Linc Energy boss Peter Bond and his family were forced to repossess the island in 2020 following the collapse of investment company Mayfair 101 and its now banned founder James Mawhinney, who had spruiked plans for a tourism mecca.
A deal involving concert promoter Mark Spillane’s Upsense Media Capital also failed to materialise. It’s understood the Cannon-Brookes, while extremely tight-lipped about their intentions, plan to build a low-impact eco project.
“Annie has purchased the land with the intent to preserve its natural beauty for years to come,” was all a spokeswoman would say.
There could be more tropical deals to come in the months ahead. The Rumble family’s Pumpkin Island is on sale for about $20 million while property developer Doug Gamble is hoping to offload Fitzroy Island Resort near Cairns for $35 million.
Orpheus Island, where only 28 guests can stay at a time.
Once the domain of Japanese real estate giants like Daikyo, which owned Fitzroy Island and a string of resorts in the 1990s, islands became the trophy assets of high-net-worth Asian families in the 2000s, who brought with them bold plans for mega-resorts, casinos and golf courses that they hoped would attract the high rollers.
However, many of these new owners grew impatient with the long and costly process for securing permits for large-scale resorts from myriad government and statutory bodies, and this was only exacerbated by the pandemic-induced stasis. Their exit has thrown open the door for islands to become the must-have trophy asset for local Australian billionaires, wealthy families and hoteliers, who have more modest visions for development than their offshore predecessors.
Veteran islands broker Wayne Bunz, national director at CBRE Hotels, attributes the rise of the new group of mainly Aussie island buyers in part to the impact of the COVID-19 lockdowns. Bunz, with his colleagues Hayley Manvell and Tom Gibson, has plenty of insights into island buyers, having sold Dunk (with JLL), Lizard, Lindeman, Hook and Long islands, and now tasked with reeling in a punter for Pumpkin Island.
“With Australians rediscovering their backyard and coastal resorts, this has reintroduced areas such as the Whitsundays and North Queensland back to those who may have been traditionally travelling overseas through Europe or Asia,” says Bunz. Alongside the billionaires who have the funds, he says, come the “absolute time wasters”, the “extremely colourful characters, the fantasists and rogues” who “clearly get ambition and ability extremely mixed up”.
“A lot of people think they can afford an island, but when you push them, they struggle to show you they have the funds,” he says. “One of the first inspections we did on Lindeman Island, the so-called purchaser proclaimed to have $2 billion invested with NAB. However, when we pressed him for evidence he wanted to take us to the Supreme Court.
“We have offers based on cryptocurrencies or barter coin, and even based on trades on cattle.”
Sotheby’s agents Lynn Malone and Barbara Wolveridge, who sold Elysian Retreat on Long Island to Shayne Smyth and Victor Island south of Mackay (to Kingdom Developments, it’s now back on the market), agree that selling islands brings out some colourful characters.
“We run into a lot of weirdos, people who say they have the money, who say the deposit’s in the mail, and then you never hear from them again,” says Malone. “Islands attract rich people, but also weirdos. We all seem to run into the same characters, so it pays to do your research and qualify buyers as genuine.”
Lizard Island was bought for $42 million in 2021 by Andrew and Nicola Forrest’s Tattarang Investments.
Just such an example was Poole Island in the Whitsundays priced at less than $1 million. A WA-based businessman signed a purchase contract and paid a $5000 deposit for the 20-hectare island but when it came time to settle, the buyer vanished. To weed out time-wasters and ensure there are no free holidays, Bunz says, prospective purchasers must pay for all flights and accommodation needed to attend inspections.
Genuine buyers are typically self-made high-net-worth individuals, and those that can draw on substantial equity and don’t require finance, he says. “In the past this has largely been from China, however there has been a shift in the last three years to domestic investors.”
Challenges in getting funds out of China, and pressure from Beijing to exit Australian investments amid the diplomatic tensions with Canberra over recent years, have all played a part in the reduced demand from this cohort.
An exception to the domestic-led wave of island capital is Singapore’s Well Smart Group, which picked up Lindeman Island and its former Club Med Resort in April for just $10 million – half the original asking price – from Chinese media mogul William Han. That deal came after local developer Shaun Juniper walked away from a deal at the last moment. Han paid $12 million for Lindeman and spent millions more on plans for a $600 million luxury resort before running into the same challenges facing other China-based owners.
Well Smart, which owns the 161-room Club Crocodile Resort in Airlie Beach and a number of big-city hotels, plans to “comprehensively” restore the former resort, which was also battered by Cyclone Yasi in 2011 and has laid dormant ever since. Well Smart director Jack Jia said there was a shortage of “environmentally conscious and family-friendly resorts” in the Whitsunday area.
The new Australian island owners appear to be following Chris Morris’ model for success; keeping their resorts small and exclusive. Glenn Piper says he plans to develop a “low-impact, barefoot luxury hospitality venue celebrating everything that the Whitsundays has to offer” on Hook Island. “We’ll definitely be taking inspiration from properties like Saffire down in Tasmania, Longitude 131 in the red centre, Bedarra and Orpheus [islands],” Piper told the Financial Review last year.
Shayne Smyth tells AFR Magazine the Elysian Retreat’s boutique nature – there are only 10 rooms – is part of its appeal. “It’s something we can enjoy, play with and do effectively,” he says. “A 170-room hotel is a different ball game. You need to be a significant player [to take on that challenge].”
The family purchased Elysian Retreat from the Rumble family for $8.75 million – a “low entry” and good value price point, according to Smyth. “Most of the islands that were cyclone-damaged, they’re asking $10 [million] to $20 million,” he says. “You’d have to spend money to demolish half of what’s there.” Elysian Retreat was acquired in very good shape and requires nothing more than “quietly improving what’s already there”.
