Given current restrictions on lending and a crisis of confidence throughout Western commercial and residential property markets, surely there cannot be a new scheme without problems raising capital, finding buyers or keeping up prices? Wrong – or so it seems.
I have just returned from visiting a new-build residential scheme in what many regard as a recession-proof (not to mention glamourous) location at the Cap d'Antibes on France's Cote d'Azur. There the 45,000 square foot Le Provencal – now derelict but once an Art Deco hotel visited by Marilyn Monroe, John Kennedy and Ella Fitzgerald – is being converted into a block of uber-luxurious apartments. The development has the obligatory must-haves of 21st century luxury living. Inside there are spa baths; remotely controlled lighting, ventilation and audio systems; the ubiquitous combination of granite, marble, glass and chrome; a wine cellar, 24-hour concierge and 'state of the art surveillance systems' as the publicity bumpf puts it.
Outside there are four acres of grounds boasting views over the Mediterranean, infinity pools, manicured grounds, valet parking and security. Residents will also have access to beach teepees, helicopters, powerboats, tennis, golf and even a ski chalet in Courchevel. Soon there will be a five star hotel across the road with a discrete tunnel to allow services to be brought across to Le Provencal's residents. So far, so good; see the scheme for yourself on www.provencal-residence.com. It's a handsome development blending a traditional landmark building with modern technology and billionaires' lifestyles. But the really amazing thing here is not the product – it's the financial basis of it.
Cyril Dennis, the UK-born but Monaco-domiciled developer, says he had no problem with financing the creation of 60 apartments priced between €2m (Dh11m) and €40m. "Finding funding has not been difficult. This isn't for people with borrowing issues and those who provide the capital do not expect this niche market to suffer a downturn" insists Dennis, a typically bullish developer who made his first fortune buying cheap plots of land in derelict east London – before it became what we now call Docklands. Off-plan sales have all but dried up in the volume building markets throughout Europe but at Le Provencal some €60m of sales have been achieved even though the scheme is still a derelict shell.
"There's no fall in demand in this sector of the international market" says Harry Lewis of Savills, the realtor selling the scheme worldwide. "There have been advanced sales and plenty of positive response to press advertisements and editorial. If this had happened two years ago we'd have thought it was typical of the bullish market. But it's happening now – this sector of the market is defying the slowdown."
A stroll around this part of France (where the volume market is stagnating as it is in the UK and mainland Europe and across the world from Australasia to north America) shows that some people still have faith in the property industry.
Prices are still rising in Antibes and the most exclusive areas of the Cote d'Azur" insists Fabien de Garidel of Riviera Estates, a local realtor. "We're selling villas at over €20m each. In Monaco we're selling homes at up to €100m."
Le Provençal, he believes, will sell well as it is unique in this traditional market. "It offers a modern vision of high quality" says de Garidel. "The penthouses in Le Provençal cost the equivalent of an exclusive villa in Cap d'Antibes, but they have many more facilities and don't need full-time staff."
Such talk of multi-million-euro sales is not restricted to the south coast of France. At Le Provencal's launch I met other Savills representatives selling homes on the island of Mallorca, Italy and even in beleagured mainland Spain. They all say the same – the volume market is floundering, possibly very badly, while the top end of the market remains surprisingly healthy.
The broad lesson from all of this is clear. There may be a chronic slowdown but there is still inherent confidence in bricks and mortar.
Volume homes may not be selling but this is because buyers cannot borrow. That does not mean they do not want to buy, nor that they will not buy in the future when borrowing is easier. Meanwhile top-end schemes still sell because those people who have ready access to money still believe in property as a product and the asset. Schemes like Le Provencal prove property is not going out of fashion, is still the product that people want to own. It's merely that it has become temporarily inaccessible to volume buyers. This slowdown will pass. Keep the faith.
Graham Norwood is Property Correspondent for The Observer