Bahamas Private Island Ups Its Price
Kanebridge News
Share Button

Bahamas Private Island Ups Its Price

Little Pipe Cay in the Exumas is now listed for approx. $142 million.

By E.B. Solomont
Mon, Dec 6, 2021 11:52amGrey Clock 3 min

A Bahamas private island last listed for $121 million in 2018 is back on the market for approx. $142 million.

Known as Little Pipe Cay, the roughly 40-acre island is one of around 365 islands in the Exumas, a 209-km-archipelago in the Bahamas, according to listing agents Fredrik Eklund and John Gomes of Douglas Elliman. They are marketing the property with Edward de Mallet Morgan of Knight Frank.

The island was developed by the late Michael Dingman, an industrialist and the founder of Shipston Group, an investment company based in the Bahamas, according to a person familiar with the project. Mr. Dingman died in 2017. His family didn’t respond to requests for comment.

Mr. Eklund said the price increase is justified by surging luxury home values, particularly in places like Palm Beach and Miami, which is around 270 miles away and accessible by seaplane. “It’s a stronger market than we’ve ever seen,” he said.

In Miami Beach’s luxury market, the average sale price for a single-family home was 25.3% higher in the third quarter of 2021 compared with 2020, according to research and appraisal firm Miller Samuel. In Palm Beach, the average luxury sale price rose 79.4% during the same period.

Mr. Gomes said the Bahamas has become a popular tax haven, as well as a centre for cryptocurrency. Last year, the Bahamas became the first nation to issue its official currency in digital form. “The Bahamas is having a moment,” he said.

According to Mr. de Mallet Morgan, the owners spent more than a decade developing the island. He declined to speculate how much they invested. “Effectively, it was a 15-year labour of love,” he said. “This was very much a passion project for the family.”

The island has 22 structures, including living areas and outbuildings that house the island’s power and water systems. The main residence measures approximately 5,300 square feet, with three bedrooms and a covered veranda. There is a separate house for entertaining, called the Refectory, which spans roughly 8,900 square feet with a dining area, pub, gym and spa. The island also has four guest cottages, each with two bedrooms, as well as a staff house.

Island in the Stream

The island is in the Exumas, a roughly 130-mile long archipelago. PHOTOS: LIFESTYLE PRODUCTION GROUP(2); BRETT DAVIES PHOTOGRAPHY(2)

The homes are Bahamian Colonial in style, with copper roofs, Mr. Gomes said. Each home is decorated with colourful prints, he said, and all of the furniture and art is included in the offering, except for a handful of personal pieces.

The owners invested heavily in the island’s infrastructure, including a water filtration plant, freshwater storage and power station, as well as an underground power grid. “It’s like a small town,” Mr. Gomes said. Outbuildings on the island house a workshop, laundry facility and equipment storage. The owners also stockpiled replacement parts for all of the machines and appliances.

In general, the market for private islands is small, but demand, prices and the number of deals have shot up over the past two years, Mr. de Mallet Morgan said. “The pandemic has put a huge extra value on privacy, health and wellness,” he said. There are currently around 75 islands in the Bahamas that are for sale, ranging from an acre to several hundred acres in size and priced between US$495,000 and US$62 million, according to Private Islands Inc., a marketplace for private islands.

Little Pipe Cay is unique in that it is a freehold island, Mr. de Mallet Morgan said, meaning the buyer will own the land and property outright. Most islands in the area are leaseholds.

Mr. de Mallet Morgan said it costs roughly US$1.5 million a year to operate the island. Recently, after getting requests to charter the island for short stays, the family has made it available starting at US$75,000 a night, he said.

He said the family has turned down several offers to purchase the island because they were too low or had unfavourable terms. “There’s no undue pressure for the family to undersell it,” he said. “If you look at what people are paying US$100 million for in other parts of the world, Little Pipe Cay all of a sudden looks pretty reasonable.”



MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Money
Why Prices of the World’s Most Expensive Handbags Keep Rising
By CAROL RYAN 05/03/2024
Money
The Lessons I’ve Learned From My Friends’ Expensive Divorces
By JULIA CARPENTER 05/03/2024
Lifestyle
Only 5% of U.S. Foundations Invest for Impact, Study Finds
By ABBY SCHULTZ 02/03/2024
Why Prices of the World’s Most Expensive Handbags Keep Rising

Designers are charging more for their most recognisable bags to maintain the appearance of exclusivity as the industry balloons

By CAROL RYAN
Tue, Mar 5, 2024 3 min

The price of a basic Hermès Birkin handbag has jumped $1,000. This first-world problem for fashionistas is a sign that luxury brands are playing harder to get with their most sought-after products.

