Tenure, transfer and infrastructure decide island value long before the beach does. A comparison of the five markets where private islands actually trade.
Private islands are the most misunderstood asset in luxury hospitality. Buyers arrive focused on the beach, the reef and the aerial photograph. Value, almost invariably, is decided by three far less romantic things: what form of title is available, how guests physically arrive, and whether the island can produce its own power and water.
Tenure separates the markets
The Bahamas remains the only major market where genuine freehold title over a substantial island is achievable, which is the single largest reason Bahamian islands command the premiums they do. The Maldives operates on long leaseholds — typically fifty to ninety-nine years — which function well commercially but price differently and require careful attention to renewal terms.
Elsewhere the position is more constrained. Most Southeast Asian jurisdictions offer foreshore leases or usufruct arrangements rather than title, and French Polynesian motu ownership is subject to layers of customary interest that reward patient and locally advised buyers.
Arrival is the second constraint
An island two hours from an international gateway is a different asset from one eight hours away, regardless of how similar the shoreline looks. A paved airstrip is transformative and rarely replicable — obtaining consent for one on an undeveloped island is, in most markets, harder than obtaining consent for the resort itself.
Where an airstrip is not possible, the quality of the marine or seaplane transfer becomes the effective ceiling on rate. Guests paying at the top of the market do not tolerate a difficult final leg, and no amount of villa specification compensates for it.
Infrastructure is where budgets fail
Desalination, power generation, waste processing and staff accommodation typically absorb between thirty and forty percent of an island development budget and produce nothing a guest ever sees. It is the phase where first-time island developers most often run short of capital.
This is precisely why part-built islands with completed infrastructure are, in our view, the most interesting entry point available today. The hardest and least rewarding capital has already been spent, the regulatory work is done, and what remains is the fit-out — the part that is predictable, visible and comparatively straightforward to fund.
Written by
Marcus Oyelaran
Director, Island & Resort Assets, Resorts International
This article is fictional editorial written for a demonstration site. It is not investment advice and describes no real market, transaction or property.
