Boat that's smart with name of island group (8)
I believe the answer is:
trimaran
'boat' is the definition.
(thesaurus)
'smart with name of island group' is the wordplay.
'smart' becomes 'trim' ('trim' can be a synonym of 'smart').
'with' means one lot of letters go next to another.
'name of island group' becomes 'aran' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'trim'+'aran'='TRIMARAN'
'that's' is the link.
(Other definitions for trimaran that I've seen before include "Sailing boat with three hulls" , "Sailing boat with 3 hulls" , "type of boat" , "Three-hulled yacht" , "Sailing vessel" .)