A LASTING LEGACY • COUNTING THE COST
J U LY - A U GU S T 2014 I S S U E 26
MENA’S MOST
VALUABLE RESOURCE
FOR RAMI QASEM, TALENT AND INNOVATION WILL FUEL
THE FUTURE AT GE OIL AND GAS.
UAE .............................. AED 30
SAUDI ARABIA............SAR 30
BAHRAIN ..................... BHD 3
KUWAIT ................... KWD 2.5
QATAR .........................QAR 30
OMAN ..........................OMR 3
OTHERS ...............................$8
FORBES MIDDLE EAST
CONTENTS — JULY - AUGUST 2014
ISSUE 26
58
MONEY & INVESTING
58 ISLE HAVE ONE OF THOSE
Attracting investors from the Middle East and
beyond, Chris Krolow’s Private Islands Inc. sells
slices of secluded bliss.
By Helen Morrogh
ENTREPRENEUR
62 PEACE, LOVE AND ICE CREAM
The original ‘70s-born bohemian ice cream parlor,
Emack and Bolio’s, is still churning out hormonefree, zany flavors like Caramel Moose Prints and
Depp Purple Cow, but now the booming Boston
business has landed on Arab shores.
By Joanne Al-Samarae
COVERAGE
66
66 TRIUMPHANT TIMES
In an exclusive Forbes Middle East event held
in Dubai, a stellar lineup of distinguished guests
honored the exploits and triumphs of the Top 500
Companies in the Arab World.
LIFE
74 THE LAST VIRGIN ISLAND
Longing for an unspoiled paradise in
the Caribbean? Guana is a wildlife sanctuary
with a cocktail hour.
By Michael Solomon
74
TECHNOLOGY
76 BOOTSTRAPPING TO THE STARS
XCOR proves that you don’t have to be a billionaire
to break into the space tourism industry. Some
clever lease-financing skills will do.
By Alex Knapp
HEALTH
78 ON YOUR FEET!
How sitting might contribute to certain cancers.
By Alice G. Walton
80 THOUGHTS
6 FORBES MIDDLE EAST JULY - AUGUST 2014
FORBES MIDDLE EAST
MONEY & INVESTING
REAL ESTATE
Chris Krolow, CEO of Private Islands Inc.
Attracting investors from the Middle East and beyond, Chris Krolow’s
Private Islands Inc. sells slices of secluded bliss.
By Helen Morrogh
58 FORBES MIDDLE EAST JULY - AUGUST 2014
IMAGE FROM SOURCE
Isle Have One of Those
I
magine a world in which you
are surrounded by turquoise lagoons, your daily vitamin intake
is plucked from the fruit-laden
jungle that is your backyard and the
only traffic on the roads—if there are
any—is you.
For Chris Krolow’s clients, this
idyllic existence is a reality. He is
CEO of Private Islands Inc. and from
the lush green isles of the Atlantic to
the untamed archipelago of French
Polynesia, he is in the business of selling little pieces of heaven.
The idea came 15 years ago when
Krolow, then aged just 25, was running a tour company taking German
holidaymakers to Ontario. For the
tourists, the highlight of these trips
was camping in the remote islands of
the province’s national parks, where
they would eat beans and hot dogs for
dinner. “They were very rustic tours,”
smiles Krolow. But, crucially, they
were a hit.
It wasn’t the choice in cuisine that
appealed to the visitors, nor was it
spending the night in a tent; the young
entrepreneur’s tourists had fallen
completely for their surroundings and
utter isolation from daily life. During
those island hours, frankly, nothing in
the outside world mattered.
Encouraged by the feedback he received from customers, the Torontobased businessman started researching the private island market. “I wasn’t
sure if there was a demand out there,”
he says. “I thought I could just be crazy.” But if he was crazy, so, too, were
others. He quickly found 12 islands
in Canada being sold by their owners.
And when a stranger flew him over
to Panama to sell his island in Belize,
Krolow knew he was onto something
big.
He set up Private Islands Inc., a
lone venture, in 1999. Now, the company has over 600 islands on its books
and a luxury magazine in its name,
while the 39-year-old fronts a US and
Canadian TV show, Island Hunters.
The Canadian didn’t just find a market
What I learned really
quickly is that people
looking to buy are
not looking in one
geographic area
for private islands, he uncovered an
Aladdin’s cave.
While a brief browse on the website will show properties many miles
north of the $50 million mark, most
purchases through Private Islands Inc.
come in under $1 million. “These are
people looking for a second or third
vacation home,” says Krolow. The
more expensive islands, meanwhile,
attract those who want to develop
boutique resorts, while having their
own residence on another side of the
island.
When it comes to purchasing an
island, it is a cash-in-hand transaction. “Banks will very rarely lend you
money to buy an island,” says the
founder. So those who do buy already
have the money in their bank accounts. As the website puts it, owning
an island is much more than possessing something paradisiacal, it’s ‘knowing that you’re the kind of person capable of attaining it.’
Most islands are bought on a freehold basis, meaning the buyer has full
ownership. However, government restrictions in Asia and the South Pacific
often prevent foreigners from going
down that route. In such cases, islands
can be purchased on a leasehold basis
for anything between 30 and 99 years.
While freehold is the preferred option
for most, the leasehold option tends to
be more affordable.
Krolow explains that much like
real estate, a deposit must be made,
insurance arranged and due diligence
sought, followed by payment, after
which the deeds are handed over.
However, getting to that point is a
lengthy process and finding the right
island and arranging to view it can
take time. Every purchase also comes
with inevitable twists along the way.
