When I read stories of huge, really huge, sums of money being asked - and given - for beautiful Fiji islands, I feel quite ill. There are many websites of dealers advertising the sale of Fiji islands. Here is a sample from the Lau group. http://www.luxuryrealestate.com/74726
Lau Group, Fiji
• Property Info
• Web #: 74726
• Price: €25,000,000
• Lot Size: 230 acres
• Status: Active
• Type: Residential
• Category: Island, Ocean, Private Islands, Tropical, Villa, Waterfront, Water View
If you read that website and the desciption re Blue Lagoon etc. just imagine how you would feel if your relatives live nearby who are subsistence fishermen, or even your ancestors once lived or fished from this island?
The land grab by foreigners in the late 19th century was obscene. Paper titles were not understood by the local people at that time. A few muskets to give power to a chief, a blanket or two, for huge stretches of land or an island or two.
W.
Subscribe to:
Post Comments (Atom)
24 comments:
The island in question is Katafanga Island in the Lau Group, site of an unfinished resort. A new investor would have to spend millions of dollars finishing and promoting the property to tourists, who would bring additional millions to Fiji over the years. Residents of nearby islands would have job opportunities in their own neighbourhood. That can hardly be a bad thing for Fiji.
Hello David. Nice website!
Okay, yes it sounds like Katafanga, with the cute name change to Blue Lagoon, and I discovered that it is currently not accepting tourists and is incomplete.
Who currently owns it?
I wonder what the Lauan people think about all of this?
Job opportunities - well, would you work for $2 an hour when you could go fishing or make mats or sit under a mango tree and tell stories. Working in resorts ain't everything. Sometimes the staff are treated as servants and not real people. A very real kind of class system.
W.
I'm not sure who owns it but you can check them out at http://www.katafanga.com/ which is a rather misleading website as it quotes exact prices without bothering to mention that the resort has never opened and construction is currently stopped.
Job opportunities for the Lauan people? I was just reading somewhere that 27 percent of jobs in Fiji were tourism related. That proves that a lot of Fiji residents feel those jobs are worth holding.
Going fishing or making mats or sitting under a mango tree and telling stories? Forgive me but you seem to have a rather parochial view of the Fijians. Do you pay for your internet connection with money earned from selling the mats you weaved? Or is Fiji a zoo where people should live as they did before Abel Tasman arrived? Not many Fijians wear grass skirts anymore.
Oh dear! You have taken my words literally! I tend to exaggerate! Of course several of our relatives and even our grandchildren use the internet in Fiji.
I still find it offensive that tourists may pay $400 a night and the girl cleaning the room gets $2 an hour.
W.
Of course you're right about the low wages, and in Fiji, tipping isn't usually done. Maybe concerned visitors should just try to avoid staying in the $400 resorts and patronize establishments owned and operated by local people. There now loads of such places in the Yasawa Islands, and you'll find them all around Viti Levu and Vanua Levu. Any place which charges under $80 for a double room is probably locally owned.
Anyone seen Vatuvara island on the market?
Yes, it's sometimes called Hat Island. When I did some detective work I found five islands for sale. Not happy about it. It just emphasises the difference between those with the power of great wealth and ordinary people like us. Maybe I'm a socialist at heart after all!
The Fiji newspapers are writing about this topic now I noticed.
I don't mind non-Fijians coming to live in Fiji, but fair's fair. Keep the Fiji spirit of sharing a bit hey! These islands are advertised with the hype of - hey, get away from the papparazzi and find your own dream island. Well, how selfish can you get!
W.
does anyone know who the owner of Katafanga is this is very important
Does anyone know why the development stopped on Katafanga Island. It also seems like there is a problem with being that its been on the market for almost five years.
For twenty years Katafanga was owned by David Blackley, one of the last private adventurers, who retired to "Summerhill" the farm he developed in the ranges behind Tauranga in the Bay of Plenty in New Zealand. His book "Born to Adventure" ISBN 0-476-00192-7 recounts his efforts to tame Katanaga, and many other hair-raising experiences besides.
What a load of crap. People have to make money somehow and at the end of the day the reason people usually whinge about the differences of the "haves and have nots" is because they "have not".
Whilst you guys also only see the $400 a night price tag, I'm not sure that you realise the logistical nightmare of operating a resort on an outlying island. Have you ever freighted something to a small country in the middle of nowhere? Didn't think so.
