Property life in southeast asia

ASIA’S NO.1 PROPERTY & LIFESTYLE GUIDE • DISPLAY TO MARCH 31ST 2014

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THE

M E D I T E R R A N E A N

ISLAND ICONS

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OFC Issue 10 FINAL V2.indd 1

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PLUS! NEW ZEALAND North vs South • THE CANDY REPORT Southeast

Asia Spotlight • PHUKET 28 Million reasons to buy • FUTUREWATCH New urban trends • VLADI MARVELOUS Asian interest in private islands

2/4/14 3:01 PM

CONVERSATION FEBRUARY • MARCH 2014

THE

Vladi

Marvellous Secret to Owning an Island Paradise

Frégate Island Private - Seychelles

A celebrity favourite, providing an idyllic, romantic setting for any holiday. According to the New York Times this island features the most beautiful beach in the world.

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f the Mediterranean sounds a bit too pedestrian then perhaps it’s time to leave the madding crowds behind and take ownership of your own private island.

Property Life (PL) spoke to Manuel Brinkschulte (MB) from Vladi Private Islands and found out that it’s not just the mega rich who are buying private island real estate.

According to Price Water House Coopers VLADI PRIVATE ISLANDS GmbH has sealed over 2,400 island, island-related and real estate deals since its establishment in 1971.

Vladi Island’s business model is particularly interesting as the company focuses on islands that fall outside the Southeast Asian region due to what the management sees as significant political and legal risk involved in island ownership.

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PL Manuel, firstly thanks for agreeing to have a chat to Property Life. Can you give us a bit of background on your company and how you believe that clients benefit from a relationship with a company that is more than just an online presence, but also registered and licensed professionals, with books audited by a company like PWC? MB Farhad Vladi founded his company in 1971 and sold more than 2400 islands in all four corners of the world. We also take care of the property management of more than 1000 islands for our clients. Being a licensed Real Estate Agency and member of the International Real Estate Federation (FIABCI) for more than 30 years, shows that we can be held responsible for what we offer and play by the rules in co-operation with third party agents who introduce a client to us.

PL What in your opinion is driving the demand for Islands across the globe, what motivates these investors?

MB If you buy the fanciest apartment on The Peak in Hong Kong today, it’s likely that there will be an even fancier building next to yours in a few years’ time, affecting your potential resale price – quite simply you’re unique piece of property isn’t so unique any more.

An island owner doesn’t face that sort of risk because Islands are a natural phenomenon and therefore a completely unique proposition. The number of islands is limited yet the number of people who can afford an island is increasing.

Economics therefore dictates that islands, at least over a long period of time – are appreciating assets.

© VLADI PRIVATE ISLANDS

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By Steve Mallach

2/5/14 11:17 AM

CONVERSATION FEBRUARY • MARCH 2014

Vladi Private Islands has built a reputation for providing advice to some of the most high profile personalities in the world when it comes to finding a slice of island paradise.

PL You’ve attended the Shanghai Property Show at the end of 2013. Did the levels of interest at the show indicate that Asian demand for private islands is growing?

PL There has been talk that the business

has picked up noticeably in the past 6 months and that this may signal a calming of the turmoil caused by the global financial crisis, at least amongst the ultra rich market segment. What are your thoughts?

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PL Can you give our readers some insight into the regions where Asian investors are particularly active?

MB Asian clients are investing in small islands on the North American continent or off the coastline. They are interested in inland lakes or the Atlantic. Corporate clients, mainly real estate developers are showing interest in North American islands as well as in some very large islands off Central America and in the South Pacific. There is a lot of de-

mand for islands in the South of France or the United Kingdom, but right now there are only very few islands in these areas on the market.

Buyers from Asia, who would like to buy an island for their personal use, have recently discovered Canada’s Southeastern regions as a playground. They seem to love the space and the fact that you can buy a large and fully developed island for the price of a 2-bedroom apartment in a major Asian metropolis.

Thanks to property laws that only allow locals to own land, Islands in most of Southeast Asian countries will not play an important role in the private island business anytime soon.

Does this bother me? Not at all! I think it would be wrong to allow foreigners to own land in countries with low purchasing power and almost no domestic demand for private islands. Look for example at the Philippines, home to one of the world’s most beautiful archipelagos.

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MB Our company has only started promoting private island ownership in Asia less than three years ago, and the demand has grown at an incredibly fast pace since then. In Shanghai we has several enquiries from interested party’s that are resident in Thailand and China for instance.

MB The private island industry, be it sales or rental, has not been affected by the global financial crisis at all. In fact, many clients who bought a private island during the global financial crisis did so to shift assets from classic real estate or stock portfolios to investments which are less volatile.

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CONVERSATION FEBRUARY • MARCH 2014

Alone time

Always spend a bit of time testing the waters to see if the isolation of island life suits you.

PL What sort of price points are proving most

popular and can you give us some indication of what these investors are getting for their money?

