Posted by admin in Property Investment | October 22nd 2008

Dear All,

(French – “trick the eye”) is an art technique involving extremely realistic imagery in order to create the optical illusion that the depicted objects appear in three-dimensions, instead of actually being a two-dimensional painting.” (Wikipedia)

It is a very popular art form in this part of France, and this side of an otherwise uninteresting three storey building in Cannes is a fine example. For the doubters – there is no balcony; there are no windows or doors, shutters or plants. Not even the “Barbella” restaurant below exists. It was a blank wall before the artist started his work.

For the many of you who know Lao & Katherine – their little girl Mia was born on the 19th October in Nice, a sister for Noah (who’s still not sure it’s a good idea to share his Mum and Dad) and a joy to us all.

Into dark places…

Stocks plummeted around the world, banks failed, Iceland (the country) almost failed, and rescue packages worth hundreds of billions of $, €, or £ were hastily agreed. Interest rates have since been slashed, banks semi-nationalised, deposits guaranteed and far reaching measures taken to boost the “real” economy. As a result stocks have rallied, if hesitantly (and so has Gordon Brown!).

It is 14 months since the first headlines about a “sub-prime crisis” in the United States entered our consciousness.
That much is history.

Today we each have to look “through” the fallout of those months to what lies beyond.

When the FTSE 100 climbed back out of the late 3000’s (that dark and nasty place it frequented for a couple of weeks) into the low 4000’s it was psychologically important to me and I hope we don’t go back there. My next major landmark is the 5000’s and I’ll be looking out for it, and then on and upward to the 6000’s from whence it came so very recently.

How long will it take – another 14 months? Maybe more?

And brighter places…

Investors who already have property in Cannes are happy that they have! We have had feedback from a number of people who are pleased that their investments are in income generating properties in a safe environment rather than stocks, and I share that view.

In the October issue of the Easyjet in-flight magazine the focus is on luxury developments: In the Algarve, 50% of the five star villas and townhouses in “The Keys” in Quinto do Largo were sold on launch despite prices starting at €1m. Malta’s capital appreciation has been motoring along at 15% (as has ours in Cannes), and it is ranked 6th in the world by the U.N. for inward investment. Upmarket waterside developments around Valletta are the driver and it is “rich in history, with a temperate climate and secure property market” says Easyjet.

That description applies with interest to Cannes and the rest of the French Riviera.

“The flight to quality in terms of both location and product we have seen over the years will remain a constant,” says Liam Bailey the head of residential research at Knight Frank.

And The Economist (18th – 24th October) allows a hint of optimism with “….If the bailouts are well handled, taxpayers could end up profiting from their reluctant investment in banks. If the regulators learn from the crisis, they could manage finance better in the future.…”


The property market on the French Riviera.

The short answer is that there is less for sale than there was, and prices are staying almost exactly where they have been for the last six months or more.

This is a pocket, a niche that is not greatly affected by the swings in the wider market – it is a prestige property market, not a “first homes” market. The higher end is operating close to normally, and the lower end has slowed quite significantly. But no one is panicking; sellers are waiting out the crisis around them, and French sellers at least can afford to. Why?

Household debt as a percentage of disposable income by the end of 2007 was:
•    In the United Kingdom – 180%
•    In the U.S.A. – 140%
•    In Germany – 100%
(Source: The Economist magazine – 11th to 17th October 2008)

France is not included in the Economist table, but I’ll wager it is 50% or less.

The reason is that the French have not over indulged in credit. It is not in the culture to do so.
•    Credit cards are not common, most cards being debit cards.
•    There is no culture of “buy to let” as banks lend on applicants’ ability to repay their mortgages from present income, and refuse to take account of “future rental income”.
•    It is difficult for French people to get high mortgages approved, most being in the 50% range.
•    The French are less inclined to expect (or to want) long mortgages lasting 15 or even 25 years, especially when they are into middle age.
•    Levels of default are extremely low.

And French banks?

“France has pledged €320 billion in state guaranteed lending to banks, and €40 billion to recapitalise banks in trouble….They have bailed out just one, Dexia, a small Franco-Belgian lender. In truth the bailout fund is intended as a precautionary measure. Thanks to their wide retail networks, and relatively tight regulation, most French banks have been able to absorb the huge losses they have made on subprime loans in America. Nor have the French been on a huge credit binge. The household savings rate remains high.”
(Source: The Economist 18th – 24th October)

There are some opportunities to be had.

