Property Letter – 3rd April 2007

Posted by admin in Property Investment | April 3rd 2007

Dear All,

 

This letter comes to you from a very sunny Cape Town.

Vicky and I arrived last weekend and will be here for the month of April, enjoying time with our younger children, both of whom are university students, my sister and her family, and our respective fathers – not to mention many good friends. Of course we continue to work daily with our French partners, but embrace the opportunity to meet investors and potential investors while we are here. It is an extremely valuable time.

 

For those that have any interest in running, next Saturday (always Easter Saturday) is the magnificent Two Oceans Ultra Marathon and that is the principal reason we plan our return to Cape Town each year for exactly this time. It is billed as the “world’s most beautiful ultra marathon” and I don’t think that can possibly be an exaggeration. It is a stunning and challenging course which has grown in international acclaim for the more than 30 years that it has been run. There will be 8 000 runners competing in the 56 km ultra, and 11 000 in the more recently introduced but enormously popular half marathon.

 

Cape Town is a little like Cannes in many ways, and one of those ways is that it specialises in hosting big events very well. Only two weeks ago the equally famous Cape Argus Cycle Tour took place. It is the world’s biggest (and they say best organised) timed cycle race. 38 000 (yes, 38 thousand!) bicycles cover a course of 109 kms in a spectacular and in places gruelling circuit of the Cape Peninsula. Seeded riders set off in waves every five minutes for nearly four hours, and the first finishers are done well before the last starters have left the start!

 

Two phenomenal events that are uniquely Cape Tonian – worth considering for anyone fit, and with an adventurous spirit. Jan Ullrich who won the Tour de France in 1997 rode this year, as did Tour de France legend Greg LeMond, and increasing numbers of international competitors and ordinary cyclists and runners from every walk of life who use either of these great events as excuses (if you needed any) to enjoy a visit to the lovely Cape.

 

Think about it!

 

Our focus for investment and business however, in spite of the appeal of Cape Town, remains Cannes!

 

From my last Property Letter of February two of our favourite apartments sold to “our” investors. Both were excellent buys and we were delighted, because that is what it is all about. We identify the best investment properties that we can find, someone from within the investor group (of which you are a part if you’re on the mailing list) decides that they like what they see, and that the budget is manageable – and the cream of Cannes’ apartments from little to large enter our stock of rental properties, complimenting if not upgrading the “whole package” that we have to offer to delegates and visitors to Cannes. We have a few apartments coming up for resale now, from within the group, as owners decide to upgrade and move on to bigger and more valuable properties. These “roll overs” will appear from time to time in my Property Letters, and they will have been tried and tested, known to our staff and customers alike, and worth taking a serious look at if you are thinking of investing. A few have “circuited” now within the group, and when it happens like that, it’s because all makes sense for all involved.

 

One of the properties that “sold” is an excellent investment property.

However, there is a problem (which for someone could turn out to be an opportunity).

 

In 2002 two good friends of ours pooled their resources and bought an apartment in the Palm Beach suburb of Cannes and the two couples still own it. It appreciates quietly in value, and it rents, and everyone is happy. One of the partners wishes to do the same again, and teamed up with another partner to buy “Pasteur”. We have an agreement signed, deposits in place, and a small company being formed (an SCI) to “own” the property. Bank applications for finance have been launched and are in the early stages.

 

The original investing family is South African and the newer partners are from a country north of us, with annual inflation approaching 3 000%, and an 83 year old at the helm, seemingly determined to sink their ship. No prizes for guessing which country. Very understandably events there in the last few weeks have frightened them, and they have to entertain the very real possibility of needing a lifeboat, if it should come to that, and do not any longer feel they can tie up their funds in a medium to long term investment.

 

Would anyone out there be interested in taking over 50%?

 

The numbers:

Apartment cost is 275 000.

The loan applied for is 60% at 3.95% interest p.a.

  1. With all fees and transfer cost the total investment will be 88 000 sterling (130 000 euros).

  2. There is the option of applying for a 70% mortgage and that route would require a 69 000 sterling total investment (101 000 euros).

Individual contribution therefore of half that amount, being 44 000 sterling (option 1), or nearly 35 000 sterling (option 2).

 

If you think the proposal might be of interest, please get in touch immediately, and I will give you more detail, and put you in direct communication with the surviving investor – who is still very keen to go ahead, with a partner.

 

This is the apartment as featured in my February Property Letter:

(The apartment does not belong to one of our investor group – it belongs to an outside seller)

 

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 – For those who know Lao’s offices, they are also in Rue Pasteur in central Cannes. (Across the road)

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.

 

 

Please let me know?

 

 

With kindest regards,

 

Guy.

 

 

Some More Properties to Consider:

 

All of the apartments below are very exciting. This really is a super selection.

 

Please remember, in every case the prices mentioned 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 us at least give it a try.

 

There are some lovely villas available, and some luxury apartments too. Please ask for details.

 

From my last Property Letter

 

The four properties below remain available, which is not surprising when you consider that the average turnover time for properties in the region, once they come onto the market is a very short 8 months, and the market is definitely slow in the build-up to elections this month.

