04 September 2015 – Financial Times
The Balearic island is the latest addition to billionaires’ sailing itineraries — and their property portfolios
Among the many problems faced by the super-rich that attract no trace of sympathy from anyone else is the scarcity of berthing opportunities for superyachts. The expanding size of these floating penthouses means few holiday island marinas are deep or wide enough to accommodate them. In most cases owners and their guests must suffer the indignity of being ferried ashore in a humble launch.
Since February, put-upon captains have been able to add one more location to the shortlist of shoring options. The Mediterranean island of Ibiza has held out the hand of friendship to the world’s billionaire nautical enthusiasts by rejigging the marina in Ibiza town. “Now superyachts up to 140m long can have a berth right at the very foot of the old town of Ibiza,” says marina administrator Isabel Teruel. It is doubly fitting, perhaps, because Ibiza has become an increasingly popular stop on billionaire sailors’ summer itineraries. It may also soon be one they add to their bulging property portfolios.
“The super-rich are increasingly fed up with high prices in the south of France,” says Edward de Mallet Morgan of Knight Frank. He says for the past 18 months sellers in leading waterfront locations such as St Tropez have started demanding unreasonable prices for homes in the coveted €5m-and-above bracket. As a result, a number of frustrated buyers are looking to buy in Ibiza instead.
Yachting billionaires are used to the sound of agents talking up the latest super-prime holiday island. So should they worry about missing this particular tide?
Possibly. Ibiza is a small island, characterised by a shortage of supply and if buyers do start to arrive, prices could rise quickly. “There is a massive shortage of product,” says Petra Lavin, of local agent Lavin-Estates, where buyers spent on average €4.25m on a home last year. She says she sold more in 2014 than at any time since 2006, and figures for 2015 so far are up on last year’s tally.
What does come to market often gets tangled up in Ibiza’s labyrinthine planning system. One client of de Mallet Morgan’s has bid on four properties priced above €3m since early last year; in each case the sale collapsed on the advice of private wealth managers or solicitors when planning permission.
David and Simon Reuben aren’t scared: the billionaire English brothers bought three miles of Ibiza beachfront in June for £25m, even though the planning permission had lapsed. While the vaunted boom at Ibiza’s top end may yet prove to be no more than a glint in a developer’s eye, there is no doubt that something is happening in the wider market. Listing prices for Ibiza on the Spanish property portal Idealista were up 4.3 per cent on last year, while the rest of the Balearic Islands (Mallorca, Menorca and Formentera) suffered a 0.8 per cent drop. Prices on mainland Spain fell 5 per cent.
Then Ibiza has long stood out from its neighbours. Its reputation as a glamorous hang-out was established well before it became a clubbing mecca in the 1980s. The first tourist guide was published in 1909, according to Stephen Armstrong, author of 2004 book The White Island (its nickname derives from the sand rather than the stimulant, he says). By the 1930s, Ibiza was a refuge for European artists, bohemians and general misfits. Film stars such as Elizabeth Taylor, Ursula Andress and Errol Flynn started arriving in the 1950s, ahead of the 1960s amphetamine-fuelled hippy invasion, which seeded the island’s hedonistic party culture. The super-rich are increasingly fed up with high prices in the south of France.
Like today’s settlers, they were attracted by the easy peace of the small island. Buyers of second homes here are among the youngest in the world, with 22 per cent aged below 40, according to Paul Tostevin of Savills World Research. Many enjoyed halcyon trips to the island during their youths and are returning, typically in their forties, to settle with a young family. They may reserve the option of the occasional all-nighter but it is privacy, rather than hedonism, they are seeking now. “A sense of isolation is important; they want places that don’t have any neighbours to disturb or be disturbed by,” says de Mallet Morgan. For Eden-seekers, local agent Terrapartner has a newly built finca — a traditional-style country house — with a separate guest house for sale in the hills overlooking Santa Eulalia for €2.75m. Further inland, Savills is selling a villa in Santa Gertrudis with an orchard for €5.25m.
British buyers are leading the charge. They have recently reclaimed the top of the Balearic-buying leaderboard from the Germans, according to Savills. Lavin estimates that 90 per cent of her Ibizan buyers are from London and “most of them are in banking”. No banker likes to lose a bet. And as the world was crashing around them in 2008, they would have been reassured that their Ibizan villas looked more bankable than some of their employers. “There were no real white-knuckle moments here during the crisis,” says Alexander Vaughan, founder of Barcelona-based agency Lucas Fox.
The good times are certainly evident today, with the superyacht set likely to find the $2,000 tasting menu — probably the world’s priciest — at new restaurant Sublimotion near Ibiza Town, both reassuringly expensive and, with only 12 covers a night, reassuringly difficult to book. And with the embarrassment of the launch boat now banished, there is little to hold them back.