Property Letter 73

Posted by admin in Property Letters | June 12th 2008

Dear All,

I’m only featuring one property today.

It just missed my Property Letter of 28th May, but it’s so worth while proposing to you on its own because for someone it’s the investment dream come true. We’ve seen many properties in the last few weeks and I could add some other beautiful options but I’m not prepared to do so if the price is “stupid”. This apartment however is priced to sell in today’s market.

What of prices?

Many people are asking the question.

As I said in my recent Property Letter, we’re seeing a trickle down in prices because properties are taking longer to sell, and impatient sellers become willing to accept a lower offer, or drop their prices a little. Therefore sensible offers are to be encouraged – let’s see what we can do.

Although I am featuring only one property, I will (at the end of this letter) refer to some properties from my Property letter of 28th May whose prices have been dropped by the owners. It’s an interesting time for buyers right now.

However as I also said, Cannes is a special market, and a quality market, somewhat protected from the vast bulk of residential UK and Europe which is getting such a lot of bad press. There’s no doubt that the property market especially in the UK has been hit primarily by the difficulty of raising finance, but we have been invited to a few functions and cocktail parties by leading banks in Cannes recently aimed at encouraging their customers to “come in and borrow”. They are still in business, and working hard to keep the volumes of business through their offices up, and you and I don’t really fit the profile that causes them most concern – young, salaried, often first time house hunters. They need to lend. (One lending bank I spoke to this week confirms that they are down 30% on last years lending, and that they are lending now at about 5%).

From the bank’s point of view, we are a different clientele to those that hit the U.K. press, and Cannes is a very different market.

Many people write to me in reply to my Property Letters – kind responses which I greatly appreciate. One Scottish resident and property investor (ex S.A) wrote in response to my last letter and his comments are interesting:

“Indeed, what you and The Economist express seems to hold good – the finer London properties are far less wobbly, I gather. In Edinburgh, the market is quiet but there is no talk of catastrophic falls – it has always tended to rise more gently than London.

I certainly think the general outlook is rather tricky, but I am ever the optimist, and would like to think that although business may well turn fairly slow, we may see a few more smiles within 18 months.”

I can’t afford it:
We all have our limits. We know what we can afford and what we can’t, and we know what we can safely afford to borrow. Prices in Cannes can seem daunting because they are higher than in many other places, but there’s a reason for that, and there are always good buys to be had.

The market has been very strong since the railway line first reached Cannes in the 1860’s. There have been many ups and downs – cycles, such as the one we are anticipating right now, and even WWII which was a downturn in the cycle, but I have yet to meet anyone in Cannes who doesn’t wish that they had put more money into property long ago (myself included). Those who did have built wealth, no matter when they bought.

We have four investment properties in Cannes owned by groups of people – friends and / or family who have pooled resources. I remember in our previous life (in Zimbabwe) that it was common and very successful practice for friends to get together to buy a boat on Lake Kariba, or a house at Chirundu overlooking the Zambezi River, or a beach property in Mocambique, or even a commercial farm. The same principle can apply to an investment in Cannes in that partnerships or small French limited liability companies (SCI’s) work for property here in different ways. The properties can and do become the source of great pleasure for partners who wish to visit, and some do so regularly now. At the same time they can be a very safe, partly self-financing investment in a great and safe part of the world, and some of the partners we look after have never yet been to Cannes! (We hope they come one day, but in the meantime their investment is quietly and steadily growing for them and they know that, in spite of cycles real or perceived).

Finally, the banks are very happy to finance syndicates, partnerships and SCI’s, so as an alternative means of getting into a property here, if it’s too big a bite to take alone, do it with a friend, or a group. But do it if you can.