In spite of, or perhaps because of all of the above there are some good deals around. There most certainly are! (See the properties below). There are some UK and Irish and other sellers who really need a sale and are happy to consider an offer, and even French sellers are not impervious to a good offer.
So let us give it a try. (See below under “When’s the Right Time?)

Some official figures which are interesting:

The Secteur Cannoise of the greater Alpes Maritimes – includes from south west to north east – Theoule-sur-Mer, Mandelieu, La Napoule, Cannes, Le Cannet and Mougins.

Volume of sales (excluding new)
First 6 months of 2007 vs first 6 months 2008
Down 15%
Price per m²
First 6 months of 2007 vs first 6 months 2008
Up 5% – From 4 211€ to 4 407€ per m²
(Secteur Sophia Antipolis / Antibes
Up 4% – From 3 910€ to 4 062€ per m²)
Breakdown (secteur Cannois):
•    Studios              (-2%)
•    One bedrooms          +5%
•    Two bedrooms          +8%
•    Three bedrooms           +2%
Sales by price
First 6 months of 2007 vs first 6 months 2008
•    >5 000€ per m²            23% vs 27%
•    3 000 – 5 000€ per m²      53% vs 52%
•    <3 000€ per m²           24% vs 21%
100%   100%


I get a regular quarterly “Financial Informer” from Grant Buser.
This quarter he highlights retirement ideas and quotes “International Living Magazine” extensively, and particularly their annual surveys: The “2008 Quality of Life Survey” and the “2008 Retirement Index”.

These surveys have been conducted for 30 years and as they say “It’s no easy thing to quantify something like quality of life. How do you attach a figure or a ranking to the experience of spending time in a place?”

Well, they have devised a weighting system and…“which country wins this year’s Index? France and it takes this honour for the third year in a row. According to IL’s 2008 Quality of Life Index, France is the best place in the world to live.”

The International Living Quality of Life Index:

How do they score it?
•    Cost of Living – weight 15%
•    Culture and Leisure – weight 10%
•    Economy – weight 15%
•    Environment – weight 10%
•    Freedom – weight 10%
•    Health – weight 10%
•    Infrastructure – weight 10%
•    Safety and Risk – weight 10%
•    Climate – weight 10%

And the winners are:

•    FRANCE with 85 out of a possible 100 points. It scored 100% in the categories Freedom, Health, and Safety and Risk.
•    Switzerland – 84 points
•    U.S.A. – 83 points
•    Luxembourg – 82 points
•    Germany – 80 points

The U.K. came 37th with 68 points. Its only 100% was in Freedom.
South Africa came a respectable 49th with 65 points. Its top score was 98% for Climate.
Zimbabwe does not come last! It comes 175th, above such countries as Chad, Sudan, Somalia, Yemen, Sierra Leone, the D.R.C. and Afghanistan. It’s score in the Economy category was 0%, and just 8% for Freedom. However it scored an impressive 77% in the Environment category.
At the very bottom in 192nd place is poor Iraq.

The International Living 2008 Retirement Index:

I.L. acknowledge that the index is compiled primarily for people from the US and Canada, and that “Mexico is closer to home.” Therefore the rankings might be slightly different for people from Europe and Africa where Mexico might not be closest to home! The results are interesting anyway.

How do they score it?
•    Real Estate – affordability and ease of purchase – weight 15%
•    Entertainment, Recreation and Culture – weight 10%
•    Cost of Living – weight 20%
•    Safety and Stability – weight 5%
•    Healthcare – weight 20%
•    Climate – weight 5%
•    Special Benefits – government provisions, property rights, taxes, and many others – weight 20%
•    Infrastructure – weight 5%

And the winners are:
•    1 – 5: Mexico, Ecuador, Panama, Uruguay and Brazil – bear in mind the market is mainly American.
•    6 + 7: Next come Italy and France. (Once again France scores 100% in the categories Healthcare, and Safety and Stability.)
•    8 – 10: Following them are Argentina and Costa Rica before Australia.
•    South Africa comes 16th, just ahead of New Zealand.
•    The UK comes in 29th.


Vicky and I take little credit for having started in property investment in Cannes nearly seven years ago. It was circumstance, and chance, and the need to start a new life after being unceremoniously dispossessed of our generations-old life as successful farmers in Zimbabwe. We neither wished it nor saw it coming. (How blind we were – there’s nothing like 20:20 hindsight!)

