PL37 – 23rd February 2004.

Posted by admin in Property Letters | February 23rd 2004

Dear All,

I have been in Cannes for two weeks now and Vicky for one.

We have seen some interesting and some lovely properties and are continuing to visit more with various visits lined up for the coming week.

In the meantime I will report below on some of what we have seen and those that we would recommend so far. However I will talk a little first about a couple of points of interest and relevance to some of you. If you would rather just get to the properties please scroll down through the chat and go directly to PROPERTY REVIEW at the end.

THE GSM CONGRESS – and some interesting aspects.

It begins today, runs for the week, and is the annual world gathering of cell phone companies. Nokia, Siemens, Motorola are all here, but also every imaginable support and allied industry. Cannes is ALIVE, roads are blocked here and there, and the front (The Croisette) is scrubbed and shining and hospitality tents the size of circus tents line the seafront for a kilometre. What a party this week is going to be! Huge lasers are set up to illuminate the skies at night and wonderful fireworks shows will explode across the bay.
It is Cannes’ second biggest event of the year, hosting 40 000 delegates! Only the Film Festival is bigger.

We little fish have all of our apartments booked out, being 33 in total. And Lao has spent the last two days since delegates started to arrive on Friday from all over the world, meeting and greeting. He has a hellish schedule – with first meets at the airport typically starting at 07.30 and ending at 22.30. Others arrive by bus (from the airport) and still others by train. His phone never stops – he and Katherine are on permanent call, not only to meet and greet but to help and advise and attend to lights that trip out, heating that won’t come on, shutters that won’t open or close, toilet cistern ball floats that are stuck in the up position, so not refilling (needing a gentle knock first time). All minor things but the guests need support, and it is incredibly time consuming.

But for Vicky and I the real education was in helping during last week in preparation for the guests! We have worked our fingers to the bone!
33 apartments to prepare, clean and check that everything is working. We have scrubbed, assembled furniture from kits (some from Ikea in Toulon 100 kms away, which arrive with bits missing!), moved beds and sofas up and down stairs and from one apartment to another. We have loaded builders debris and junk and old and broken furniture into the cars and hauled it to the dump. Then off to change and clean the car to get to the airport to meet someone (in a clean car and clothes if possible). We have had plumbing disasters and floods at the last minute, electrical failures, and late deliveries. Pressure resembling the tobacco ripening flush when the barns were not ready to be filled – the furnace had not been built yet, and the roof had still to go on! I feel I have been here before.

However as of this afternoon (Monday) every apartment is pristine! And by this evening when the last guests should arrive every one will be let.
When every thing that you do you do for yourself, because if you call in help it costs 20 or 30 Euros an hour (if you can get help at short notice) it really makes you realize the magnitude of the job. There is ware and tare in these apartments and every single detail has to be checked every time there is a new let.
And every guest has their own special needs, wants or problems. All need attention.

LETTING – THE REALITY AND FUTURE PROSPECTS.

There are a few major issues with investment in property in France, or anywhere else I suppose.

The first are capital appreciation and rental income.
Beyond that and of varying degrees of importance to different categories of investor are issues such as tax shelter and leveraging of ones limited capital.

Capital Appreciation.

This remains the main reason people invest in property and the main and surest driver of wealth accumulation over time. For those of us who have invested in Cannes in the last two years there has been a pleasing gain of about 15% p.a. (and in some cases much more) and we are happy with that.

Rental Income.

Our aim is to achieve higher rental incomes than would be expected elsewhere, and to attempt to achieve for owners a cash surplus after mortgages and costs (easier when the mortgage is 50% than when it is 80% of course). We are situated in one of the most dynamic and beautiful parts of Europe and we have almost year round sunshine. We provide the venue for many festivals, congresses and business get togethers of course, but we need to capture rentals between congresses too and we are working very hard to achieve that .
But we have had a difficult start.

2004 was a horrible year in France.
• The economies of the World, Europe and France in particular were not inspiring of confidence.
• The war in Iraq took the wind out of the sails of the travel market.
• Chirac and Bush had major policy differences so Americans not only boycotted French wines and perfumes at home, they also did not travel to France!
• The Euro has increased in value by somewhere close to 40% against the US$ (and 20% against the £) in 18 months making it expensive to travel to Europe for Americans and Brits alike.

It may sound like ‘excuses’ but the reality is that the official figures for visitors to France indicate a 40% decrease in 2003 over the previous year, and 2002 was lower than the year before that.

• We were in our first year of renting in 2003, and very new in the business.
• Our website was built last year and in 2004 is working very hard for us. It is gaining prominence all the time.
• Our reputation is growing and we are having referrals and come-back customers.
• We have now established ourselves in partnership with an agency with a super office and a good position, and all the backup of local knowledge and support that we needed but didn’t have in 2003.

