Property Letter – 16th February 2007

Posted by admin in Property Investment | February 16th 2007

Dear All,

There are some very interesting properties at the end of the letter, so if you want to get straight to them, please scroll down.

Vicky and I touched down at Heathrow early in the morning of 18th January after our flight from Cape Town, to transfer to Nice. It was a “white knuckle” landing in an 80m.p.h. wind and lashing rain – as we were to find out later, the most severe weather Britain had experienced in 17 years! The 747 bounced alarmingly and seemed to slew all over the place in the extreme wind. The airport was subsequently shut for some hours until the wind and rain abated and we only got out of there very much later in the day. We were so happy to get home to Cannes that night, and the most stunningly beautiful winter weather which persists till today, without a break. As Lao said to us a few days after our arrival, “everyone should come to Cannes in January!” The Victorian English knew it, and this coast was developed as a popular destination specifically to escape from the rigors of European winters, and it wasn’t until the 1930’s that hotels even bothered to stay open for the summer. The Carlton was the first to give all-year trading a try and it was followed a year or two later by the Martinez and the Majestic, and then slowly the others followed.

Our day time temperatures are in the 18 to 20 range, and at night it seems to drop as low as 7, but the sun shines almost every day! Vicky and I run along the coast in the mornings at dawn in our t-shirts, sometimes with a sleeve but normally not, and the sunrise over the sea to the south of the Cap d’Antibes is always a wonder – I can only compare it with our Cape Town sunsets across the Atlantic which are equally beautiful! I know we will have some wet days in February and March, but we need them, and they won’t last long. Three consecutive days of cloud here sets tongues wagging – people start talking about the terrible weather we seem to be having these days – and perhaps its all to do with global climate change!

Investment in Property – Revisited.

Since returning we have been busy looking at many properties – possible investments. (The better options are detailed below).

I want to take this opportunity to remind ourselves what we are doing here – and to remind us also that the fundamentals have not changed in the five years we have been buying.

  • Property continues to significantly out-perform cash or bonds. In addition property can provide income to offset the costs associated with owning it, and contribute towards loan repayments where the property has been bought using o.p.m. (other people’s money).

  • The benefits of capital appreciation although only realized in cash terms on sale, are the most significant wealth builder in the medium and long term. Property is a long term investment which appreciates over time.

  • Banks will lend at attractive rates and on very attractive terms for the purchase of property, because they recognize all of the above. (I have never heard of a bank lending to someone wanting to invest in the stock market). They actively encourage property owners to use their existing investment, even if already mortgaged, as security against another investment. Banks make it possible to expand and upgrade one’s portfolio even if one is not cash-rich.

  • Many of us make good money when we buy. Indeed this is what we try to do all the time – to buy below the market. Any profit achieved immediately in this way, or in year on year capital appreciation is ours, not the bank’s profit! Buying below the market aside, where the value of property is appreciating at 16% as it has done here for the last 15 years, and if one can borrow to achieve that appreciation at 4% – it seems to me to be a “no-brainer”. (Some of us are debt-averse, in which case all of the above still applies, but we are limited by how much we have to invest ourselves – without the help of the bank. That’s a personal choice).

  • In some cases it is possible to buy so well below the market that one can sell again almost immediately and make a profit, but normally the costs associated with rapid transfer make it advisable to wait at least a couple of years before selling again. Excellent opportunities do present themselves from time to time, and I try to highlight special opportunities when I see them.

The Elections.

Apparently the coming spring elections are having a significant effect on French businesses!

People are deeply involved in political discussion, and since we arrived back three weeks ago we have heard more political talk than we’ve heard in the last five years put together. It is regarded as a “watershed” election which will usher in a new generation of leader, whichever way it goes. It’s being said that it is the most important election in a century, and I believe that to be true. France desperately needs change as so many of its laws and institutions are relics of a socialist past, and stifling to the economy – everyone I speak to recognizes that, and certainly in our circles, Mme. Segolene Royal has lost much of her early appeal. She’s young (early 50’s) but so is Sarkozy. She’s a very attractive woman but that early advantage (sex appeal) seems to be wearing thin now – her lack of experience is being considered as more important. And recent polls are putting Sarkozy a few points ahead – personally I pray it stays that way!

