For some people, the idea of owning a private apartment, house or villa in France or Monaco is just a dream; for some, it is a reality, while for some – it is a business venture. So, we decided to find out what is currently happening on the European market today; how Western agencies are operating, and who is buying what. To do this, we talked with Vitaly Arkhangelsky, director of one of the leading European real estate brokerage firms – ArendaLazur TM (Cofrance SARL).
– Vitaly Arkhangelsky, can you tell us in a nutshell what your company ArendaLazur TM (Cofrance SARL) is engaged in? Do you conduct your business only in France or throughout Europe?
– We conduct our business all across Europe, but France and Monaco are, of course, our priorities, since Nice is home to our head office. What sort of business we are engaged in? We deal in all types of real estate: private, commercial, simple and luxury. We are actively engaging foreigner partners, particularly those from Russia, helping them to choose their most suitable facility; inspect it, purchase it, and subsequently – maintain it and lease it out. We provide a full range of support services, including legal. We handle all issues related to taxes, utility payments and insurance. Where necessary, we can take out a mortgage in the selected country. We also provide support in obtaining a residence permit, business registration, and then in obtaining citizenship. Non-permanent residents of Europe feel insecure in a foreign country. Our task is to support them in everything, to make sure that the client is comfortable from the first to the last step, and that he/she does not worry about anything.
– Do you also offer rental services?
– Yes, one more of our specialisations is rentals and everything connected with it. Our company ArendaLazur TM (Cofrance SARL) has for about ten years now been successfully engaged in the short-term rental of apartments and villas for recreation and other purposes, as well as the leasing of commercial premises for business and apartments for long-term residence. We are in control of the entire real estate base of France and Monaco. In other European countries, we cooperate with a huge number of leading real estate agencies, and since our company is a broker, we do not have the right to impose any extra charges on apartments and houses, and so we offer them at the price set by the owner, and can even negotiate discounts.
– What were the key events of the European real estate market in 2018?
– If we take the entire market as a whole, we can say with certainty that the demand for real estate in Europe is growing, which is accompanied by a rise in prices. But each country must, of course, be viewed separately. There are countries with real estate markets that remain steady for several years, and some with markets experiencing jumps every year. To illustrate this, just this year, Germany’s interest on housing rose sharply. This sent a ripple effect of sharp price jumps across Portugal and the Netherlands by up to 6-8%, and this trend is expected to continue.
In terms of demand for real estate, Spain, Italy and Germany are currently leading. This is explained by the 20-30% fall in the housing prices in these countries that happened a few years ago. Speaking of today, the prices are rising, although slowly; on average 2-4% annually. Therefore, buying real estate here is still quite profitable.
– And how are things in France?
– In France, the opposite is true: a few years ago there was a serious jump in housing prices, then it stopped. Last year, the prices did not rise at all. The prices rose in 2018 by about 1.5-2%, which is insignificant, so the demand for apartments remains high. According to experts, the cost of real estate in France will continue to grow slowly but steadily, at 0.5–2% per year. Therefore, now is the profitable time to invest in housing, as it is a reliable investment.
– Are there any countries where the real estate situation has remained roughly the same over many years?
– Yes, such countries include Switzerland, the United Kingdom or, for example, the Principality of Monaco, where we are actively operating. These countries have for a long period maintained slow growth dynamics, which is natural for the real estate market: 0.5-1.5% annually, without any jumps. According to experts, this situation will remain the same. I think it needless to remind anyone that these countries have very high real estate prices; for example, Monaco and London have for many years been among the three world leaders based on this criterion.
By the way, the rise in the prices of French luxury real estate (luxury villas, palaces, castles) is much slower than for apartments or commercial premises. And I believe this trend will continue. Prices are rising the fastest in Paris, especially for studios and small apartments, but also for luxury property.
– Is it profitable for a foreigner to buy real estate in Europe and then rent it out? After all, taxes, and especially utilities, are quite high there.
– Of course, it is profitable, and for that very reason too. France has a residence tax. This is paid by the person living in the apartment at that particular moment, meaning if it is a rented property, then the tenant bears the costs. All utility bills are also usually footed by the tenants. Rental prices in most European countries are quite high. Therefore, the owner of the property remains in the black in any case, despite all the mandatory deductions. For foreigners who do not live permanently in the country, renting is particularly beneficial. Otherwise, you would have to pay for housing that you don’t use for most of the year.
– But in this case, it turns out that if you do not rent an apartment, then buying housing in Europe is unprofitable for foreigners?
– Depends on the circumstances. In our experience, I can say that there is practically no such thing as a foreigner who buys a house and does not rent it out or live in it. There are people who buy apartments so that they can relocate to that country for permanent residence. There are some who buy them for their summer vacations, and to rent them out the rest of the time. Some buy premises for their business. But we haven’t had such situations where a buyer gets an apartment, arrives for a week on vacation, and then go away leaving it idle. In fact, they approach us at ArendaLazur TM (Cofrance SARL) to monitor their real estate when they are away and provide them with a stable income from the rentals. If the owner uses his or her villa or apartment for only a month out of the whole year, then he / she can simply rent it out the rest of the time. We are also always ready to facilitate this.
