King of your own private island

PHOTO: King of your own private island

SINGAPORE - Singaporean investors are no strangers to investing in property overseas, and are well known to suss out real-estate opportunities even in faraway, exotic areas such as Spain, Greece and the Czech Republic.

But, if you're getting bored with the usual real-estate investment options overseas and are on the hunt for something unique, consider this: Owning your private island.

Sounds like something out of a multi-millionaire's dream and completely unrealistic?

Not necessarily so, especially as property experts and recent reports have said that the prices of many such private islands have tumbled between 25 and 50 per cent since the global economic crisis.

The price of your slice

A Wall Street Journal article last month, for example, cited the median price of some 460 islands listed on United States property website to be just US$950,000 (S$1.2 million) - highly competitive with the continually-escalating property prices in Singapore.

A quick check by My Paper on established Toronto-based brokerage Private Islands Online also showed that some of these islands are being sold for as low as US$65,000, although there were those which cost up to tens of millions of dollars as well.

What's more, a number of the islands come with a freehold title and are sufficiently developed.

Long Caye Island, located in Belize in Central America, for example, is going for US$64,900.

The land parcel, albeit not sizeable at about 0.08ha, comes with a modern cabin which can sleep eight people.

It has kitchen equipment, a stereo system, a water-purification unit, a hot-water propane tank and a power system.

If you have a bit more money to invest, you might also want to look at land parcels such as Eilean Righ, situated on the Scottish island of Loch Craignish, and Davis Island, just south of Port Clyde in Maine, US.

Listed on German brokerage website Vladi Private Islands, Eilean Righ spans some 105ha and is said to be readily accessible from Glasgow Airport via a 25-minute flight, and also by sea and road.

Costing some £3 million (S$6 million), the island comes with a modern four-bedroom main house and a three-bedroom farmhouse, complete with electricity and high-speed broadband.

Davis Island, meanwhile, houses an elegant main residence surrounded by country gardens and scenic views all around.

Priced at US$3.95 million and equipped with electricity, the 19ha island also has a two-bedroom cottage, a caretaker's apartment, storage buildings and two docks.

Property firms My Paper spoke to said that such islands are a viable investment option for Singaporeans, although interest thus far has been mostly limited to enquiries from high-net-worth individuals.

But this interest could catch on over the next few years, given the recent tough property cooling measures introduced by the Government and as investors find out more about the competitive prices of the islands, they said.

"As city dwellers themselves, Singaporeans are generally more familiar with buying properties in gateway cities like Paris and London," said Mr Donald Han, special adviser to HSR Property Group.

"But, with the clampdown on property ownership here and the saturation of some overseas property markets, there could be a spillover effect into such alternative forms of investment, especially if the islands are nearby."

Mr Ong Kah Seng, director of R'ST Research, said that another impetus to go into such "specialised" investment would come from the still-escalating prices of luxury properties here.

"Wealthier investors here - those who hold upper-management positions and with an annual income of at least $500,000 - are likely to venture into such purchases as they find that they have exhausted conventional property-investment options," he said.

"Such an investment also offers a convenient place for them to retreat from their work stress."

Other things to consider

Still, there are many aspects investors need to consider seriously before making such an investment, property experts cautioned.

For one thing, they would need to ensure that the island already has power supply and drinkable water.

For another thing, they must understand the legal restrictions of the country under which the island is governed, particularly with regard to what they are allowed to build on the island.

Investors would also need to look into engaging an established local agent to rent out the island as well as to collect the payment.

Various staff would also need to be hired to maintain the properties on the island, as well as keep trespassers out.

Mr Lee Sze Teck, senior manager for research at Dennis Wee Group, noted that there are bound to be substantial periods when the island is not rented out and investors must be able to weather this out consistently.

"Buying an island is a totally different ball game, and the risks are inherently higher," he said. "The best return from owning an island would probably come from the bragging rights, rather than capital appreciation or rent."