One quick example. How about a small 2kg package that costs $200 to ship to Fiji then gets lost with Fiji Post and needs to be paid to "be found" again? instead of the $10 it would normally cost in Australia? Oh, did I mention that the same parcel going to Fiji takes 3 weeks sometimes (via air freight?) and might possibly never arrive if one of the postal workers decides it would look good at their home?
Whilst you may be thinking inflated prices, when you work out the costs of running an operation like this, I can assure you the $2 an hour wages is sometimes all that's left.
From someone that has struggled their guts out and works 80-90 hours a week (this includes my day job) and just bought myself my first island resort recently, it really gets my goat that people can sit and make judgements with the underlying sentiment seeming to be "that lazy buggers just bought an island" when in reality whilst these people online who like to whinge about the "haves and have nots" and probably sit at the pub or coffee shop talking about what this person or that person has instead of getting some for themselves, other people (such as island owners) were working their second and third jobs to see their dreams instead of just talk and BS, instead come to fruition.
Anyway, now that my rant is over, the person who owns Katafanga is actually the owner of one of the sea-plane companies in Fiji. He's gotten to retirement age and has decided to sell the island (and the sea plane business).
An aquaintance of mine, Doug who runs Carribean Island Brokers mentioned that he might be interested in offers if there are any takers? $10,000,000 might get you a foot in the door or you might be able to strike up a deal with the owner directly or make some kind of arrangement if your talk matches the walk and you're willing to risk everything on the roll of a dice.
I did make some initial enquiries about purchasing Katafanga a while back but have decided to wait until I have some excess funds and stabilize my own resort before I go to the next step.
Anyway, hopefully that takes care of the mystery for you and debunks the myth that all these island owners are "poor little rich kids" and instead behind these mammoth operations are some very hard working adults who are trying to break out of the "poor me" model that the people with money will tell you is "your lot in life" and make something of worth for their families instead of just laying down and accepting their fate and simply talking about it like 99% of the plebs in the world find it preferable to do.
Oh, and another thing: these resorts are actually responsible for the building of most of the schools around the islands, implementing the infrastructure, providing the government with the taxes to fund the paved streets and offer airport shuttles to people like you that find it offensive that $2 an hour is a crap wage. You're always welcome to pay higher accommodation rates if you want the staff to earn more you know. Go stay at Laucala for $70k a night, I'm sure their staff don't earn $2 an hour.
In case you didn't know, most resorts are on leased land and as part of their agreement to borrow land off the Fijian people, we provide them with funds to educate their children, buy fishing boats for them, build houses in the villages, piers, provide work, kava, local industry with projects and are the lifeblood of the Pacific industry.
Have I said enough yet?
http://www.ftib.org.fj/fiji-joint-venture.cfm
This might help you if you are interested in ever doing something like you're all drooling about that someone else can do but not you.
You can do it if you believe it, you know. I never thought it was possible until I started doing some research and made some enquiries.
If you show the initiative there's plenty of business mentors that will help you build your dreams.
We don't usually get there on our own, you know.
Live (and love) the dream is all I can say guys.
The close proximity of island territories to each other makes the region a sailing haven… land is never too far out of sight when sailing the Caribbean.
Private Islands for Sale
Critical analysis of Katafanga Island Resort and Spa offer (posted in three parts)
* I’ve done much research and analysis of Katafanga Island Resort and Spa (KIRS; sometimes Blue Lagoon Island). The island, beach, reef, and lagoon are indeed incredibly beautiful, and the remote location is very private. I would love to be there in September when the dolphins calve in the west lagoon.
* But while I started off neutral, my careful due-diligence-like analysis of the owner’s offer leads me to be highly critical of Katafanga Island Resort and Spa. In my opinion the island has been over-hyped, the claims are unsubstantiated, and the offer is grossly over-priced. This is what is driving me to present some (hopefully) objective balance.
* The owners excessively use flowery words of, “truly world-class ... ultimate vacation destination ... with exquisitely-furnished lavish-bures (villas) ... and experienced spa professionals and world acclaimed chef” (these are THEIR words). In my opinion, even their valuation ‘expert’ came across as an excited marketing department employee; I’m highly sceptical of the valuation findings.
