Studios in Cannes, Financing property in France

Posted by admin in Property Investment, Property Letters, The Companies | October 4th 2005

Property Letter – 4th October 2005
(Some interesting investment options are as usual included at the end of the letter….including a new opportunity in Montenegro that could be of interest)

Dear All,

Many people have recently asked to be included in mailings and the questions most commonly asked of us are “Who are you?” and “Why are you in France?” People seem intrigued that a family of foreigners is running an organization in France that provides a ‘total solution’ in property investment, management and rental for non-French investors. (For those who have been on the mailing list for years, and you’ve heard it all before, please skip the next bits and come in at “Capital appreciation update”. That’s really interesting.)

Some answers.

The past:

My family has been in Zimbabwe for generations. Our farm to the south of the capital Harare was home to three generations of Watson-Smiths when we were forced to leave it. It was a successful large scale farming business, producing food and generating foreign currency, and providing employment, housing and schooling for 300 families. We also owned a trucking company with 30 or so long haul vehicles serving local commercial agriculture, and operating on cross-border routes in Southern Africa.

It all ended in 2001when we were given an hour to leave our farm and home (by someone very powerful who believed he had more right to our farm and moveable assets than we did!). Shortly afterward we had to leave the country without the chance to reclaim or to sell anything left behind on the farm. It was very sudden and we lost everything. Fortunately however we were able to sell the haulage vehicles and equipment, sadly not as a going concern, but piecemeal on public auction for a fraction of their value. It was better than nothing.

This all marked the end of an era for us in one sense, but it also marked a new departure and the beginning of a brand new life, made possible through wonderful family help and support.

Although we love South Africa and it has been kind to us we decided not to invest what little we had managed to salvage there. After a number of generations in Africa the thought of settling in Britain was not attractive. Australia seems a long way away given the difficulty of keeping in touch with loved ones in different time zones. However we love the south of France, have been here often on holiday, and speak the language.

Therefore France was our choice, and property was our new direction.

Just over four years after we last saw our home on the farm, we have a family property business in Cannes. Our earliest clients were almost all friends and family from home, and then friends of friends, and so the network grew. Today our clients come from all over the world.

The present and the future:

We identify investment properties through a process of careful selection, and once we have matched them with their eventual investor/owner, we help that person through the process of obtaining finance, and all the legal steps that lead to ownership. If renovation, furnishing and decoration are required we organize and oversee it if the client wishes us to, and then we market and rent the property if required, and manage its administration.

Some clients have become regular visitors to their new properties in France enjoying holidays here when they can, and many have yet to visit. We love it when they eventually do, and we have the chance to show them around their very own little piece of France. For Vicky and I it is a highlight when owners visit, and more than anything else, it makes what we do here worth while.

If you would like to read a more detailed summary of what we do, and what we offer to potential investors, click here. The overview will explain why we believe in France, why the Cote d’Azur specifically, why property rather than other investment options, and our rental operation.

For some data and recent history of capital appreciation in the region with particular reference to our target area, which is Cannes, please click here.

Property Letters:

I stay in touch with interested people through them, and use them to highlight investment properties which we believe to be worth while. I also try to convey useful and topical information about the market, and the French Riviera in general. You can de-subscribe by clicking at the bottom of this or any of my letters, but we are happy to add the names of your friends and relatives if they are interested too. Many have been on the mailing list for years and have not been able to invest, but continue to receive the letters because they find them interesting, or hope that one day they may be able to join as investors. All of you are welcome.

The style of my letters is personal, and that dates back to when I knew everyone on the mailing list. I still feel that I do or that I would like to, and whereas I could easily get professionals to knock my letters into ‘good marketing shape’ before distribution, I prefer to keep it this way. It suits me, so please forgive me if they are a little long sometimes.

In the final analysis, although we are undoubtedly in business together we enter into an intensely personal relationship with every new investor, and that relationship grows as the years pass because we normally end up as custodians of a very, very important piece of their hopes, savings, plans and future – a piece of French real estate – a business, an investment and an ongoing pleasure.

