Property overseas: chill wind on Cap Ferrat
By Anna Tyzack
Cap Ferrat on the French Riviera was the epicentre of the economic boom. Villas on this small pine-covered peninsula near Nice were selling for more than €100 million in 2007; even the most ordinary-looking properties were snapped up by Russian oligarchs for eye-watering sums. But the Cap has been favoured by European royalty and aristocracy since the early 20th century, when King Leopold II of Belgium owned an estate there, so it was no wonder that any self-respecting nouveau millionaire wanted a piece of it.
Last summer, prices reached boiling point when Villa Leopolda, with majestic views over Cap Ferrat from Villefranche-sur-Mer, went on the market. Chelsea Football Club owner Roman Abramovich, who has several properties on Cap Ferrat, was rumoured to be interested, but then the richest man in Russia, Mikhail Prokhorov, reportedly agreed to buy it – for €500 million (£440 million). The sale would have crowned the belle époque villa the world's most expensive property. But the banking crisis set in, and Prokhorov was forced to pull out, losing every penny of his €39 million deposit. Leopolda's owner, Lily Safra, donated the money to charity.
Post-Leopolda, the French Riviera is an uncertain place. "At the present time we don't have any information about where prices are going to be," says Jean-Claude Caputo of Savills Riviera Estates . "But those who bought in the last two years would probably sell for 20 or 30 per cent less today."
In the golden days, trophy properties would come to the market "quietly, under the table".
"The Eastern Europeans arrived with money they'd never dreamt of having," says Stuart Baldock of buying agent Property Vision ( www.propertyvision.com ) "The prices got sillier and the sellers got greedier. Deals were taking place above the €80 million mark, while others were cheerfully over €100 million. People had more money than advisers. It was a merry-go-round where people didn't care what they paid. It was an upward spiral that had to stop."
This summer, the market is quiet but sales are still taking place. Savills is receiving interest in two €5.5 million villas with pools in Cap Ferrat village. Sotheby's International Realty sold an island near Cannes in the range of €50 million. "There is still interest and offers are being made. Exceptional properties like Leopolda, which is one of the world's most beautiful homes, will always sell for a premium. But those who bought at the top of the market aren't prepared to take a 50 per cent hit," says Alexander Kraft of Sotheby's International Realty.
Sotheby's had an offer of €150 million on a trophy property but it wasn't accepted. "The initial asking price was almost double that," says Kraft. It is one of only a dozen properties of this calibre on the French Riviera - and its owner is in no hurry to sell.
For trophy properties, it used to be a question of how much someone was willing to pay but now even the richest buyers expect deals. It is difficult to know how to price a trophy villa. Caputo believes that by the autumn agents will have a clearer idea.
In the past, prices for prime property on the French Riviera have grown steadily, flattening at times. "It has never been the mad market as in some parts of the world. This has been the only blip. But those days are utterly finished," says Baldock.
Rather than buying villas, some Russians and eastern Europeans are choosing to rent trophy properties on Cap Ferrat. CView, for example, is a lavish villa in large gardens with an infinity pool, and extensive accommodation connected by a funicular-style lift. It costs up to €300,000 to rent through Savills for July or August (including chefs, waitresses and concierge).
The "normal luxury market" (below €30 million) is more active. According to Kraft, English and American buyers who were priced out by Russians, Indians and Chinese are tentatively looking. Property Vision has more clients searching for Riviera property than this time last year. Meanwhile Riviera Estates has interest from Russians and Eastern Europeans.
It's unlikely there will be many bargains. Cap Ferrat is still a niche location, with a limited supply of houses. "The guy who spent €100 million and needs to sell might get €20 million. But he's going to sit on the house. I think we're going to see properties that won't change hands for years and years," says Baldock.
So, what exactly should you pay for a four-bedroom home with garden and sea views on Cap Ferrat? "It's difficult to know," says Baldock. "You should find out what it was worth in 1990 and 1995 and apply the general upward lift without this madness. Post-Leopolda the market is a more sensible place
Source Reference:
http://www.telegraph.co.uk/property/5362283/Property-overseas-chill-wind-on-Cap-Ferrat.html