* As for true business value, keep in mind is that while they have invested some money (such as on the gravel roadway, generators, water), they are NOT in operation or resort-staffed, and have only STARTED on the buildings and other infrastructure such as the runway and marina. And it appears that since 2003 there has been virtually no work done (and this was after a couple of years of slow-down). The corollary is that none of the above hype actually yet exists and is proven.
* Furthermore, the incomplete building skeletons and infrastructure have been sitting there exposed to the elements. For example, the roof supports appear to be rusting notably, and would have to be rehabilitated at added expense before construction could even resume.
* Establishing a luxury resort is a major undertaking; so the recent attempt to use near-volunteer labor of a few people to do small bits of construction is totally insufficient. I can’t help but conclude that such trivial steps are intended to give the illusion that the business is not defunct. An analogy: painting the outer walls of a defunct, hollow factory.
* The matter of whether the ‘business model is proven or at least justified’ is the next thing to keep in mind. The company's 'confidential' offer memorandum describes their model/plan/projections. They appear to make some overly generous assumptions about income rates and occupancy. Remember, there are many tropical resorts world-wide, and only a relatively few people willing to pay such high rates – it seems that even some established luxury resorts in Fiji don’t charge as much as KIRS plan to, and still don’t accomplish KIRS’s projected occupancy.
* Also, KIRS appears to be unduly optimistic in how low their costs will be. Remember, this is a very isolated location, with few supply options, and all of those are expensive and rarely occurring, and imported labor.
* Basic business is that profit equals income less expenses. Using some of KIRS optimistic numbers, I calculated that the operation of the resort would only just barely be profitable. This is the best case scenario. Moreover, it appears that it would take extremely little ‘adverse reality’ for the resort to be losing money.
(part 2)
* As for the business decision on return on investment, a key consideration is recuperating capital costs. As far as I can tell, the ‘confidential’ offer memorandum completely ignores this; they seem to think that only the resort ‘operation’ needs to be profitable. An analogy for why this is flawed: if I buy the island for $25M, then operate a coconut stand for passing boats wherein I earn $200 a year less $10 for the cost of harvesting the coconuts, I am making an incredible profit in the same model as used by KIRS ... but in reality I am NOT factoring in all elements of determining a return on investment. A subsequent analysis of this consideration indicates that low-rate T-bills still perform better, even when using their optimistic numbers.
* Business is a cold, sober calculation; coldly, I conclude that the Resort and Spa as presented is economically unviable. Dreams won’t change what is unviable. I highly suspect this is the main reason they stopped construction; they probably did some more-realistic number crunching, and discovered they were getting themselves deeper into a losing proposition.
* Additional ‘business’ considerations: their numbers are hard to follow, inconsistent, and seemingly unsubstantiated. Additionally, they use US$ for the asking price, yet sometimes the listings bandy about investments costs without making the distinction that the latter are in Fiji dollars (which are about 0.5 US$). Also, the price of the island factors in the investments that they claim they have already made, even though some key assets appear to now be gone (such as the air-arm and the shipping-arm). Using their numbers (and not deducting any depreciation or deterioration), I estimate the remaining investment to at best be US$6.9M. Obviously, most of these assets are of negligible value if KIRS is not viable. Finally, the above business decision doesn’t even start to factor in the notable risk associated with the uncertain and at times dubious political situation in Fiji.
* So if the resort business is not viable, then the island is only worth what it can be sold for as just an island to be used for personal-only purposes (unless you are government, and believe in reimbursing people for their failed investments, and in this case apparently an attempt also for a failed good-will premium). The owner says he purchased it for $2million in 1992. In 1999, prior to substantial construction, there was apparently a valuation of $10million (I presume in US$). This MAY have been sort of reasonable - BUT ONLY AT THE TIME. Island prices are fickle, and go up and down a great deal. So first it had gone up in a big jump, and now I gather that the world market for islands has dropped in price by some 40% or more (including because of the economic crisis). Also, don’t forget to factor in the cost of removing any of the unsightly resort skeletons that you won’t need for personal use (would YOU want to live amongst such ‘ruins’?).
* A comparison with other islands: nearby Mango (sometimes Mago) Island (5000 acres, as I recall, compared to 225 acres here) went for $14.8millon (before the recent economic downturn). Also, there is currently (January 2011) a Fiji island only moderately smaller than Katafanga but MUCH closer to communities and tourists centers that is being offered at US$7million (and this does include a good-will premium for an apparently viable resort business plan). World-wide there are many other good options at comparable or lower prices.