These four are each quite different, but all are good investment options:

 

Rue Mace: Very good rental position and attractive and ready to work.

 

Rue du 11 Novembre: Fascinating project. Good position and not expensive.

 

Boulevard Lorraine: Good position and good rental prospects.

 

Lattre de Tassigny: Loads of character. Good position and rental prospects.

 

 

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.

 

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.

 

 

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.

Two to Consider from Within the Group.

These are not officially on the market yet, but will be soon. Therefore the price I will quote is a guide which has yet to be accepted and agreed by the seller.

Marachal Juan:

No photos are immediately available but if you are interested I will send you some, and a web reference is also available as the apartment is listed in our portfolio of (rental properties.)

This apartment is a stalwart. For four years we have rented it, it is fully equipped and furnished to a high standard, and all the finishes are “quality” finishes. It is air conditioned, and double glazed, the floors are parquet, and the bathroom and kitchen are ultra modern. It is a delightful apartment and has always been popular with delegates and holiday makers.

  • One bedroom and one spacious living room.

  • One bathroom and an open-plan beautiful kitchen.

  • Private staircase to second floor, with security door at the foot of the staircase, and another at the entrance to the apartment.

  • An “annexe” room with low ceiling used as a child’s bedroom, or as a dressing room / storage area.

  • Total legal surface area (living space excludes annexe and cupboards etc.) is 45 sq.m.

  • Charges are very low as it is a self-contained building with one other owner on 1st floor, and a shop on the ground floor.

  • (The building is not beautiful! However, it is safe, and the quality of the apartment is the overriding factor)

  • Nothing requires to be done to it.

  • The price should be a little below 300 000 euros.

Rue Jean de Riouffe:

No photos are immediately available but if you are interested I will send you some, and a web reference is also available as the apartment is listed in our portfolio of (rental properties.)

This apartment is in a marvellous position right in the centre of Cannes with the Palais des Festivals visible at the bottom of the road (200m. away). It is fully equipped and furnished, with excellent position. I would hate to see it disappear from our rental books! It comes fully furnished, and fully equipped. There is absolutely nothing that needs to be done to it.

  • A very spacious studio with character and charm.

  • One bathroom and an open plan kitchen.

  • First floor of a very clean and well maintained building.

  • Lots of space, good cupboards and storage.

  • Total legal living space is 37 sq.m.

  • The price should be about 240 000 euros.

  • (The only thing that could give it a 10 would be a sea view, which would also drive the price up by as much as 30%)

To be quite honest, I really don’t want to lose either of these to the group, and neither do Lao and his team who handle the rentals side of the business.

An Important Possibility to Come.

Marachal Joffre:

One of our investors bought an apartment on the first floor of a building that was once the main post office in Cannes. It (like Jean de Riouffe above) looks down the street 200m. to the Palais des Festivals. The position is absolutely fantastic for rentals and sheer value. I can’t easily express to people who do not know Cannes how limited this sort of property is – there is no more space for building, no planning permission to be had, and what is there today is all there is or ever will be. His apartment is quite superb – three bedrooms with bathrooms en-suite, and a fourth (with another bathroom en-suite) which is opened to the very large living area via a wall sized retractable louver-like curtain. It is beautifully finished as a 3 / 4 bedroom rental property, only a minute from the Palais de Festivals.

Why am I telling you this? We visited an apartment on our last morning in Cannes which is the mirror image of his apartment, on the same floor, and just across the hall. There are a few differences though – this one is very slightly bigger, with bigger and more extensive balconies, but the biggest difference is that this one is completely ruined inside. It needs to be redesigned and renovated from wall to wall and floor to ceiling. That is exactly what happened to its sister across the hall two years ago, and we were able to buy it completed in 2006. In this case we need an investor who can see the value of the position and the potential (not difficult when one looks across the hall). The cost of the renovation and furnishing is going to be 1000 to 1200 per square meter, therefore up to 120 000 euros. This will be a good investment, and per square meter will result in a very valuable apartment finished at well below market value.

The Potential:

  • 3 /4 bedrooms.

  • 3 / 4 bathrooms.

  • Spacious living room.

  • Lovely open plan kitchen.

  • On the 1st floor.

  • Legal living space – 99.2 sq.m.

  • Price – 490 000 euros.

  • Position – 9 / 10.

The catch:

  • I am not sure until 15th April whether we can definitely get it onto our books as there is already an offer on it. (However, that offer remains subject to a deposit and the Italian investor group is stalling for time – it may evaporate).

  • If we get it then the owner the other side of the hall will have first option.

If this investment appeals to you (and please remember that renovations – not furnishing – can be financed in the same way as the apartment itself) please get back to me urgently, because if we were to approach the sellers with a strong offer, we might be able to “displace” the Italians in their bid. It is worth a try.

Email: watsies@mweb.co.za
Phone Cannes: +33 492 180 479

Phone French mobile:+33 661 132 565

http://www.blogcannes.com

 

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