Property in Europe is usually bought by wealthy people and, of course, not with their “last penny”. Their goal is to invest profitably and reliably. These people tend to buy houses that subsequently appreciate in value, and sometimes buy them even at the construction stage. Then in the future, when the prices of the apartments rise, they sell them successfully. And if they are not interested in that, they simply transfer their property capital to their children by inheritance. This is more reliable than money bank accounts, especially when it comes to Russia.
– Do you have many clients from Russia?
– Since we have Russian-speaking employees as part of our staff, and I myself have also lived in St. Petersburg for many years, we always pay special attention to our customers from Russia and the former Soviet states. We run a handful of Russian-language based websites, offices in Moscow, St. Petersburg, Almaty, Kiev, Minsk and several other Baltic cities, and also have direct telephone numbers in various regions of the Russian Federation. Our reliable partners permanently residing in Russia are always ready, where necessary, to assist us with support, be it legal, psychological or consultancy services.
At the same time, we are not aiming at targeting just Russian clients. All our main websites come in at least three languages: French, Russian and English, and some of our staff speak Spanish, Italian, Chinese, German and other languages. So as a rule, we do not experience any language barriers with anyone, and people from different countries approach us.
– What was 2018 like for your company?
– Stable and about the same as we expected. France experienced its peak of demand for housing properties last year, when real estate prices were “stagnant” for a while. Now they have risen slightly, but people still tend to buy apartments until the cost has shot up even more. Therefore, we can say the year has been more or less successful. We had lots of projects, and now have new regular customers and friends.
As for rentals, this year, fewer (as compared to other years) tourists from Russia visited France to rest, apparently due to the economic situation of the former. Anticipating this, we tried to focus on customers from other countries. But since the Côte d’Azur, in addition to the French themselves, is most loved by the Russians, I cannot say that the year 2018 was the best for us in this regard.
– Do you operate in European countries with the cheapest real estate, for example, in Bulgaria or Greece?
– As I’ve indicated, we carry out our operations throughout Europe, and so we also do business in Bulgaria and Greece, Spain and even Finland, where real estate is relatively inexpensive. But it so happened that ArendaLazur TM (Cofrance SARL) was initially more oriented towards the so-called VIP-clients who, firstly, are not looking for cheap offers, and, secondly, appreciate our “turnkey” approach to supporting deals. Our usual customer is someone who simply does not have the time to contact ten different organisations, hoping to find the cheapest offer, save on a lawyer, then rent the apartment on their own and so on. Our typical client is someone who carefully chooses their property, makes sure that the purchase is going to be profitable, and then simply passes the whole thing over to us: finalizing the deal, property insurance, tax return, property rental, hiring a property management company. Or the client initially sets himself / herself the goal of leaving for France for permanent residence, and purchases a business here. We also provide the client comprehensive assistance in this.
– Tell us more about that. Do I understand correctly that your company does not simply sell commercial properties?
– Of course not, and that’s our added advantage. We provide consulting services, evaluate the business from the point of view of its future profitability, help to choose and purchase a really good option, and also provide full legal support. Then we further help the client in obtaining a residence permit, make relocation arrangements for the entire family and resolve all related issues, including the school the children will attend, finding the right doctor to treat the grandmother, and even arranging for a reliable vet that will attend to the dog. The client can instruct us to solve any problem, and we will do everything so that he / she does not have to worry about anything and feel at home in France.
– So you are more focused on VIP-clients?
– Our services are in great demand among wealthy people. So, if we are talking about vacations, we do not just help them rent apartments, but also offer many related services: we put together a customised vacation package, which may include a trip on a yacht, a helicopter tour, some kind of celebration event or festival. We do not have any framework or restrictions, tour packages or template events. Everything is organised at the client’s request. If the client wants a limousine to meet him / her at the airport, or an orchestra to perform round the clock at the villa, we can easily arrange it.
However, this is only one area of our activities. Our database offers a huge number of properties for the “middle class”: affordable housing, apartments and townhouses, both for rent and for sale. So if a person calls us and says: “I’d like to rent a studio apartment for a week at the lowest price and nothing more,” we will present him / her with the cheapest offers from all over France or from the specified region; we will help conclude the lease agreement, where necessary, and (just as the client would have asked) nothing more! Then the client finally arrives and gets to rest, work, or do whatever he / she would have planned. If you wish, you can always contact us for professional advice. If it’s not full-fledged legal advice, we will be happy to assist you for free. Thus, the “elitism” reputation that has become associated with our company is not entirely true. We work with everyone, and we help everyone find exactly what they are looking for.
– Is there any special service that your company offers that is not usually provided by real estate agencies?
