PL34 – 5th November 2003.

Posted by admin in Property Letters | November 5th 2003

Dear All,

This is primarily a quick reminder that I will be back in Cannes for a couple of weeks only, from 16th November.

There are a number of previously unseen properties waiting for me to visit as usual, and no doubt I will send out a Property Letter detailing the best of them a few days after I arrive there. It may well be a good opportunity to see some interesting products just at the beginning of the quiet winter period. It is no different in France to South Africa and perhaps the world at large, that property sales fall off in winter. Nobody likes to show a property for sale when it is wet, cold or dull, and the motivated sellers that there are out there find it harder to attract buyers. Therefore it can be a time of the odd bargain, and increased negotiating power from the buyers’ point of view.

If there is anything that I should know about your specific needs and wishes before I arrive there, please e-mail me as it is helpful but not essential to have an idea of people’s aspirations before I go in. It lends a little more focus.

Vicky will not be with me on this trip as our daughter Alice is in the middle of her final school exams, and Adam is writing his university end of year exams too. She’s full time Mum for the next few weeks!

A Price Guideline in the Market Today:

It goes without saying that anything we recommend is in a good position, we consider it to be highly rentable, and well priced. All factors such as condition and renovations required, noise levels and so forth have been taken into account.

Small studio apartments in the centre of Cannes cost – 100 000€ to 170 000€ depending on size, position and condition.
One bedroom apartments in the centre cost – 150 000€ to 220 000€ depending on the same factors as above.
Two bedroom apartments in the centre cost – 200 000€ upwards.

We are able to arrange mortgages of 40% to 80% for individuals or group buyers, depending on their circumstances and country, at 3.5% interest per annum (it was 4.1% a year ago). The interest rate is governed and strictly tied to the European Central Bank rate, and can only be adjusted once a year. The monthly repayment amounts never alter, only the duration of the repayment period, and that too is subject to a maximum increase beyond which it may not go.

The other main reason for this trip is detailed below in a section that I have simply copied from my recent Owners Letter. So my apologies go to owners who don’t need to read further because it is verbatim what you have already read.

Evolution.

I return to Cannes to sign contracts for the purchase of a third of an existing real estate and rental company. It is such a positive move for all of us. It is actually the answer to a prayer!

We knew that we had to get ourselves a “carte”, or licence to operate effectively in the real estate industry. Our own application was going to take years, with all sorts of bureaucratic criteria to be met, and that was why we had to receive payments from guests into your accounts first and then distribute from there back to laundry, taxi hire companies and AzurAccom. Cumbersome and really difficult to explain to corporate clients who booked multiple apartments that we needed payment in numerous smaller cheques to different beneficiaries! So we were negotiating to operate under another company’s licence and pay them for the privilege.

Also, we had to establish an office and a “shop front”. Lao and Katherine could not continue indefinitely with the office in their sitting room, and neither was it conducive nor professional when they had business meetings to conduct. Further, a lot of the rentals we had last summer came from “walk ins” off the street which were passed on to us by ‘our favourite real estate company’! We badly need this exposure to the bustle and throng of visitors that are a feature of Cannes, and were trying to work out how we could establish ourselves with an office, visibility in a good position, and all on a shoestring.

In early October the three co-owners (two sisters and a brother) of ‘our favourite real estate company’ approached me to ask if Vicky and I would be interested in buying one third of their company, as one of the sisters has to leave. Twenty four hours later all was agreed. It is a successful and wholly French, family run company with an office in a very good position in Cannes, and I felt truly honoured to be invited on board.

They clearly have identified our English/Southern African client potential, and the advantage of the English language which they don’t have. They also want to develop and grow the short term rental business, which they have seen us begin to exploit and as I said earlier have already helped us with, and they would like us to spearhead that development. (It is largely an English language market and they see its potential). All our property purchases now will go through the company, but it does not limit our ability to work with other agencies at all, rather it may enhance it, as reciprocal agreements between different agencies are quite normal and valued tools.

We like the people very much and after doing a great deal of business with them for a year and a half we know we can trust and work with them. They have the most necessary “carte” and as co-owners we now have it too. And the office is a great leap forward, not only as a work and meeting environment, but as a shop front and a source of ‘off the street’ bookings we didn’t previously have access to.

Lao will set up his office there on 15th November and I couldn’t be more delighted.

The family are very well established in Cannes and the region, and we only had a couple of days before I flew home to discuss the possibilities with regard to the rental business, but they were exciting, and included through existing contacts positioning ourselves as an ‘overflow’ for hotels, and closer links with the conference organisers. All this is in the future though and I will keep you updated as developments take place. I just want you to know at this stage that there are great things happening and wonderful possibilities emerging for us all.

If I seemed optimistic before I will be a pain in the neck now, because I think this is the biggest break we have had since inception and I am really excited about it! It is strange because one works and works and sometimes it is tempting to feel that the odds are stacked against one. Mugabe, Gulf War, SARS, economic downtrends, bush fires and goodness knows what else – and then that work is rewarded in unexpected ways like this, and with it comes the realisation that one has been building something good after all – one just could not quite see what.

On that philosophical note, the very best wishes of Vicky and I go to you all,
With kind regards,

Guy.

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