Capital appreciation update

Further to the link (above), which is a broader study of capital appreciation in France and our region over eight years, on Friday the 23rd September the front page of our main regional paper, the “Nice Matin” headlined “Immobilier: +15% dans l’ancien a Cannes”.

The articles and tables which follow show that in “l’ancien” which refers to buildings over 5 years old between June 2004 and May 2005, the increase in values based on sales in the “Cannes Sector” was 17%. Cannes Centre rose by 15%, but the suburbs of the Seafront and Le Cannet rose by 18%, and La Californie by 19%.

Interestingly for us who are involved, the highest increases in the whole region were in Mougins and Grasse at 22% and 21%, and the reason given is that they are experiencing a significant increase in demand due to their proximity to Cannes!

This is an exciting part of Europe to be in, and whereas we all know that past performance is not necessarily a reflection of future performance, the French Riviera has been a “Star” in Europe for 120 years, and there is no doubt that you can not put a price on sunshine and fabulous weather. Furthermore, (without naming names) some of us have traveled a bit this summer and checked on the opposition! The contrast with other heavily marketed “sunshine spots” in Europe in terms of cleanliness, environment, planning, history, culture, services, food and wine, and the list goes on… huge.

We are sold on the French Riviera and Cannes in particular. This is the place to be, and very many agree, which makes Nice the busiest airport in France after Paris’ Charles de Gaulle.

17% of all purchases in our region in the year ending May 2005 were by foreign buyers.


When we started in 2002 we were borrowing at 4.1%.
Today standard mortgage rates are only 2.75%.
The “interest-only” option requires a deposit on investment of only 20% from European investors and about 50% for Southern Africans, and the rate is 3%. A very attractive characteristic is that once the monthly repayment has been calculated it does not change irrespective of what happens, making budgeting very easy. If rates change it is the duration of the loan that varies upwards or down by a few months, and not the monthly commitment.

There is increasing flexibility with regard to early repayment of loans after a short initial period, transforming them into different vehicles, revaluing, re-mortgaging, and rolling over and upgrading. Some of our investors are now enjoying the benefits of this flexibility as new and innovative products are introduced. The financial sector in France is modernizing, becoming more competitive, and increasingly customer-friendly at a rapid rate.

Borrowing at 3%, partly self financing through rentals, and reaping a 15% capital growth has proved to be an attractive and profitable investment option for many. Will it continue? Few people are predicting anything more than, perhaps, a slight flattening of the market at some time. This ever-popular region is most likely to remain so for many good reasons.

With kind regards,

Guy Watson-Smith.


(In addition to the apartments below, we have villas on Cap d’Antibes, in Cannes, and in St. Paul de Vence and Mougins. We also have a good selection of luxury and/or higher value apartments which I can not cover in these letters. Please enquire and I will send you details individually.)

I anticipate seeing some interesting apartments in the next few days and may follow this letter with a “postscript” if I feel that I need to.

Lerins (studio apartment):

– Location Palm Beach
– Living/Bedroom 1
– Bathroom 1
– Floor level 1
– Living space 26 sq.m
– Balcony 10 sq.m
– View Gardens
– Faces East
– Purchase price 160 000 euros

This apartment is in a very good building with a gardien. It is on the 1st floor overlooking a little garden which belongs to the building, and it is absolutely quiet as there is no road in front. There is a single line of apartments separating it from the beach road and the beach, and a passage directly from the apartment ground floor to the beach front. The opposite side of the building leads one out onto Ave de Lerins which is the only road running through the centre of Palm Beach from the Casino on the point, to the Stade de Hesperides (stadium) at the Northern end of Palm Beach. Fifty meters from the apartment entrance is the charming and traditional Place de l’Etang.

The apartment has been renovated, and the main room, the kitchen and the bathroom are light, bright and modern. The balcony is spacious and very peaceful and private.