Now we know that of all the things we could be doing and places we could have found ourselves, we are very pleased to be here.

•    The property market here is dynamic and interesting.
•    The Riviera is unique and has a history that is very long and reassuring from an investment perspective.
•    Successful people from all walks of life and all countries in the world want to be here and have invested, and continue to invest here.
•    Quality of life (and quality of everything) here is so high that we have yet to entertain any visitor to the region who does not go away completely impressed, and wishing to return.
•    This is no surprise at all.

For investors from all over, large and small, we have been able to provide a solution that allows old friends and colleagues and new ones entry to a very special part of the world, and a safe and rewarding investment destination. Bricks and mortar in Cannes or nearby are about the safest bricks and mortar anyone can have, anywhere.

Southern Africa.

Ele-photos – thanks to Garth Thompson. (Taken during a canoe safari on the Zambezi in September 2008 – as Garth says “some things never change”)

In 2001/2 when the jewel that was Zimbabwe began to be abused, and its currency began to free-fall, many people who could do so were happy to put some savings into a safe and friendly part of Europe, in an environment that promised some return on their investment, and they chose Cannes because they could, and they knew we were here to help. The fact that they did was at the same time an honour and a huge responsibility for us. Those early investors joined us on a learning curve from which we have all emerged stronger and happier, and later investors are benefiting from all that we have learned together.

In 2008 we have been looking recession in the face again, as we were in 2001 coincidentally, and South Africans are expressing a similar and growing interest in investment in Cannes and the Riviera. I am not qualified to make big judgements, but I do notice that wherever we go on our regular trips back to South Africa we are questioned intensely by people who have a keen interest in investing in bricks and mortar in a sensible, stable and rewarding place – and Cannes is all of those things.

Africa is a wonderful place to be – a wonderful place to live, and once we have it in our blood the bond is for ever. However the French Riviera is a wonderful place too, and a pretty good place to have one “foot outside” if one feels the need for a little stability. Many do.

When’s the right time?

If we’re going into recession?
If we’re coming out of recession or just avoiding it?
If the Rand is falling?

This is the most delicate question of all – psychology plays such a big role. A small overreaction of buyer or seller can change the deal, but in the final analysis everything depends on the status of the property – the quality and the position.

We all have to make up our own minds when the time is right.


For those of you who were interested or took note of the section on “Leaseback” in my last “Property Letter”, we have sent a great deal more information on the Golf Development just south of Paris to 12 people so far. All but one are from South Africa / Zimbabwe! I hope that we will see a good core of Southern Africans in this brilliant scheme, but of course it isn’t exclusive – I hope more English and Irish and other enquiries might yet come.

PLEASE get in touch if you are interested at all or if you missed the last “Property Letter” and don’t know what I’m talking about.


Interest Rates.

I have spoken to the bank we have used the most.  Today on a 25 year fixed rate mortgage the rate is about 5.65%.  On a loan which is fixed but renewable every three years it is about 5.30%
Rates are expected to drop soon following the cut at the European Central Bank.

They also said their exposure to defaults is almost zero, and they are lending normally although where they might have offered 80% last year, this year they are offering 70%.

It all sounded remarkably normal given the worldwide crisis, and especially given the gleeful negative reporting the press subjects us to daily.

As always, please let me know if you would rather not receive these Property Letters and I’ll remove your address from the list.

Please have a look at our website – comments would be welcomed:
www 20 mg

With kind regards,


Properties in ascending price order.

•    The prices quoted are asking prices only.
•    The selection offered in the Property Letter represents a few properties chosen from many, so if what you are looking for is not here, we can tailor-make our search for you.

Les Hesperides.
One bedroom apartment.
•    33m² of living space.
•    2nd floor of two.
•    Construction – 1965.
•    Exposition – east & west.
•    View – quiet avenue and gardens.
•    Good west facing balcony.
•    Asking price 150 000€

This apartment needs a complete renovation – floor to ceiling. However, there just are no properties at this price in Palm Beach anymore. Allow 40 000€ for the renovation, and remember to negotiate the purchase price a little, and we have an extremely attractive investment opportunity.

The apartment is a studio. It does have modern air conditioning and new electric shutters (but that’s all). There are various ways one can look at configuring it, but whichever way is deemed the best, one will create a small bedroom, a modern bathroom or shower, modern kitchen, and the finished product will be very acceptable, and eminently rentable on long term or for conferences.