In simplistic terms Royal is “left leaning” and speaks for the working classes and the fear is that her policies are likely to lead to “more of the same” – just what France has had enough of. Sarkozy on the other hand seems to speak for business, for change, and for national renewal so desperately needed in France (and Germany which is undergoing change now under Angela Merkel (53), the most powerful woman in the world today who, by no small co-incidence, is often labeled “The Iron Frau”). However change is deeply feared and mistrusted in huge sections of French society where the 35 hour week and an expensive social security net have become articles of faith. The symptoms seen in France today seem to be similar to those that beset Britain before Maggie (the original Iron Lady) came to power and crushed the unions, and the big question is whether in spite of good intentions, Sarkozy will have the strength and willpower to do the same. It will be so interesting to watch, and if the turn around comes and business is allowed to flourish in a friendlier environment, then in my view the only direction we’re going is “up”.

In the meantime it seems that everyone is waiting, which seems illogical to me (because whichever way it goes, there will be an “after election”)! Dress shops, travel companies, hotels, and ESTATE AGENTS are all feeling a pull-back in business. France seems to be frozen in a state of nervous anticipation – of “wait and see”, and businesses are suffering.

I am hoping that we who are slightly less concerned with the issues underlying the election, being unemployment, levels of taxation, social services and so forth, might be able to capitalize on a market which is slumbering. There may be some good deals to be had!

Best Read……

My brother in law introduced me to Thomas Friedman as a writer about six years ago and I was so fascinated by his book “The Lexus and the Olive Tree” that I bought a couple of extra copies and gave them to people. One copy went to my (then) Minister of Finance who I thought had an impossible job to try to perform – I just dropped it off at his office with his secretary one day with a note. About three weeks later he phoned me on my mobile, which was a big surprise, and said that he’d seldom read such an insightful book, and was enjoying a second reading of a chapter every night before he went to sleep! Unfortunately his job didn’t last very long, but I hope he has a copy of the next Friedman book because I think his services to that country might be called on again one day. (I don’t know how to get a book to him these days, or I might try to).

Friedman’s follow-up book is called “The Earth is Flat” and updates and expands his original study of globalization in language and images that are easy and fascinating to read and to follow (I need easy to follow!). He was writing about countries, powers, the BIG picture, but one short passage that resonated with me, probably because of a history that our family shares with many other readers of these letters, applies to communities and to each of us as individuals too:

Analysts have always tended to measure a society by classical economic and social statistics: its deficit-to-GDP ratio, or its unemployment rate, or the rate of literacy among its adult women. Such statistics are important and revealing. But there is another statistic, much harder to measure, that I think is even more important and revealing: Does your society have more memories than dreams or more dreams than memories?

By dreams I mean the positive, life-affirming variety. The business organization consultant Michael Hammer once remarked, “One thing that tells me a company is in trouble is when they tell me how good they were in the past. Same with countries. You don’t want to forget your identity. I am glad you were great in the fourteenth century, but that was then and this is now. When memories exceed dreams, the end is near. The hallmark of a truly successful organization is the willingness to abandon what made it successful and start fresh.”

In societies that have more memories than dreams, too many people are spending too many days looking backward. They see dignity, affirmation, and self-worth not by mining the present but by chewing on the past. And even that is not usually a real past but an imagined and adorned past. Indeed, such societies focus all their imagination on making that imagined past even more beautiful than it ever was, and then they cling to it like a rosary or a string of worry beads, rather than imagining a better future and acting on that….”