The apartment is sold furnished and fully equipped.

Corsaire (big studio apartment):

– Location Place de l’Etang (Palm Beach)
– Living/Bedroom 1 (but with generous sleeping alcove)
– Bathroom 1
– Floor level 3
– Living space 38 sq.m
– Balcony 8 sq.m
– View Overlooks Place de l’Etang
– Faces North West
– Purchase price 205 000 euros

This apartment is in a good building with a gardien, and overlooks the Place de l’Etang from the third floor. It is beautifully treed, and quiet as the road passing below is not the main Ave de Lerins but the little street which wraps itself around the sides of the square, leading nowhere. Traffic is very light and entirely local. In the same corner of the Place is one of the local cafes, heart of the boules (petanque) fraternity, and brimming with local colour – but it is not a late night restaurant and is always closed up at an early hour.

The apartment is big. It is almost as big as a one bedroom apartment in square meter terms, and has a sleeping alcove with twin beds and side tables and a built in cupboard. It is quite possible to curtain off the ‘bedroom’ if one wanted to, and previous owners have done so although at the moment it is set up in open plan. When one enters the apartment there is a spacious entrance hall with large built in cupboards, leading to a bathroom and the main room. The kitchen which is brand new and lovely leads off the main room as does the balcony, through glass doors. It is sold furnished and fully equipped.

La Croisette (studio apartment with a garden/terrace):

(La Croisette! It’s right in front of the Palais)
– Location Location. Location
– Bathrooms 1
– Living/bedroom room 1
– Floor level Ground
– Living space 29.39 sq.m
– View Onto private garden/terrace
– Faces North
– Purchase price 250 000 euros

This studio apartment is right on the Croisette. Its entrance is across the street and diagonally opposite the red carpet entrance to the Palais des Festivals, and directly opposite the main public beach in Central Cannes. The main living room is spacious because it has been cleverly renovated and furnished to maximize space. It is immaculate throughout with a lovely bathroom and a brand new open plan kitchen. It leads directly up two steps and into a wonderful garden which is quiet, shaded, and private. For reasons of easy maintenance it has been paved, but the surrounding beds harbor an array of shrubs which form a green and mottled canopy. A barrier separates the garden from the little road beyond, being parallel to the Croisette and one back, so it is entirely private, and the comfortable table and chairs on the terrace provide the apartment with an outdoor living area for all the warm months.

It is a fine rental prospect and a lovely little apartment in a really top position, and is very much in demand.

This apartment is being sold fully furnished and is a very attractive proposition.

Lacour (one bedroom apartment):

– Location In the well rented blocks behind the Martinez Hotel
– Bathroom 1
– Living room 1
– Bedroom 1
– Balcony faces west – spacious
– Floor level 2nd
– Living space 34sq.m
– View treed avenue
– Garage in the basement
– Cellar yes
– Purchase price 228 800 euros

This very modern and immaculate block with a concierge is just behind the Martinez hotel, and very close to the beach front and the main shopping streets, and no more than 10 minutes walk from the Palais des Festivals (conference facilities). It overlooks a very attractive and quiet treed street and is ideally situated for rentals.

It is on the 2nd floor of a 7 floor building, and comes with an underground garage (itself worth 20 000€) and a cellar.

The one bedroom apartment has been entirely renovated in 2005, is small but it has been cleverly designed to maximize space. The brand new kitchen is open plan and the whole immaculate apartment is being sold fully furnished. The balcony is wide and the sitting room and bedroom open onto it via electric shutters and big glass doors. The apartment is air conditioned.

Jean Cresp (one bedroom apartment):

– Location Palm Beach
– Bathroom 1
– Living room 1
– Bedroom 1
– Terrace beautiful private terrace and garden
– Floor level ground
– Living space 40 sq.m
– View garden
– Faces west
– Parking abundant
– Price 243 800 euros

This is a completely and classily renovated one bedroom apartment on the ground floor of a small block in Rue Jean Cresp, the only little street in Cannes which is gated for residents on both ends. Therefore there is no through traffic, and parking is easy and abundant. Its spacious terrace with a citrus (lemon?) tree at its centre is timber decked for easy maintenance and cleanliness, and surrounded by shrubs giving quiet and privacy. Garden sun beds are laid out on the terrace.