Lindeman Island in the Whitsundays, once a Club Med resort.
It’s a short helicopter flight from Hamilton Island or Airlie Beach, and the Smyths charge more than $1000 a night (including meals, but not alcohol) to stay in the entirely solar-powered eco retreat. Smyth’s advice for those looking to buy an island is to make sure you know what you are committing to and have a “reasonable awareness” of the costs involved.
Morris, for his part, says he owns the “best private island in Australia”, even if it will cost you at least $6000 for a minimum three-night stay. “There’s a market for this sort of thing – you’ll pay up to $300,000 a week to hire a luxury yacht.” He plans to build a luxury $20,000-a-night lodge on Orpheus Island’s northern neighbour, Pelorus Island.
And once the luxurious new owner’s residence is built, he’ll have somewhere large enough for friends and family to stay, given booking multiple rooms at Orpheus is hard.
“In the past two years it’s not been easy to visit Orpheus because it’s been full.”
He would like to buy Double Island off Palm Cove, which has hosted Keanu Reeves, Brad Pitt and Jennifer Aniston. It’s not on the market but its owner, Hong Kong tycoon Benny Wu, who paid $5.68 million for it more than a decade ago, is facing pressure to relinquish the leasehold after failing to open it to day-trippers by an end-of-March deadline. “If it were on the market, I’d definitely take a look,” Morris said.
As for the future success of his island resorts, he says they’re harder work to run than the pubs he owns – such as the Portsea Hotel in Mornington – but they are a unique offering. “They are no longer building islands, and it is now impossible to build things like jetties anywhere near the Great Barrier Reef, so there is no competition.”
The pioneers
The billionaire Oatley family, long-time operators and developers of arguably the country’s best-known tropical retreat, Hamilton Island, were well ahead of the curve.
The island – which has its own runway, marina, numerous hotels, private homes as well as the exclusive Qualia resort, where a night’s stay starts at more than $1600 – was originally developed by the late winemaker Bob Oatley but is now in the hands of his eldest son, Sandy.
Sandy Oatley jets into Hamilton Island, which was originally developed by his father, Bob. Nic Walker
Other Rich Listers with islands in their trophy cabinets include pubs baron Justin Hemmes who, alongside Caledonia chairman Mark Nelson, owns a stake in remote Haggerstone Island off Cairns alongside its intrepid original developers Roy and Anna Turner, who established a lush orchard garden full of mangos and coconuts and built a home there in the late 1980s.
Later they added rustic villas, a jetty and other accommodation, which proved popular with the likes of the late Bob Hawke and wife Blanche d’Alpuget, as well as Lachlan and Sarah Murdoch. The island is accessible only by charter flight, and rates for a one-bedroom beachfront villa starts from $700 a night – up to $7000 if you want to have the whole island to yourself.
United Petroleum founders Eddie Hirsch and Avi Silver have owned Brampton Island off Mackay for 13 years; the pair purchased it and its three-star resort from GPT for $5.9 million.
Haggerstone Island off Cairns is part-owned by Justin Hemmes and Mark Nelson.
However, plans to develop a more luxurious “seven star” offering have never come to fruition, prompting Mackay mayor Greg Williamson to warn he will recommend that the Mackay Regional Council deny the pair an extension to the development approval that expires in July. (Hirsch and Silver declined interviews for this story.)
“Obviously they don’t have any intention of doing anything,” said Williamson. “And that just beggars belief.”
It may not be in the middle of the ocean, but Virgin Australia founding partners Brett Godfrey and Sir Richard Branson developed Makepeace Island, a small heart-shaped island resort in the middle of the Noosa River, and later brought in former Rich Listers Cathie Reid and Stuart Giles, as well as investment gurus James McBeath and Rikki Bannan, as co-owners.
Another wealthy Australian buying up island real estate, though some distance from the warm waters of tropical north Queensland, is Kathmandu founder Jan Cameron. She recently added a historic 100-hectare farm with a splendid near-200-year-old Georgian mansion at the northernmost tip of Bruny Island, off the coast of Tasmania, to her vast holdings on the Apple Isle. She paid a local record, $6.6 million, in the process.
When dreams turn into nightmares
Despite the obvious allure of owning your own piece of paradise, for every Orpheus or Lizard Island there is a tropical oasis that has turned into an albatross around the neck of its owner.
Around a dozen islands remain closed. Some, such as Dunk, Lindeman, South Molle and Hook islands, have been closed for many years after their resorts were destroyed by cyclones and, despite the best intentions of their owners, never rebuilt.
Dunk Island after it was devastated by Cyclone Yasi in 2011.
Just ask property developer Terry Agnew, who has owned Great Keppel Island since December 2005 but has yet to realise plans for a $600 million development to replace the famed “get wrecked” resort that has been closed since 2008.
With the ability to fly in a commercial jet, Agnew had ideas to develop a five-star Four Seasons hotel and golf course designed by Greg Norman. This would be surrounded by more than 400 houses and 300 apartments at the marina.
“But if you are going to play that game of owning an island, unless you have income, the banks won’t lend you a dollar,” said Agnew in 2021 of his stalled plans.
An artist’s impression of a spa villa at the stalled Great Keppel Island redevelopment.
When Agnew failed to secure one of two regional casino licences on offer, the big-name Asian partners never eventuated, and plans for the resort remain nothing more than impressive architecture drawings.
On the market since 2018, Great Keppel Island’s lease was under contract to Sunshine Coast-based developers Altum Property Group in 2020, but the deal fell over due to funding issues. In 2021, Gina Rinehart’s Hancock Prospecting entered discussions to buy the lease and build a world-class beach club, but decided not to proceed.
The Rich List issue of AFR Magazine is out on Friday, May 26 inside The Australian Financial Review. Follow AFR Mag on Twitter and Instagram.