Friedman is writing about the world today, with its conflicts, weapons of mass destruction, the world’s poor, the need for reform in the Arab world, and a US leadership that he believes has lost direction, but the message (for me) boils all the way down to individuals – to my society, to my family, and to me.

What on earth does that have to do with Property in France you might well ask? Perhaps nothing at all!

But for me it is relevant and gives cause for thought, and for many others I think it will be too. Investment in something new and out of ones normal experience, be it in a property in France or in Cape Town or Rio, or in bonds if that’s your taste, can be regarded as a “dream of the life-affirming variety” and one which “imagines a better future”.

….At least that’s how I see it.

 

Please have a look at the properties below – they are the best we have seen so far this trip. Please also, as I say each time I write, don’t hesitate to contact me with your questions, your particular needs, your own budget and special circumstances – because so often when we know what we are looking for we are able to refine our search and respond more accurately.

With kindest regards,

Guy.

Some Properties to Consider:

 

Please remember, in every case the prices mentioned below are “asking” prices. Some are a little negotiable, and some are quite negotiable. I prefer that you look at the apartment and if it pleases you, then we look at what we can get it for, and how we can finance it. If you like it, let’s at least give it a try.

 

We still have some lovely villas (see Property Letter 61), and some luxury apartments. Please ask for details. If you let us know what you need we’ll focus on that, and sooner or later we’ll have some proposals for you to consider.

 

Comandant Andre.

 

 

  • One bedroom apartment.

  • 40 sq.m. of living space.

  • 3rd floor of 4.

  • Small quiet balcony.

  • Looks east.

  • Asking price – 330 000 euros.

 

There are a number of things that make this apartment really good.

 

Position – it is a stones throw from La Croisette and the Rue d’Antibes, sitting between the two. It is squarely inside the “golden circle”.

 

It is in a very good building with a good entrance – clean and well kept.

 

There is a lift (not a given in this part of town) and a balcony (also not a given in town).

It is on the 3rd floor and on the quiet side of the building, overlooking rooftops and not facing other apartments.

 

Rental prospects are “as good as it gets” and property in this part of town is “hot”.

 

The apartment has been updated and modernized over the years – but thankfully the original wooden floors have been preserved in the entrance, the living room, and bedroom. The living room opens onto an attractive small balcony overlooking rooftops, very quiet and the view really is quite pleasing and without any sense of vis-à-vis, or crowding by other buildings. The bedroom is spacious with very generous cupboards, and a bathroom is en suite. The view from the bedroom is identical to that of the living room, but without the balcony. All the windows are new and double glazed, the shutters are electric, and the apartment is air-conditioned and has a satellite dish just to the side of the balcony. The lighting throughout is by modern spot down-lighters. The kitchen is equipped and quite presentable, although our comment on entering for the first time was that we would like to re-tile the floor. As it is only a couple of square meters it would be easily and economically done. The existing tiles are a big dark slate – we’d like to see them much lighter. The bathroom is clean and functional, but is still tiled in the 70’s style. We would recommend a new modern bathroom in keeping with the rest of the apartment – this would be a very modest and easy change to make.

 

I think the asking price is high, but the product is excellent. I would like to put in a lower offer on the grounds that there is some work to do in the kitchen and bathroom, and see what we can achieve.

 

Pasteur.

 

 

 

 

 

  • One bedroom apartment.

  • 47.97 sq.m. of living space.

  • 1st floor of 4.

  • Has a large cellar under the building.

  • Looks west.

  • Asking Price – 310 000 euros

 

Position – a little further out than Comandant Andre, but still basically in central Cannes. For those who know Lao’s offices, they are also in Rue Pasteur, and for those who don’t you can look up Rue Commandant Andre and Rue Pasteur on a map or use “google” for comparison.

The apartment is in a very good building – clean and well kept.

 

There is a lift but no balcony. Rental prospects are very good, and the apartment “has a record” and a reputation in that it is already rented through us. Our staff knows it and our clients know it.

