Buying a private piece of paradise

No man is an island. But plenty of people fancy the idea of owning one. It may seem that Asia would be a magnet for "islomaniacs." Indonesia is the largest archipelago in the world, with 17,000 islands. The Philippines has about 7,100 or so, depending on the tides. Malaysia, Thailand, Cambodia and Vietnam all have extensive coastlines. But real estate laws do not make it easy for foreigners to own property in Southeast Asia, and most islands either do not have clear ownership rights or are already settled. Also, the few places that do come on the market can have prohibitive costs, thanks to demand from hotel developers.

Given all those difficulties, several new developments are selling villas on private islands that are adjacent to high-end hotels. Owners can have their island retreat without having to absorb the total cost of keeping it habitable. Aman Resorts is selling villas that start at $3 million on a private island in the Philippines. Owners have unfettered access to the resort's facilities and can live at their property, use it as a holiday home or include it in the company's rental pool.
Similarly, Soneva Kiri, a resort run by Six Senses on the Thai island of Koh Kood, is selling villas starting at $4.5 million. There also is a private island for sale nearby at $38 million. And the Jumeirah Private Island project in Phuket, Thailand, is selling private residential villas and estates next to a resort, with prices starting at $3.2 million. The developers of all these projects say it is too early to tell how the global real estate slump and credit crisis will affect sales - or whether persistent political problems in Thailand will take a special toll on that country's projects.

There are options for buyers with smaller budgets, like The Village at Coconut Island, a private island just off Phuket, with prices starting around $610,000. Also, a startup called Barefoot Investments is beginning its first project on a private island in the Philippines, the Cacao Pearl in Palawan, with homes starting at $210,000. "There's a wide selection of interest for private islands that would support a development that's a hop skip and a jump from a five-star resort," said David Simister, chairman of CB Richard Ellis for Thailand, Vietnam and Cambodia. "It's the ideal balance."

But, with enough money, there are ways to get around the problems. Six Senses is offering the Thai island of Koh Raet, with a 10-bedroom villa and full management services, for $38 million. It says the spot, opposite Koh Kood and the Soneva Kiri resort, has drawn interest from potential buyers in the Middle East, Taiwan and Russia, but no one has committed.

"There are only so many private islands you can buy, and this one is fully managed and serviced by Soneva," said Adam Taugwalder, the sales and marketing director for the company's residences division. As required by Thai law, it would be sold on a 30-year lease, with two extensions of the same duration; the company promising additional extensions, if possible.

Six Senses made its name with its flagship resorts in the Maldives, Soneva Fushi and Soneva Gili. The expansion into private property is something of a gamble for the company, but the founders - the chief executive, Sonu Shivdasani, and his wife and creative director, Eva Shivdasani - say they started their hotels so they could have their own house at Soneva Fushi. Now, they are offering such access to others. (extracts from http://www.iht.com/ )