– I would say this: we are ready to provide the client with any service not usually provided by real estate agencies, guided by the laws of the land and general ethics, of course. For ArendaLazur TM (Cofrance SARL), the phrase “personalised approach” is not just empty words that for some reason is now fashionable to insert into any type of advertisement. We actually give our customers complete freedom of choice and solve all the problems that they face. Lunch at the restaurant, horse riding and concert tickets; why not combine all this with a tour of the property?
If we talk about services that can be described as “closer to the subject matter”, we can, for instance, at a moment’s notice provide the client with a full-view inspection of the properties they are interested in buying from a helicopter. Take, for example, a customer who wants to inspect ten properties that are at a great distance from each other, and he / she has only two days. We simply hire a private helicopter, and the problem is solved. Or, on the contrary, he / she chooses several apartments in the same city, but wants to fully assess all the infrastructure. From a height, the client gets to see the building’s actual positioning clearly, the nearby premises or objects, as well as its proximity or distance from the sea. Our consultant, who will fly with him / her, will explain and show everything.
At first glance, this service seems to be kind of “far-fetched”. But all our customers, without exception, who have embarked on such an inspection by helicopter were afterwards very grateful! They explained that it is difficult to fully grasp the ins and outs of a strange city amidst the labyrinth of streets and buildings, especially adjacent properties. From a helicopter, you are able to see everything in a single glance, and this is especially true for large cities. You can take photos that you can then later analyse calmly. And if you happen to forget something, the ArendaLazur TM (Cofrance SARL) personal manager will help you figure out where and what it is. I believe you wanted to hear something similar to this when you asked about non-standard services.
– Right! Tell me, do you have any plans for the coming year?
– We have no tradition of making plans for the year ahead. If there is an interesting or useful idea, we begin implementing it immediately. Experience has shown that shelved projects tend to be either not implemented at all or unsuccessful. It’s just that there are things we’re working on at the moment.
In this age of modern technology, it is very important that the company has convenient sites that help people quickly get all the necessary information. Imagine how many real estate properties are in France alone. Hundreds of thousands! And the situation with them is constantly changing: one is sold today, another appears tomorrow. Sometimes, there are fake offers with advertising goals, and so you need to make sure that the property that you are buying really exists. We only work with reliable partners and constantly update our client base. We try to provide maximum information in a single ad, and ask for additional photos, videos and detailed descriptions of the property, not just “this is a beautiful apartment.”
The good thing about Europe is that nothing is done “in the dark”; anyone who decides to sell a property will do so legally, involving a lawyer and a notary. Nevertheless, false advertisements still exist. It’s not easy to deal with all this confusion, and our specialists work with it daily. We strive to ensure that our sites always have relevant ads only, so that people do not waste their time. And this task requires daily work. It is also important to provide information about the peculiarities of buying an apartment in a particular country, what taxes to pay, and how much it will cost to maintain it. All this can be found on our portals, which is very convenient for “remote” customers.
– So you think that websites play a decisive role for the buyer?
– Not decisive, but significant. For any buyer, the website is only the point of first acquaintance with the apartment, the first impression. Then he / she contacts us and asks a thousand questions. Of course, we cannot possibly provide all the answers at once. But this is not a situation where it is appropriate to say “come for viewing”, because the foreign customer will decide to travel only after ascertaining that the apartment is what he / she is looking for. Our task is to ensure that the customer is not disappointed. We always pick up a few extra options and try to “keep in mind” additional alternative proposals. We “shake” agencies and owners so that they provide us with answers to all the questions and the maximum information about the property before we arrange a visit, and not operate on the “just so it’s sold” principle.
There is quite a huge selection of real estate, and it is very important to have access to all the properties, apply the necessary filters, and instantly discard everything unnecessary. Programmers and other employees of ArendaLazur TM (Cofrance SARL) strive to bring the system’s search engines to perfection. In this digital era, this is quite possible, but not always easy. This is what we already have and what we still have to work on. Customers go primarily to where they are comfortable: where they themselves and also our experts can quickly find a suitable option. Having such portals is a great advantage, because prices and offers are the same everywhere, and a good fast website is a rarity.
– What is the biggest deal that your company has ever concluded ever since it was founded?
– One involving a high-rise apartment in Monaco, in a new building, which at that time cost about EUR 90 million. It is now worth more than EUR 115 million.
– Have you had any case or curious incident this year that you especially remember?
– One lady from Uzbekistan bombarded us with questions about apartments in Monaco for an entire week. And then it turned out that it she actually needed an apartment in Macau, China. Then we also had this interesting client who chose apartments based on virtually one criterion: they should suit his two “super-purebred” cats. At the same time, he had three children… he finally decided not to work with us, and we breathed a sigh of relief. But such cases are rare; the people who approach us are mostly quite interesting individuals, and we almost always end up becoming friends.
This interview was conducted by independent journalist Nikolai Danilov