 

The apartment has been entirely renovated and is extremely clean, bright and modern. It seems very spacious and the windows are double glazed, and the apartment is air conditioned. The kitchen is open plan onto the living room and fully equipped and modern. The bathroom and separate toilet are also brand new and modern, and the entire apartment including the bathroom, toilet and kitchen is in creams and beiges. The bedroom is well equipped with cupboards and very comfortable.

 

Meynadier Port.

 

 

 

  • Two bedroom apartment.

  • 58.93 sq.m. living space.

  • 1st floor.

  • Looks west and south.

  • Asking price – 395 000 euros.

 

Position – just off the Forville Market and half a block from the Old Port of Cannes. Great position for rentals as it couldn’t be more central.

 

The apartment is in an old building, but the entrance and stairwell are well maintained. There is a rather quaint balcony on the corner of the building and the view is right over the port and the yachts, down the narrow street. (See header picture)

 

This is bustling and congested old quarter, full of local character and colour.

 

 

 

The apartment is being sold fully furnished.

 

This apartment is already on our rental books and has a record and a reputation. It is a popular apartment.

 

The potential buyer must know that it is directly over a butcher shop. This doesn’t seem to worry guests at all, because being the old part of town there are butchers and bakers and fishmongers and flower sellers in every available space – that is the character of the place. I don’t think the butchery, which is a retail outlet and not an abattoir (!) impacts on the apartment. I have just spoken to the rental girls again on this subject, and they confirm that they’ve never had a negative comment.

 

 

 

 

Rue Mace.

 

 

  • Two bedroom apartment.

  • 55.03 sq.m. living space.

  • 3rd floor with a lift.

  • Looks east.

  • Asking Price – 385 000 euros.

 

Position – right in the “Golden Circle” – in the centre of Cannes.

 

The building is in excellent condition and well maintained with a lift.

Like Commandant Andre this apartment looks out eastwards and over rooftops – or on the level of the rooftops at least – on the quiet side of the building.

 

The apartment is on our books for rental already so has a record.

 

We were offered this apartment a couple of years ago when it was in need of total renovation. We didn’t find a buyer for it then, but it was subsequently sold to an English group who bought quite a few apartments and renovated them. It has now been completely renovated and is modern and bright with soft grey tiles, and the open plan kitchen is in cream. There are two bedrooms and one bathroom and toilet. All are new and bright. The apartment is being sold fully furnished. Of course it has been double glazed and air conditioned.

 

And now for something entirely different – Rue du 11 Novembre.

 

 

 

 

  • Two bedroom apartment.

  • 80 sq.m. living space.

  • 1st floor/2nd floor.

  • Roof terrace of 69 sq.m.

  • Ground floor/basement of 70 sq.m.

  • Asking price – 373 000 euros.

 

Position – this apartment and its ancillaries is just across the Voie Rapide and up Blvd Carnot, but not ON Carnot. In terms of distance to the Palais des Festivals and the Centre of Cannes it is closer than the Martinez Hotel!

 

The building only has one other tenant on the ground floor.

 

The young couple has made a wonderful job of a complete renovation of the first floor which has a great balcony running the length of it – everything is super-modern with inox finishes, dishwashers, coffee machines. It is chic! Then one mounts the stairs to the next floor where there is a small office on the landing and a door to the enormous terrace which is very attractive in an urban way. It has panoramic views of roofs and buildings but none that overpower one. With imagination (such as has been employed on the lovely roof garden across the street) it will be marvelous. (Oh! Vicky says I have exaggerated the charms of the roof terrace. Perhaps she’s right – it is urban, it is surrounded but not overhung by other buildings, and it’s not marvellous yet, but could be with some care and attention.) Down below on the ground/basement floor there is a 70 sq.m. space which is a multi car garage if one wants, or workshops, storage – many possibilities.