The apartment is modern and fully equipped with bright and modern tiles and lighting in the bathroom and kitchen, with quality fixtures and fittings.

The apartment is air conditioned and double glazed.

Marechal Joffre (studio apartment):

– Location Centre of Cannes
– Bathroom 1
– Living/bedroom 1
– Floor level 3
– Living space 30.23 sq.m
– View courtyard
– Faces east
– Purchase price 180 000 euros

This is a charming studio apartment in an old building close to the oldest part of Cannes. It is only a couple of minutes by foot to the Palais des Festivals and the Croisette, and even less than that to the choicest restaurants in Cannes. It is a surprise to find such a quaint and pleasant apartment tucked away off the main roads, down a side street and overlooking a little courtyard.

The apartment itself is renovated with care and the most has been made of the old exposed wooden beams and period fireplace. Two windows look out onto the quiet courtyard. The kitchen in cream and beige tiles is open plan and equipped. The living room is in white with cream/yellow curtains, with sofa, a table and three chairs. The double bed with space on both sides and bedside table is in an alcove, with some privacy, and does not encroach on the living area. The apartment is being sold furnished.

Copacabana (studio apartment):

– Location The town side of Palm Beach
– Bathroom 1
– Living/bedroom 1
– Floor level 2 (and top)
– Living space 26.67 sq.m
– View across quiet street and playing fields eyond
– Faces east
– Purchase price 145 700 euros

This is another apartment on Rue Jean Cresp (at the end closest to the centre of Cannes) which is gated at both ends (see “Jean Cresp” apartment above). Like all the buildings on Jean Cresp this is a low block, and being on the second floor the apartment is also on the top floor. It is very quiet and its view across the avenue with trees and hedges is of the playing fields beyond, and adds to the quiet feel.

The apartment has white tiled floors, and the kitchen which has been redone with blue surfaces, is equipped. It has a window onto a spacious balcony that the living room opens onto. The living room has a concertina door which separates the living area from the sleeping area which is equipped with a sofa-bed. The bathroom is in white tiles and could do with a new shower and basin unit. The whole apartment is light, bright and clean.

The apartment is air conditioned and is sold furnished.

An interesting and most unusual feature here is that leading off the balcony is a metal staircase to the roof terrace which is available for the use and enjoyment of the owner or tenants of the apartment. This is a bonus.


Please contact me for further details.
I quote below from the letter I received from my colleague who is driving this initiative, and from a recent newspaper article:

“I have been following this opportunity for quite a while now and have spent some time with the management team in the UK over the last 2 weeks.

“Montenegro Investments Limited” will be a Channel Islands Stock Exchange listed company which will invest in various classes of property in Montenegro.

I think this is a very interesting “early stage” opportunity with massive upside potential and a very reasonable downside.”

September 2005:
“Many astute investors are familiar with the opportunities presented by investing in former communist areas of Eastern Europe. Most recently, specialist property funds focused in Bulgaria and Croatia have attracted considerable investor interest. However, for those in the know, it is their lesser-known neighbour Montenegro that is the rising star of the Balkan region. A land of superlatives, this beautiful jewel of a country boasts 180 kilometers of coastline that features ancient walled towns in stunning bays as well as the deepest and most spectacular fjords south of Norway. The mountainous inland region boasts 40 lakes and the second largest canyon in the world. A recent article in the Financial Times described Montenegro as being ‘spoiled by a surplus of natural beauty’ (FT 12 July 2005). Montenegro enjoys 240 sunny days per year and is situated on the cleanest part of the Adriatic. In short, it is a gem waiting to be discovered.”

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