The conferences we would like to be able to service are broadly –

GSM – we are full
MIPIM – property congress in early March – 25 000 delegates – we are full.
MIPDOC – late March.
MIPTV – TV congress end of March and early April – 11 000 delegates – bookings coming in.
MILIA – early April.
FILM FESTIVAL – mid May – 76 000 delegates – bookings coming in.
FESTIVAL PERFORMANCE d’ACTEUR – mid June.
INTERNATIONAL ADVERTISING FESTIVAL – late June – 9 000 delegates.
Longines Jumping.
Symposium de l’Eau
Festival International de la Plaisance (Boats)
MIPCOM
MAPIC
Congres Associatif
Congres Médical
Laboratoire Pharmaceutique
Congres Banque
Tax Free
Congres Gartner
MIDEM

SUMMER is 9 weeks of frantic activity in July and August when there are no conferences, and we should be largely full throughout that period.

The Future.

My crystal ball is no better than anyone else’s, but I remain an optimist.

• Property has been good for generations and will continue to be good I think.
• Europe and France are on an rising economic curve, albeit tentative still.
• The US$ is stabilising and there is recognition that the Euro has been too strong and something needs to be done about it. Exports and tourism are suffering.
• The French Riviera continues to attract and enthral its visitors. It is a wonderful and warm place.
• Cannes is at its absolute heart.
• Rentals are picking up and I am confident that this year will see a huge improvement on last for all the reasons I have already mentioned.
• We are completely committed to working here to make this the best possible investment for ourselves and everyone else who is investing here with us. Lao and Katherine live here and Vicky and I spend half of our time here.
• We are working all the time to improve the finance options available to investors.

Dates.

Vicky and I fly back to the Cape on 6th March.
We return to Cannes arriving on 13th April, and will then be here for a couple of months.

Please don’t forget to promote us wherever and whenever you get a chance. We need and appreciate your help and support very much.
Thank you.

With kindest regards to you all from all of us here,

Guy and Vicky.

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The Process.
Briefly and simplistically, for those interested in buying –
• Identify your price range, and a property or properties that might interest you.
• I will then send you a great deal more information.
• When you are ready and happy to offer, I will make the offer on your behalf.
• If it is accepted or an agreement is reached, we sign an agreement (Compromis de vente).
• You have seven days to think about it and withdraw from the agreement without penalty and for any reason. So does the seller.
• You pay into the holding account of the Notary handling the property transfer a deposit of 10% of the agreed price.
• If you require finance the bank application begins and the process takes a couple of months to complete.
• Once the loan is granted and all the Notary’s checks (deeds search, asbestos, bugs and termites etc.) have been done, a date is set for transfer, and the balance of your financial commitment will be needed on the day of transfer – not before.
• For notary’s charges and transfer duties combined work on 7%.
• On transfer, we take your keys for you if you are not here to take them yourself.
• If there is work to do to renovate or furnish your apartment we can get quotes for you and get the job done if you would like.

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Please remember that all the prices I give are asking prices and offers are often but not always acceptable.

PROPERTY REVIEW.
(In no particular order.)

***Rue Moliere.
2nd floor Studio.
Just off Rue d’Antibes in the centre of Cannes.
33 sq.m. with pleasant balcony. Underground garage. Cellar.
Asking price – 175 300€.
Price per sq.m. – 5312€
The building and the apartment itself are immaculate. It has been much loved by the couple who are selling it, and it has an incredible position. It faces west and looks over a small gardened square with Rue Moliere to the left and Rue d’Antibes below on the right. It is a busy part of town but the road below is small and the apartment is pretty quiet. The balcony is charming and used for meals by the couple who live there. Much of the furnishing including the fitted pull down bed will remain, and the kitchen is fully equipped. The garage is unusual for this part of town and has a real and independent value of close to 30 000€.
It is air conditioned.

Rue d’Antibes.
There are two apartments in the same building for sale – three actually but two that we would reccomend. All the apartments have been refurbished and come fully furnished and equipped.
The two we recommend.
In the event that we offered for two, we would expect a significant discount.
***Second floor Studio.
Entrance on Rue d’Antibes though this apartment faces south and away from it.
29 sq.m.
Asking price – 137 000€
Price per sq.m – 4724€
Fantastic position in the centre of town. Attractive large entrance hall, and the apartment is white tiled throughout, furnished, with a cream kitchen. Its view is out across gardens and down towards the Carlton Hotel on the beachfront.
There is no balcony or garage or cellar, but the apartment is very good for rental.
***Second floor one bedroom apartment.
42.5 sq.m.
Asking price – 210 400€
Price per sq.m. – 4950€
Equally good position, but this one looks out over Rue d’Antibes. Furnishing and finish is similar to the apartment above. Very attractive windows overlooking the street. Lots of character. Also no balcony etc.