 

The apartment itself is great, but what would one do with the roof garden and lower level if one didn’t live there and use it? The basement has potential for a business – storage alone might be a possibility. Six or eight lockable spaces rented out on a monthly basis would be similar to space that we have had to rent before – a small room with shelves and a door. I think we paid 80 euros a month for that small space, but it was a commercial enterprise, and this space isn’t big enough to be quite that, but it would certainly help towards the mortgage.

 

It is a lovely apartment with more space than we ever see in Cannes, and intriguing because of that, but it begs a buyer that has a “plan”. However, even as a rental apartment, with the roof terrace and basement just dormant or bringing in a steady modest contribution and appreciating in value, it has merit.

 

Port Canto 1.

 

 

 

  • Studio apartment.

  • 30.45 sq.m. living space.

  • 4th floor of 6.

  • Big balcony of 12 sq.m.

  • Asking price – 240 000 euros.

 

What does this little apartment have?

 

  1. A good sea view across Port Canto and the Bay of Cannes.

  2. It is quiet and the foreground view is of attractive and well kept gardens.

  3. A very good balcony/terrace which adds greatly to the living space.

  4. The possibility to turn it into a small one bedroom apartment.

  5. Position – on the inner edge of Palm Beach, closest to the centre of Cannes.

 

But it’s too expensive!

 

We like projects like this because renovations give you a brand new apartment made to your own specifications, but can also provide a real and immediate capital boost. It is accepted here that a reasonable sea view adds 30% to the price of any property, and this apartment has a good sea view which will never be compromised.

 

The apartment needs a new bathroom and kitchen anyway, and a complete coat of paint. So if that is being considered it also begs to have a separate (if small) bedroom. Vicky and I looked and measured, and it can be done and would significantly improve the apartment. The budget for renovations should be 30 – 35 000 euros. I would recommend an offer that takes that into account.

 

Port Canto 2.

 

 

  • Studio apartment.

  • 31 sq.m. living space.

  • 1st floor of 6.

  • Big balcony.

  • Asking price – 215 000 euros.

 

This studio is in the same building, and that is pure coincidence as there is no relation in ownership between the two, and neither is it any reflection on the building that there are two for sale. The building is a very good and well maintained one, with a gardien and well kept gardens leading almost to La Croisette

 

This second studio although the same size is differently laid out and constructed so it can not be transformed into a small one bedroom unit. However it does need a new kitchen and bathroom and an overall refreshing and modernization. Its doors and windows have been replaced and it requires less work than the first, and perhaps a budget of 15 000 euros might achieve the desired result.

 

The apartment also looks out via a very generous balcony across the quiet gardens, but being on the first floor there is no sea view.

 

This apartment comes with a cellar in the basement.

 

Boulevard Lorraine.

 

 

 

 

 

 

Those of you with a good memory will remember that I offered this apartment before renovation. Now it has been renovated by the same people who were selling it in 2006, and they are now offering it for sale again, fully renovated (and marked up of course).

  • One bedroom apartment.

  • 39.5 sq.m. living space.

  • 3rd floor of 4.

  • Small balcony just off the Rue d’Antibes, and looking down obliquely at it.

  • Air conditioned, and lift.

  • Asking price – 270 000 euros.

Position – at the top end of the Rue d’Antibes, just a few meters from Lao’s rental offices. It’s not inside the “Golden Circle” but it is still very central for conferences, beaches and shopping. The slightly raised (old) bathroom has been converted into the new bedroom (with a slightly low ceiling). I am 5’10” and can stand up with ease but some of my friends might not be able to! The room is a double room but there is no surplus space, it is actually quite quaint as a bedroom, and I don’t see the height being a problem. The apartment is renovated to a high standard, with real wooden floors, and a very modern open-plan and fully equipped kitchen. There is a breakfast bar separating it from the living room, and a separate lock-up storage room. The shower and toilet are new and modern. It is brand new.

