Among its considerable stock of resources, the Philippines has around 7,100 islands, of which just 2,000 are inhabited. More than 5,000 have no name. President Rodrigo Duterte’s innovative plan to sell off – or long-term lease – some of these nameless, unpeopled marine outcrops could open up a niche real estate sector which requires little financing from the public purse and could deliver true treasures from the deep.
America bought the entire Philippines from the Spanish Crown through the 1898 Treaty of Paris for just US$20 million. Duterte will certainly be looking to improve on that deal. And given the abundance of small tropical islands dotted throughout Philippine waters, that shouldn’t present too much problem.
The bulk of these islets shelter in the shadows of the three main islands groups of Luzon in the north, the Visayas in the centre and Mindanao in the south. The waters which they occupy are, the South China Sea and the Pacific Ocean (north), the Sibuyan, Visayas, Samar, Camotes and Bohol seas (centre), and the Celebes, Sulu and Mindanao seas (south).
As they stand, unoccupied and unproductive, they have zero value. As getaway private islands or as potential for a new breed of resorts, that can be developed to the client’s whim – depending on size and location – they could be a sea treasure just waiting to be brought to the surface.
Globally, island sales are becoming not just an indulgence of the rich but a serious form of alternative investment. In 2012, Larry Ellison, CEO of computer-tech company, Oracle, snapped up 98% of Hawaii’s Lanai Island for US$500 million (now that’s a better deal than the Spanish made). In 2013, Ekaterina Rybolovleva, the 24-year-old daughter of a Russian billionaire potash producer-fertiliser producer, bought the Greek island of Skorpios – the wedding venue for Aristotle Onassis and Jackie Kennedy – for US$133 million. These fall in the private getaway market.
In 2003, Red Bull co-founder, Dietrich Mateschitz bought the small Fijian island of Laucala and turned it into a luxury resort where the per-night bill ranges from US$7,000 to US$36,000. In 1977, German billionaire, Otto Happel, former CEO and owner of Germany’s food and energy process-systems manufacture, the GEA Group, bought the northern portion of Frégate Island in the Seychelle and spent the next 21 years creating a 2.6 square kilometre tropical Indian Ocean resort with seven beaches where hawksbill tortoises come to nest. The overnight room rate is US$3,500 to US$5,000. These, then, are islands bought as commercial ventures.
Private island real-estate deals are becoming increasingly common. Online agencies have literally thousands of them for sale or as rentals. From the Caribbean to the Northern Adriatic; from Chile’s Santiago Basin to Coles Bay in the Tasman Sea, small islands are becoming a very marketable commodity. Tinabian Island (picture above) is from the Philippine sales portfolio of Private Islands Online, an international real-estate brokerage, established in 1999 that deals exclusively with island properties.
As Spain’s property sector continues to flounder and talk of a severe correction or worse in the US market, the Philippines’ property prospects appear far rosier than the signatories of the Treaty of Paris. With a stock of several thousand potential island paradises, the Philippines could be looking at possibly the biggest real-estate bonanzas in its history.