***Bas Californie
Second floor one bedroom apartment on Ave Marechal Juan and in an area where we have a group of other apartments including Gardens, Fleuris, Le Bosquet and others. I wrote about this apartment last September, and we made an offer on behalf of an investor which was turned down, and the investor bought another apartment. It is back on the market.
Asking price – 181 500€
Price per sq.m. – 3821€!!!
As I said in Property Letter 31 – beautifully equipped apartment with high quality finishes throughout. Well equipped open plan kitchen, Excellent design and finish. Lovely bathroom. No views but very quiet. Great position. Very smart apartment.
There is parking for the building but not individually allocated.

***Grand Hotel.
3rd floor one bedroom apartment.47 sq.m.
Asking price – 275 000€
Price per sq.m. – 5851€
Open spacious feel in a modern block which forms part of the Grand Hotel complex. This one looks south at the back of the hotel. Newly painted with wooden floors, this used to be two studios which is now a one bedroom apartment. Enclosed balcony with fully sliding windows. Kitchen very fully equipped. Bathroom attractive with marble surfaces and cream tiles. Air conditioned.
Very good and prestigious address and excellent position on the Croisette.

And now for something completely different.
***Villa Adorable.
This is the first villa we have seen that Vicky instantly fell in love with. (And she gave it the name!)
Five bedroom villa on three floors.
On Rue St. Jin Jin, 50m from the Moure Rouge beach and port. It is 500m from the Croisette and 500m from the Place de l’Etang.
A beautifully refurbished house hidden away in a quiet street in Palm Beach, built around 1860.
Living space – 200 sq.m.
Garden – 100 sq.m.
Asking price – 810 000€
Price per sq.m. – 4050€
The whole villa has been refurbished to very high specifications and with immaculate taste.
Ground Floor –
The main entrance hall leads to the living room, with two large French doors that lead out onto a patio and garden area with a huge palm tree. There is a separate dining area, and a large kitchen in green with cream tiles on the floor, and a Provencal finish. It’s fully equipped,
The living room is tiled with an attractive fireplace. boxed beams in the ceiling, and an alcove with glass shelving.
First Floor –
The original stone steps lead up to the first floor where there are four bedrooms and two bathrooms. Two bedrooms look out across the garden. The main bedroom with bathroom en suite leads onto a large balcony with some sea view to the east. Wooden floors and beautifully painted in a soft yellow throughout. Main bathroom is in white and blue.
Second Floor –
A further staircase leads up to a loft that is the fifth bedroom with it’s own bathroom. It is extremely spacious with exposed beams, and windows fitted into the roof making it light and bright.
There is a garage on the ground floor, with an area dedicated to the laundry.
The villa is fully alarmed and linked to a security company.
The garden is enclosed and private, and looks out onto the back of a listed villa.
The house as it stands has been beautifully furnished with antique pieces, and there is a possibility of taking over some of this furniture.

Apart from being a beautiful home, this is an executive rental dream, if rentals were desired.

***Latour
5th floor studio apartment in the same building as ‘Bas Californie’ above.
18 sq.m.
Asking price – 88 000€
Price per sq.m. – 4888€
Good position with a lovely view from the 5th floor out across Cannes to the hills beyond. This tiny apartment would require a complete refurbishment but it has potential because of its position. It has a pleasant and spacious balcony which makes a difference, and we had a good long look at the work that would be required in order to make it comfortable for two people in separate beds with a bathroom and little kitchen. It works. However the improvement would cost (off the top of my head) 16 000€. We think that an offer of about 74 000€ would be reasonable. We may not get it but it would be worth a try.

***Helvetia
2nd floor 2 bedroom apartment.
81 sq.m.
Asking price – 405 000€
Price per sq.m. – 5000€
This apartment has a good parking space in the basement, worth up to 30 000€.
The position right in the centre between Rue d’Antibes and the Carlton Hotel on the Croisette is excellent. It is spacious and has been newly refurbished throughout to a high standard and is finished but completely empty of furniture.
Large spacious living room has large sliding doors onto a balcony facing West and looks out across gardens and houses with the Carlton beyond. Its floors and those of the passage and kitchen and bathrooms are marble. Two spacious bedrooms with wooden floors, have no view whatsoever as they look out across a small courtyard onto the wall of another building. That wall has no windows however so the bedrooms are not looked into, and are very quiet. The bathroom is lovely and spacious and there is a second separate loo with a basin. The kitchen is brand new and has quality appliances and finishes. The surfaces are granite and the finishes are expensive.

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