on the map.

Then there are emerging areas like the cay-dotted coasts of Belize, Honduras and Nicaragua.

"The absolute cheapest land in the Caribbean is in Nicaragua, followed by Honduras and Belize," Morrison said.

After peace finally came to Nicaragua 10 years ago, that country began courting foreign investment. Islands in the Pearl Cays have sold as private getaways; one became a boutique fishing resort.

The private islands in Belize are appreciating in value rapidly, partly because it is within easy access of the United States - less than a two-hour flight from Miami - and off the largest reef system in the Northern Hemisphere, protected by Unesco as a World Heritage Site. According to several Web sites, Leonardo DiCaprio recently paid about $2.4 million for one, Blackadore Cay, and intends to build an eco-resort.

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#197948 - 07/07/06 09:01 AM Re: Private islands: Prestige ... and a whole lot of upkeep
denverdan Offline
Geeze Marty,
Will ya paaaleeese put in a good word for us to be caretakers on one of these little cayes!!!
I'd sure appreciate it! wink

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#197949 - 07/07/06 02:45 PM Re: Private islands: Prestige ... and a whole lot of upkeep
Phil Offline
Doesn't Caye Chapel top all of these at just US$55 Million.

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#197950 - 07/07/06 03:48 PM Re: Private islands: Prestige ... and a whole lot of upkeep
Amanda Syme Offline
$85 Million, but it is no longer available.

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#197951 - 07/07/06 06:37 PM Re: Private islands: Prestige ... and a whole lot of upkeep
Pam&Dave Offline
Great! Glad to hear that check FINALLY cleared wink
_________________________
"Nothing can bring you peace but yourself"

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