As a foot in the door in property in Cannes, I have to recommend it.

Rue Jean Cresp runs for two blocks parallel to La Croisette, in the heart of Palm Beach. Except for the very ends of the street it is restricted to two storey buildings, and it is the only street in Cannes that is gated at both ends. Residents have a ‘remote’ for the gates. The result is that it is safe, very quiet, and parking is never a problem. There are three accesses to La Croisette through gates to which residents again have access.

Bas Stanislas.
One bedroom apartment.
•    51m² of living space.
•    2nd floor of 6.
•    Exposition – south and west.
•    View of city and hillsides.
•    Balcony off living room and another off the bedroom.
•    Gated parking for residents.
•    Asking price – 240 000€

This apartment is colourful and loved, but once the seller’s personal belongings have gone it is going to need painting, and I think that once the carpets are lifted the underlying tiles will need to be replaced as part of a general modernisation.

The building was constructed in 1959 and is sound and clean with a guardian and communal parking for residents. The views are of other similar apartment buildings, hillsides and some sea across the bay towards the Esterel Hills in the west.

It is just across the “Voie Rapide” and into the suburb known as Stanislas, comprised mostly of older buildings and undergoing renovation and facelift constantly. It is up and coming. We have a number of apartments in this area now and they rent well for conferences as it’s a very easy walk to the Forville Market area, the Old Port and the Conference Centre, but it is a very popular residential area so longer term rentals are also a good option.

This apartment is very well priced in the market today and as an investment property it has many plusses.

One bedroom apartment.
•    34m² of living space.
•    4th floor of 7.
•    Exposition – south.
•    View across gardens to apartment buildings beyond.
•    Large south facing balcony.
•    Asking price – 275 000€.

This apartment is immaculate, in a good building with a guardian, but the big thing is its position. It sits just a block back from the Croisette, and has the two main hotels of Cannes – the Carlton and the Martinez – 200m to the west and 100m to the east of it. So it is in the heart of delegate country – close to the Palais des Festivals, beaches, bars, restaurants and clubs. However it is 100% quiet because it looks out over a gardened courtyard as big as the block, from the 4th floor. No traffic pedestrian or otherwise.

It is being sold with its furniture, so ready to go to work.
It is double glazed and air-conditioned and the building has a guardian.

Rue d’Antibes.
One bedroom apartment.
•    55m² of living space.
•    1st floor of 6.
•    Construction – 1985.
•    Exposition – north.
•    View – city.
•    Asking price – 385 000€.

This big one bedroom apartment in a very well maintained and prestigious block on the Rue d’Antibes is a stones throw from Lao’s offices, the Croisette, the beaches and major hotels, and seven minutes on foot to the conference centre. It is beautifully appointed and is selling with all its furniture. It is already a favourite with delegates and guests. It’s a great working investment property, but also lends itself to the owner visiting and enjoying it because it is so comfortable.

There is a closed in loggia or veranda which serves as a perfect dining room off the very large living room, and it has all the extras – double glazing everywhere including the loggia, electric shutters and blinds and air conditioning.

The apartment comes with a valuable lockable garage in the basement.

La Croisette.
One bedroom apartment.
•    35m² of living space.
•    1st floor of 8.
•    Construction 1980.
•    View – panoramic of the Croisette, gardens, Port Canto and the sea!
•    Lovely west facing balcony overlooking the Croisette.
•    There is a cellar in the basement and the possibility of a garage.
•    Asking price – 395 000€

Position. Position. Position.

The apartment has a bedroom, and the bathroom is fine. The kitchen is dated (80’s). Having said that, it is presentable – money does not need to be spent on it right away. However it is in a commanding position in one of the most prestigious Croisette properties in Cannes. The building is top quality, one that people stop to photograph on their way past! The view from the balcony is of the masts of the yachts in the harbour right in front, the famous rose gardens just to the right of the port, and the sea through the palm trees beyond.

Of course it is double glazed and has electric shutters and blinds, and as a rental apartment it is in just the most superb situation for holiday and conference guests (especially if it’s done up).

Vieux Port.
3 bedroom apartment.
•    92m² of living space.
•    2nd floor of 4.
•    View – city.
•    Three bedrooms.
•    One bathroom and one shower.
•    Small balcony.
•    Asking price – 420 000€

This is REALLY not a bad price, and the position is excellent.
The apartment is completely renovated with three decent sized double rooms off a corridor. There is a bathroom with a toilet and a shower room with a toilet. Everything has been renovated. The living room is huge with ample seating, a dining area, and a large and modern open plan kitchen.

