If making the concentrated coconut milk, you will need 3 cans of coconut milk. Pour into a sauce pot and bring to a boil then reduce to simmer and simmer for 35 minutes or until the mixtures begins to thicken and can nicely coat the back of a spoon. Be sure to stir the whole time so it doesn't burn or boil over. Allow that mixture to cool and this step can be done a day or two ahead of time.
Preheat oven to 350 F.
Combine sugar, butter, eggs and vanilla in a mixing bowl. In another mixing bowl, combine the flour, baking powder, baking soda and salt.
Add half of the dry mixture to the wet mixture, stir. Followed by half of the reduced coconut milk, then the remaining dry mixture, followed by the remaining coconut milk.
Stir until a thick batter forms.
Pour into cupcake liners in a cupcake tin,
Bake for 18-20 minutes or until a toothpick can be inserted and come out clean.
To make the coconut frosting:
In a mixing bowl, with a whisk attachment blend all of the ingredients together until a smooth creamy frosting forms.
Frost cooled cupcakes and top with toasted coconut flakes.