notes that only three of the 21 islands in the Conflict Group are big enough to use. But like Vladi he also believes the investment opportunity is unique and they could be worth double the asking price: “They could sell for much as $50 million on the upside if the owner was willing to sell to anyone, say, a Russian oligarch or casino operator in Macau. But with the conservation caveat, they are probably only worth between $20 million and $30 million.” “The buyer,” he continues, “could be an NGO or a high- net-worth individual who wants to create a lasting legacy by preserving a biosphere instead of trying to land on Mars, because this is something that can be preserved not only for our lifetime but for generations to come. As a comparable, I would point to Palmyra Atoll,” he says, referring to a group of 55 American islands 1600km south of Hawaii that was sold to the non-profit Nature Conservancy for $37 million in 2000 – $10 million less than the valuation. “But Palmyra is in the middle of nowhere. The Conflicts are much more accessible,” he says of their strategic position only 960km from the Queensland city of Cairns. Yet this last selling
point may prove a sticking point when it comes to finding a foreign buyer for the Conflict Group as a result of rapidly changing geopolitics in the region. Australia has for decades harboured deep-seeded fears of the establishment of a Chinese naval base in the South Pacific. Those fears are not unfounded when one looks at the disputed Spratly Group in the South China Sea where, according to the US, China has fully militarised three artificial islands and armed them to the teeth with everything from anti-ship missile systems, to laser and jamming equipment and fighter jets. China refuses to deny or confirm the allegations. Australia’s fears of a Chinese naval base in the South Pacific shot into overdrive after the Solomon Islands signed a highly controversial security pact with China in April last year – the latest example of the Middle Kingdom’s rapidly growing influence in its backyard. A survey by the Australian Institute, a think-tank based in Canberra, found that 10% of Australians believe China would invade their country “soon” compared to only 5% of Taiwanese. “There are the Conflict Islands. Conflict by name. And potentially conflict by nature,” said a reporter on A Current Affair , a tabloid Australian “The Conflicts’ greatest bounty is found not above but below the gin-clear waterline where fish pulse around coral gardens more spectacular
A white-bellied sea eagle
based in Hamburg with 50 years of industry experience, also believes the Conflict Group is very hard to value as it is “full of” positive intangible assets. “With intangible assets, people can have very different opinions on the price – low, middle, high, which makes the completion of an appraisal from such a far distance extremely difficult.” Yet he also notes the investment opportunity is unique. “Papua New Guinea generally doesn’t allow foreigners to buy freehold real estate, only leasehold is allowed. But the Conflicts have a freehold title, which is unique, so I think the value of the island is substantiated at $25 million.” Bill Barnett of C9 Hotelworks, a market research firm based on the Thai resort island of Phuket, executed an on-site valuation of the Conflict Groups in 2017. He
A surgeonfish school hovers over an anemone at Irai Island reef
than bursting supernovas”
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