Hermès recently raised the cost of a basic Birkin 25-centimeter handbag in its U.S. stores by 10% to $11,400 before sales tax, according to data from luxury handbag forum PurseBop. Rarer Birkins made with exotic skins such as crocodile have jumped more than 20%. The Paris brand says it only increases prices to offset higher manufacturing costs, but this year’s increase is its largest in at least a decade.

The brand may feel under pressure to defend its reputation as the maker of the world’s most expensive handbags. The “Birkin premium”—the price difference between the Hermès bag and its closest competitor , the Chanel Classic Flap in medium—shrank from 70% in 2019 to 2% last year, according to PurseBop founder Monika Arora. Privately owned Chanel has jacked up the price of its most popular handbag by 75% since before the pandemic.

Eye-watering price increases on luxury brands’ benchmark products are a wider trend. Prada ’s Galleria bag will set shoppers back a cool $4,600—85% more than in 2019, according to the Wayback Machine internet archive. Christian Dior ’s Lady Dior bag and the Louis Vuitton Neverfull are both 45% more expensive, PurseBop data show.

With the U.S. consumer-price index up a fifth since 2019, luxury brands do need to offset higher wage and materials costs. But the inflation-beating increases are also a way to manage the challenge presented by their own success: how to maintain an aura of exclusivity at the same time as strong sales.

Luxury brands have grown enormously in recent years, helped by the Covid-19 lockdowns, when consumers had fewer outlets for spending. LVMH ’s fashion and leather goods division alone has almost doubled in size since 2019, with €42.2 billion in sales last year, equivalent to $45.8 billion at current exchange rates. Gucci, Chanel and Hermès all make more than $10 billion in sales a year. One way to avoid overexposure is to sell fewer items at much higher prices.

Many aspirational shoppers can no longer afford the handbags, but luxury brands can’t risk alienating them altogether. This may explain why labels such as Hermès and Prada have launched makeup lines and Gucci’s owner Kering is pushing deeper into eyewear. These cheaper categories can be a kind of consolation prize. They can also be sold in the tens of millions without saturating the market.

“Cosmetics are invisible—unless you catch someone applying lipstick and see the logo, you can’t tell the brand,” says Luca Solca, luxury analyst at Bernstein.

Most of the luxury industry’s growth in 2024 will come from price increases. Sales are expected to rise by 7% this year, according to Bernstein estimates, even as brands only sell 1% to 2% more stuff.

Limiting volume growth this way only works if a brand is so popular that shoppers won’t balk at climbing prices and defect to another label. Some companies may have pushed prices beyond what consumers think they are worth. Sales of Prada’s handbags rose a meagre 1% in its last quarter and the group’s cheaper sister label Miu Miu is growing faster.

Ramping up prices can invite unflattering comparisons. At more than $2,000, Burberry ’s small Lola bag is around 40% more expensive today than it was a few years ago. Luxury shoppers may decide that tried and tested styles such as Louis Vuitton’s Neverfull bag, which is now a little cheaper than the Burberry bag, are a better buy—especially as Louis Vuitton bags hold their value better in the resale market.

Aggressive price increases can also drive shoppers to secondhand websites. If a barely used Prada Galleria bag in excellent condition can be picked up for $1,500 on luxury resale website The Real Real, it is less appealing to pay three times that amount for the bag brand new.

The strategy won’t help everyone, but for the best luxury brands, stretching the price spectrum can keep the risks of growth in check.

MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Lifestyle
Best Paints In Australia For Exceptional Interior And Exterior Finish: 2024 Guide
By Kanebridge News 04/12/2023
Money
One Country’s Dream of EV-Driven Prosperity Helps Fuel a Coal Binge Instead
By JON EMONT 05/02/2024
Money
Qantas Scraps Attempted Takeover of Australian Charter Operator
By Decison follows opposition from Australia’s competition regulator 19/10/2023
0
    Your Cart
    Your cart is emptyReturn to Shop