The apartment comes fully furnished, and is double glazed throughout, air conditioned, satellite TV. It is just a couple of hundred meters from the Old Port and the Palais des Festivals, and the beaches of the Plages du Midi so it is perfectly situated for both conference and summer rentals.

There is no view from the apartment at all, and effective screens have been used to block the vis-à-vis with other apartments and at the same time allow light in. I have not seen this done before and for an apartment without any view, it works very well.

Victor Hugo – Top Floor.
Two bedroom apartment.
•    75m² of living space.
•    6th floor of 6.
•    View – panoramic of rooftops and the hillsides overlooking Cannes.
•    Exposition south, west and north.
•    Large balcony.
•    Asking price – 520 000€.

This lovely top floor apartment in a good building is situated one block behind the Martinez Hotel, and a couple of hundred meters from Lao’s rental offices. It has a wonderful commanding view of the area (but no sea view, which is blocked by the Martinez).

It has been renovated to a very high standard, the bedrooms are large and light and both open onto the ample balcony. The apartment is air conditioned and has satellite TV, ADSL, electric shutters, etc.

The position lends itself to rentals for conferences and holidays as it is a 3 minute walk to the Croisette and the beaches, but it would suit a long term rental just as well. It is being sold furnished.

Ave de Grasse.
Three bedroom apartment.
•    96m² of living space.
•    2nd floor, but on entrance level from the back as the ground slopes away strongly.
•    View – panoramic over suburbs and the Bay of Cannes.
•    Exposition south, east and north.
•    110m² of terrace and balcony.
•    Closed lockable garage.
•    Cellar.
•    Asking price – 585 000€.

This apartment is not in the centre of Cannes and therefore does not suit conference rentals at all. It is just off the Ave de Grasse and overlooks the suburb of Stanislas, with a wonderful view over this old part of town, and the bay from Cannes all the way to the Esterel Hills in the west. The sunsets over the red Esterel hills are spectacular. It is a perfect residential rental proposition and for that matter in ideal second home or “pied a terre”. The photos I have are overexposed and do not show the sea or the hills (apologies).

It is very quiet being a little way from the main Avenue, and one enters from the back of the building on the third level. The apartment is on this level and the ground falls away in front rapidly into the valley below. Therefore the front balcony views from the second floor (or third level – does that make sense?)

The building is very well maintained with an impressive entrance hall from both the upper and lower levels, and a reception desk, and a guardian of course.

The apartment is extremely spacious, especially the 55m² living room with its very modern open plan kitchen, and the huge wrap-around balcony which allows access through big glass doors from all rooms including the bedrooms. Some of the terrace area is not paved and offers the opportunity to garden, or to keep covered in loose gravel as it is now.

The three bedrooms share a single bathroom and toilet, but the plumbing is in place to create another bathroom and toilet, which I would immediately do, for minimal cost and without having to do anything to the floors etc. (The room is currently used as a pantry and for storage).

This is a very comfortable home for a purchaser / investor, or for a tenant, and shops are just a minute away. The apartment is extremely well priced, and might be subject to offers.

Marachal Joffre.
Three / four bedroom apartment.
•    91m² of living space.
•    1st floor of 3.
•    View of the street leading to the Palais des Festivals.
•    Exposition west and east.
•    Enclosed terrace off the two main bedrooms.
•    Asking price – 837 000€.

This apartment is made for conference rentals.
It is about as close as you can get to the Palais des Festivals – in fact if one looks out from the little balconettes of the living room front windows, left down the street, the Palais is there at the bottom of the road.
The apartment is on the first floor of what was once the main post office of Cannes. It has two floors above it and although the building (the common parts) are in need of some repair and attention, the top floor is under major and expensive renovation and the developer has permission to put on another floor. This is good news for the building because it can be expected that it will be upgraded at his cost.

The apartment itself has been renovated throughout and there are effectively three double bedrooms, each with en-suite bath or shower and toilet. The living area and open-plan kitchen are very spacious and well appointed for delegates – however there is another feature in that part of the living room can be screened off (the screen is in place and operated simply on a hand-pulled cord). This partition or fourth double bedroom also has a shower and toilet en-suite.
The two main bedrooms open onto an enclosed terrace which also has some storage space.
The apartment is being sold fully furnished and ready to work.

Leave a Comment