Management and Administration:
(This is a copy and paste from my Property Letter of 4th March, but it bears repeating because we do get the questions asked of us fairly regularly)

Based on frequent questions, it seems not as well know as it should be that Azur Accom (in the form of Vicky primarily) offers a comprehensive package of management and administration to those who want it. She looks after the payment of taxes, rates, levies, water and electricity, and manages banking issues such as timely deposits, and compiles monthly bank reconciliations for the owner. She also takes care of issues concerning the co-propriety and the administration of the building, insurance and claims, and arranges for repairs, maintenance and upkeep as required. She prepares the annual tax returns, and generally keeps a watchful eye on the many properties of “her” precious owners.

With kind regards and very best wishes, especially to our friends in Zimbabwe – it’s a critical and a very frightening time there right now and they need our support and our prayers this month. Take care.

Guy.

EXCEPTIONAL!
Plage du Midi.
Three bedroom apartment.

The View South East – Beaches, Boats, Sea and the Isles de Lerins

The View South West – Beaches, Sea and the Esterel Hills

•    125 m² of living space.
•    35 m² of terrace.
•    Three big bedrooms.
•    Three en-suite bathrooms.
•    Built – 1900 (Bourgeois)
•    View – panoramic sea views.
•    Aspect – north, south east and west.
•    Floor – 2nd of 3.
•    General condition – excellent.
•    Double glazed and air conditioned.
•    Garage and private parking.
•    Cellar.
•    Private steps down to the beach.
•    Asking Price – 1 700 000€

From Bedroom 1                                                    From Bedroom 2

From Bedroom 3                                           From the Kitchen

This apartment in a turn-of-the-century building which is itself very well maintained, is an absolute gem in the centre of Cannes, and extremely rare. Seldom does one see or have the opportunity to acquire an apartment with these dimensions, and unimpeded views, right on the beachfront in central Cannes!

It sits on the side of the hill close to the Old Port of Cannes, and the views from the back terrace and the kitchen window are of the old town and the Old Church and fortifications of Le Suquet. The front of the apartment however looks straight south, literally overhanging the Plage du Midi just to the West of the Old Port and the Sofitel Hotel. There is a private stepped walkway for residents down the side of the building and directly to the beach.

The building is Bourgeoise (circa 1900) and has lots of charm, a grand entrance, high ceilings, and is very well maintained. There is a locking single garage and a private parking space next to the front door.

The apartment itself has been entirely renovated, and the living / dining room is large and very light. Through the double glass doors which lead onto the most spectacular terrace the view is quite breathtaking, from the Isles de Lerins in the east, through the unbroken expanse of the Mediterranean in front, with the bathing beaches and their restaurants below, to the Esterel Hills behind which the sun sets in the west. It is a wonderful panorama, made all the more so because of the beaches and restaurants below, which are entirely unobtrusive. Most unusually the two large main bedrooms both open over the front with the views and beaches too. One bedroom suite sits each side of the living room and each one has its own bathroom and shower and toilet en-suite. The third bedroom also has an en-suite shower and toilet, and opens onto a north facing sunny terrace, and enjoys lovely views of the old town and the ancient hilltop fortifications and church which dominate Cannes. Each of the three suites is independent, and closed off from the living area. The modern kitchen is fully equipped and also looks out over the Old Town and Le Suquet.

From Property Letter of 28th May 2008 – updates:

Le Cannet / Oxford.
Two bedroom apartment.
The price was 580 000€ – now reduced again to 554 000€. This now becomes extremely attractive as an investment, and remains a fine apartment in a prestigious building – lovely to live in, wonderful as a holiday home, and a very sound rental proposition. (We would be able to find a good tenant quickly as this type of accommodation is very much in demand). It ticks many boxes.

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Four of the apartments I proposed have been sold:

Alexandre III / Basse Californie.
Large Studio Apartment. (208 800€)

Le Cannet Residential.
One bedroom Apartment. (225 000€)

Fragonard. (460 000€)

Penthouse in the Hills Overlooking Cannes. (2 300 000€)

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Others are known to be keen sellers so might entertain offers willingly – notably:

“Villa sur le Toit” (790 000€)

Basse Californie Alexandre.
Beautiful Two bedroom apartment. (1 325 000€)

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