Overlooking the Beach.

This is a different type of product to all of the above because it is very holiday orientated, although very much in demand for conference rental too.

  • One bedroom apartment.

  • 54 sq.m.

  • 1st floor.

  • Large balcony of 20 sq.m. runs the width of the apartment.

  • Asking price – 477 000 euros.

Position – on Gazagnaire right on the beach looking across the Bay to Juan les Pins and Antibes.

It is not too far from the centre for conference rentals and of course is marvelous for holidays. We have others on the front here that perform very well. However this apartment needs a complete renovation and one would have to budget about 40 000 euros to bring it to top quality, and its position justifies that investment. Once again, for someone looking for this kind of apartment, I would recommend an offer that takes the need for and the cost of a renovation into account.

The apartment comes with private outside parking space.

 

Two very late entries. (We only visited them this afternoon)

Lattre de Tassigny.

 

 

  • Two bedroom apartment (can become three)

  • 80 sq.m. living space.

  • 3rd and 4th (top) floor. (There is no lift)

  • Small balconette.

  • Faces west and south – very light.

  • Asking price – 360 000 euros.

 

The apartment block which dates back to the early 20th century and has lovely spiral stairs and high doors and ceilings, is only a few minutes from the centre of Cannes and only 7 or 8 minutes by foot to the Palais des Festivals. The suburb is Petit Juas and we deem it to be up-and-coming as it is so close to the centre, and many of the old buildings are being bought up and

 

 

renovated. We’ve seen lovely apartments in this area and have been able to invest in some of them now, on behalf of family and friends. The building which has no more than 4 or 5 apartments in it is very well maintained.

The apartment was difficult to photograph because the people selling still live there and have 2 boys under four! Their toys and discarded clothes were everywhere, but I did my best. It’s been very well renovated and the 3rd floor has a modern kitchen, a dining area and a living room. We would recommend at some point putting a door on the living room to make a third (large) bedroom and create a shower and toilet for which there is good space. On the 4th floor are two bedrooms built under the beams of the roof, so that the ceilings slope, but both are big and quite high enough. The bathroom is the same in that the roof slopes down and away, making it very attractive and the teak finish that they have used gives this room great character.

The whole apartment is full of character, and so is the area. (This is the best apartment so far in terms of price per square meter.)

I must say that I think some of the 80 sq.m. counted is under the eaves on the 4th floor – very attractive but you can’t stand up in it right to the edge, therefore it is not strictly admissable! I still think it’s very good, and if you are interested I can get a survey done very quickly.

Alexandre III.

(This morning the asking price came down to 360 000 – she had an offer which fell through)

  • Two bedroom apartment.

  • 90 sq.m. living space.

  • Ground floor and basement.

  • Sunny garden/terrace and glassed in verandah.

  • Private parking space.

  • Asking price – 373 000 euros.

This building was a part of the Russian quarter in the 1890’s and is only few meters from our fabulously over-the-top Russian Orthodox Church with its bright green and red tiled «onion» roofs (minuets such as one sees in the Kremlin). These were built by the Russian aristocracy pre-1917.

The apartment has been lovingly brought to life by a lady who lives half the year in Tunisia and she has renovated it with a North African influence everywhere – in the tiles, the bathrooms and kitchen, the arched wrought iron windows, and of course in her furnishing, much of which has come from Tunis. There are many lovely touches – the basement had been filled in and she had it dug out to create a bedroom and bathroom, but with a skylight allowing in natural light. The stairs down to the basement are made of huge blocks of natural granite. Etc.

But this in not strictly a rental property. It is a property that the owners should plan to enjoy because although it will rent sometimes, and certainly for major congresses, it is a little too far out to appeal to delegates who want to do everything on foot.

 

 

 

Email: watsies@mweb.co.za
Phone Cannes: +33 493 940 940

Phone French mobile:+33 661 132 565

http://www.blogcannes.com

 

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