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MB In terms of sheer numbers of inquiries, the

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most popular islands right now are what we call the reasonably priced islands in North America. For less than USD $100,000 one can buy an undeveloped 150,000 square foot island in the great lakes or off the Atlantic coast of Nova Scotia - Canada’s most southern region.

At a price point between USD $500,000 and USD $ 1 million, one can find a fully developed island as big as 50 acres with a villa, boat dock and the infrastructure needed to take up residence and enjoy the private island immediately.

PL Do you have any idea of the other assets

that the buyers will be using in conjunction with their purchase - for instance yachts or helicopters?

MB Most of the top of the range islands have

their own airstrip, hangar and marina, making the island easily accessible or host the owner’s big boy toy collection. On some islands you will find submarines and many other types of gadgets.

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Check List for Island Buyers - 12 vital criteria 

Title

Only undercumbered freehold is accepted

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Medical

Medical service must be within a 90 minute radius of the island

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Fauna

Can you live with indegenous animals on the choosen island (some have mosquitos, sand-flies...)

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Flora

Get familiar with trees and plants, pros and cons

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Host Country

Social environment, acceptance of forign investment

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Access

Is the island accessible? Harbour, anchorage, Landing...

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Infrastructure

Water, sewage, electricity, telephone, internet

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Building Permit

Availability of permit, size of house, type of development



Climate

Get familiar with the weather and climate conditions

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Island Surroundings

Neighbourhood, amenities, service and also crime level

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Island Value (Investment)

Island market: locally-driven and/or by foreigners

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Island Seller

Notes on dealing with owner directly, licensed agents or third party

PL Are the majority of the islands that are purchased unimproved or do they already have infrastructure?

MB Most of the quality islands worldwide have been sold by our company once or twice already since 1971. In most cases, owners of islands in the ‘picturepostcard island’ regions, such as in the Caribbean, Indian Ocean or the South Pacific, have fully developed their island with accommodation, roads, docks, power plants, a water desalination system and wastewater treatment equipment. In areas like Canada, Fiji or the Maldives however it is possible to find islands which can be developed from scratch.

PL Are the buyers intending to use the islands for personal use, or do a percentage of them intend to establish commercial operations (for instance guest houses or hotels)?

MB We are working with clients from all walks of life and their intentions range from personal use by the client’s family to building a city for 50,000 people.

PL Do you have any advice for those who are contemplating a purchase of a private Island, either in Asia and elsewhere in the world?

MB My first piece of advice to anyone who is thinking of purchasing an island for his or her personal use is to “try before you buy”.

© VLADI PRIVATE ISLANDS

Imagine if freehold titles could be legally held by foreigners. The whole archipelago would be owned by the Americans, the Japanese, the Koreans, the Russians and other high net worth individuals by now.

2/5/14 11:17 AM

CONVERSATION FEBRUARY • MARCH 2014

Island life is not for everyone. Our company manages more than 1000 islands worldwide for existing clients, we can help those interested find an island for a test-run during a short holiday.

Once you have decided to go ahead with the purchase, don’t let your stomach make the decision, but make sure to go through the following checklist, it’ll help you make the decision about what sort of island is suitable for your individual needs or whether island life in general is something that you would enjoy.

MB Islands in the Maldives can only be leased for a period of 25-50 years, which makes the country less interesting for private investors. The increasing popularity among developers is driven by the growing numbers of tourists from Asia, especially China and India visiting the Maldives.

PL How robust is the rental market for

private islands at the moment?

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PL What sort of trends do you see for the future in terms of the purchase of private islands across the world?

MB In the last years, mainly due to the uncertainties that came with the Credit Crunch and the Euro crisis, there is an increasing demand by ultra high net worth individuals who wish to diversify and invest a part of their fortune into something that isn’t related to FOREX trading, the stock-market or classic real estate.

PL Can you give us some idea of how many people visit your website each month and how they can keep up to date with the latest

market releases and other news in the private island market segment?

MB We currently receive around 100 enquiries through our website per week, plus another 20-30 on our social networking platforms as Wechat (China) and Facebook. It goes without saying that many of the messages and questions we receive can’t be taken very seriously and are probably submitted by teenage boys who just watched a rerun of “LOST”.

Questions range from: “May I grow Cannabis on my private island?” to “Can I start my own country on my island?” However, every message to us will be answered, because who who our future buyers will be?

Around 10% of the people who are contacting us are seriously interested to buy an island. Many clients who visit our office in Hamburg come with the dream of a tropical island and leave with plans to inspect a lake island in Canada. To accumulate information about the latest market releases and other news in the world of private islands, we have launched the dedicated website www.privateislandnews.com.

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PL Why is the Maldives becoming increasingly popular at the moment?

MB It’s pretty buoyant as holidaying on private islands is becoming increasingly popular pursuit. People are seeking exclusive destinations and privacy is getting more and more important. Especially for high-profile characters and celebrities who want to spend their holidays away from prying eyes and media. Prince William and Kate, for example, spent their honeymoon on a private island in 2012.

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