Concrete data on the private island industry is scarce, though there
are a number of agencies which also
sell islands, including Vladi Private
Islands and real estate brokers Knight
Frank, Sotheby’s and Savills. Research
by Knight Frank shows that interest
has increased dramatically since the
global economy started showing signs
of recovery—but, importantly, this
doesn’t always translate into sales.
The revived interest probably has
a lot to do with the current price of
islands. Much like real estate, the
economic downturn has had a direct
impact on the price tag attached to islands, and Vladi Private Islands report
that many sellers have been forced to
sell well below the asking price. That
said, June 2012 saw the most expensive
island sale to date when Larry Ellison,
Co-founder of Oracle Corporation,
bought Lana’i, the sixth-largest island
in Hawaii, for a rumoured $500 million. Despite some rare exceptions,
the consensus amongst private island
agencies is that while the industry
took a hit during the credit crunch,
thanks to deflated prices, sales are on
the up.
According to Krolow, most prospective buyers tend to have a few basic requirements in common: a warm
climate, pristine beaches, sandy elevation and deep water access. He recalls
a number of occasions when clients
had their eye on an island until they
tried to sail their yachts to them, only
to discover the multi-million-dollar
boats were too big for the shallow waters.
What is not top of buyers’ priority list, meanwhile, is location. “What
I learned really quickly is that people
looking to buy are not looking in one
geographic area,” says Krolow. One
client, explains the company founder,
recently bought an island in Panama
and has to take two flights followed
by a 45-minute boat trip to reach his
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MONEY & INVESTING — REAL ESTATE
60 FORBES MIDDLE EAST JULY - AUGUST 2014
Shelter Island
Montana, USA
$59.5 million
Boasting unrivalled views of the Rocky Mountains, Shelter Island Estate is located on one of the cleanest lakes in the world,
Flathead Lake. The stately home of Shelter Island spans over
32,000 square feet, while the breathtaking Glacier National
Park is a short helicopter ride away.
Buck Island
British Virgin Islands, Caribbean
$30 million
Sitting just off the south-east shore of Tortola, the largest of
the Virgin Islands, this tropical hideaway offers rocky cliffs
and long stretches of white sand beaches. The residence
houses over 20 occupants with spectacular views.
IMAGES FROM SOURCE
piece of paradise. Peace and quiet may take time to
reach, but for Krolow’s clients, it is priceless.
On the other side of the globe, the CEO is eyeing
up islands in the Maldives and says he has a number of
prospective buyers from the Middle East. Lined with
coconut palms and beautiful coral reefs, the romantic
shores of the Maldives serve as the ideal location for a
private residence.
Private Islands Inc. is also looking towards Dubai,
and Krolow has his sights set on filming an episode
of Island Hunters in the emirate now that work on the
recession-hit World Islands has resumed. “I think it is
going to kick off again,” he says. “It would be amazing
to do an episode there.”
The entrepreneur is most passionate, however,
about his own islet, Deep Water Island, in Ontario’s
Georgian Bay. He refers to a condition called ‘islomania’. “It’s real; I have it,” he says. “It feels like something
very different when I’m there, like I’m king of my own
kingdom…It’s like having this small piece of the world
that you’re responsible for.”
Just a few minutes of talking with Krolow about his
treasured island is enough to see that it is a lot more to
the business owner than a pile of rocks in the middle
of a lake. “From a distance it looks like a whale’s back,”
he says. “If I could, I’d spend all of my time there.” He’s
not the first person to become emotionally attached
to his little atoll in the water. Every so often, Krolow
will speak to a seller unable to hold onto their island
any longer, but unable to bear the thought of letting
go. “I’ve had plenty of clients on the phone crying,” he
says. “A lot of them are pilots who are too old to fly a
plane anymore, but the thought of selling their island
is devastating to them. It can be very sad.”
It is not an emotional attachment everyone can
afford to have and owning an island is a luxury, ultimately, fit for royalty. But before potential buyers
start shopping for a suitable throne from which to
rule their mini kingdom, there are limits to just how
much sovereignty they can have over the land they
buy. Essentially, those who buy their own island are
still subject to the same laws and jurisdiction to which
the island belongs. “We do get groups of people wanting to set up their own cults or countries,” says Krolow.
“There are all kinds of interesting ideas out there. But
at the end of the day you’re subject to all the same
rules, taxes and development restrictions as everyone
on the mainland.”
But, if the only sound you wake up to in the morning is mangroves blowing in the breeze, or water lapping up on the shoreline, that’s something most people
are willing to live with. Not bad for something that
started over baked beans and hot dogs.
Hitchinbrook Island
Yadua Island
Australia, South Pacific
$4.5 million
Fiji, South Pacific
Price Upon Request
Surrounded by the Great Barrier Reef, the island consists of
20 acres of lush tropical wilderness and has resort facilities
that can cater up to 50 guests. It is available on a leasehold
basis for 50 years.
One of Fiji’s gems, Yadua is located in the Mamanuca Group,
the most popular tourist destination in the archipelago. At
the top of the island are the remains of a volcanic crater; the
ideal secluded mountaintop retreat.
Casco Bay Island
James Island
New Brunswick, Canada
$1.5 million
British Columbia, Canada
Price Upon Request
Summer months at Casco Bay Island are bursting with life, with
residents including whales, porpoises, seals and bald eagles. The
island is surrounded by protected coves and beaches, while inland is rich with untouched spruce forests and plant life resplendent with fruits.
This exclusive retreat in Canada’s famous Gulf Island’s features 780 acres of lush green pastures, pristine beaches and
grassy dunes. As well as exhibiting a diverse ecology, it is also
home to the stunning 18-hole Jack Nicklaus Signature golf
course.
JULY - AUGUST 2014 FORBES MIDDLE EAST 61