(Part 3)
* It seems that in their hype KIRS also like to wrap themselves in the aura of the most successful resort islands. For example, they cite Branson’s Necker Island. Similarly, they play up that their architects worked on Disney and a Jack Nicholas course.
* An analogy to KIRS hype: my old Mazda has similar sweeping lines to a Porsche Turbo S – all that is needed is for someone else to buy it and invest in a ‘Fulfil Your Dreams’ revamp to bring it up to the same ‘lavish’ standard, and then convince hundreds of people to pay a grand each for a ride. My Mazda is even rare (well, it is the only one left in my ‘hood); I hear that restored rare antiques are worth even more. I’ll accept the premium for all of this, and you do the rest.
* Katafanga has apparently been on the market since 2005. It will likely be on the market for many more years, unless the asking price is dropped considerably (say to $US7m?). Or perhaps they are hoping for some bedazzled suddenly-flush celebrity to foolishly rush in before he (I doubt it could ever be a ‘she’) has retained a business manager.
* (note: these are all just opinions; also, all of the facts that I have are from the internet (but I have strived to substantiate them). I approached KIRS to input additional data into my analysis, but they rudely declined and did not seem to be interested in either an objective analysis or even in facts. Never-the-less, I still welcome their input, preferably as CREDIBLE facts. I’m K.R. at KatafangaReviewer@yahoo.com)
It is really shocking news that Fiji Island for sale. It is such a shame, shame.. Fiji islands were sort of discovered in 1643 by Abel Tasman, a Dutch explorer.
I visited Katafanga Island in January of 1993, just a few days after Cyclone Kina passed over the Fiji Islands. I was staying on the Island of Vanua Balavu about 25 miles from Katafanga. There I met the Warren family from New Zealand who had permission from the owner of Katafanga to reside there from time to time. Mark Warren, who was on the island of Vanua Balavu picking up suppliess, offered to take me by boat for an overnight visit. After a 2 hour ride in very high high seas we arrived at one of the most beautiful islands I have ever stepped foot on. A very magical place, and also Very remote. I was fortunate in that my visit was before any development had begun. Many thanks to the Warren family for their gracious hospitality and giving me the opportunity of a lifetime.
John Allender
A great post without doubt. The information shared is of top quality which has to get appreciated at all levels. Well done keep up the good work.
Thank you to tell us so much useful information. So nice sharing. I’m glad to read it.
Anonymous above is right. Even if the island were 'ready to go' i.e. all development work was complete, and no further costs were incurred in the running of the business (impossible), it would still take nearly 7 years to recoup the purchase investment price. And that assumes maximum occupancy (365 days p/a) of all 20 villas @£400 per night. If it took $20m to get it where it is, repair work and further additional work to completion would (at a very rough & very conservative guess) need the same again, taking the break even point to just over 13.5 years. Add in overheads - fuel, food, staff, maintenance, equipment etc etc (bearing in mind it's a luxury resort, so only the best please) and 'break even' let alone profit starts to move into the unforeseeable distance.
Personally I'd love to be in a position where I could spend the kind of money needed to buy, but not as an investment. It's an absolutely stunning place and deserves to be looked after. I hope that whoever ends up with it doesn't screw it up beyond repair.
Lets not forget that the islands remain owned by the local tribe who get an annual return on the island. Also lets not forget that no matter what country we live in the workers always get paid $X amount of dollars per hour whilst the people who spend and invest in the company get a return for their investment. The only difference is that the return to the worker differs according to the local economy. Even though the local worker in Fiji may only get $2 per hour in some cases it is generally enough for them to live on just the same as $15 in NZ is enough for them. The Fijian people are lovely people and generally happy with their lot but if the pay rates were hirer then you would be paying more than $400 per night. So ultimately if the tourist didn't come and stay the workers would not have a job and as there is no welfare system in Fiji everyone would go hungry. You have to look at the bigger picture and not just take a portion of it to bitch about.
Katafanga Island has never had an indigenous population and is not leased from the Figi people, but a freehold property.
Hello, everyone we offers international loans. With the capital used for long-term loans etc, also we give out loans at 2% interest rate so if yes you are really serious in need of a loan to pay off your bills or settle your debt please contact us at our company email address: johnleoloancompany@gmail.com or whatsApp number: +1(571)-489-7172
Post a Comment