Paris: A 32-storey apartment building in the 15th arrondissement overlooking the Seine is being launched this week on a sale and leaseback basis. Kate McMorrow reports.
A pied à terre in Paris anyone? One of Europe's largest lease-back companies, Pierre & Vacances, is launching a new apartment development in central Paris through Irish agents Hamilton Osborne King.
Named Paris Côte Seine, one of this building's best assets is its superb location, in the 15th arrondissement and overlooking the Seine and the Eiffel Tower - within walking distance of the main sights of Paris.
Pierre & Vacances is a French-based company specialising in top-rank residences for short letting, so the apartments come luxuriously furnished and equipped for immediate rental. The 32-storey building will have a fitness centre, swimming pool, lounge bar and business area and all air-conditioning and central heating are standard.
Construction will begin soon and the development is scheduled for completion in 2006.
Prices start at €210,000 for studio apartments of 23-27 sq m (up to 290 sq ft). Larger one-bedroom apartments of 40-46 sq m (up to 495 sq ft) from €365,000. The latter seem a more realistic option for long-term ownership.
The entire riverfront area has been renamed Front de Seine and designated for a €55 million upgrade by the city council. This huge project is under the direction of architects Valode & Pistre, who are also overseeing the redesign of the Pierre & Vacances building.
Currently 1970s retro and with a certain dated charm, the Front de Seine area promises to be a very desirable location when the revamp is completed. Getting in early at Paris Côte Seine while reconstruction is under way could be a sound investment in terms of equity growth.
The high-spec refurbishment planned for Paris Côte Seine applies also to the exterior, with dressed stone, glass and metal reflecting the colours and materials of the surroundings. A few paces back from the river, sharply angled windows make the most of views over the old city.
Those on the higher floors and not obstructed by surrounding blocks have the best outlook, with spectacular views from the top floors. Both the Seine and the Eiffel Tower can be seen from corner units, which will undoubtedly be the first to go of the 107 apartments for sale in this phase. A total of 400 units are planned for the building.
Leasing back to Pierre & Vacances for a nine-year period is mandatory and VAT is paid by the company. At the end of this time, the freehold is owned entirely by the buyer, who can opt to either continue the leaseback or retain the apartment for private use, paying an annual maintenance charge to the French management company.
Owners can sell the apartment at any time during the leaseback period or afterwards, with a claw-back of VAT due on a pro-rata basis. A net annual return of 4.5 per cent is guaranteed by the leasing company, provided there is no owner use. One week's holiday use reduces the return to 4 per cent.
Payment is staged, with 2 per cent required as a booking deposit. A further 28 per cent is payable on signing of deeds, 20 per cent three months after work begins and 30 per cent nine months after this. The final 20 per cent is due one month before completion in the second quarter of 2006.
Pierre & Vacances is a European leader in developing and managing tourism residences, with 50,000 apartments and houses on their books.
The company also owns Maeva, MGM and Center Parcs.
While it is possible to purchase an apartment in a good district of Paris for around the same price as those at Paris Côte Seine, tenancy rights in France are strong and regaining occupancy of a long-term rental property can be difficult.
For anyone prepared to wait until 2015 for unrestricted use of their Paris apartment or accept a reduced return in exchange for a week's holiday per year, a lease-back arrangement with a reputable company seems the safest option for overseas buyers.
To mark the launch of Paris Côte Seine, HOK is hosting an exhibition at the Trinity Suite of Dublin's Westbury Hotel tomorrow and Saturday with Roman Carel of Pierre & Vacances on hand to answer queries.
