Chamonix Immobilier

Chamonix has about four million tourists a year and a thriving sports scene in summer as well as winter. It is located in the Mont Blanc Massif, Europe's highest skiing area west of the Russian Caucasus range.

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Russia’s historic love of France is not only heard in its language, seen through its art and fashion, but also evident through its holidaymaking patterns. Cultural reasons aside, for a country as vast as Russia, which arguably has many of the same geo-physical trappings, it seems paradoxical that so many of its people choose to pursue their winter sports in France.

Yet “every man has two countries,” Thomas Jefferson once said, “his own, and France”. Even two hundred years on, this universal statement seems true, especially when it concerns the French mountains, with their magnetic scenery and skiing facilities. In terms of buying property, it also seems logical that Russia’s winter-sport enthusiasts look to France — the world’s most popular tourist destination — in a long-term bid to capitalize on the skiing and other mountain-related opportunities in the Alps, while also gaining access to neighboring European skiing hubs.

Savoie’s Fare

Savoie is one of the most skiing-rich regions in the whole of France, and in a number, although not all, of the area’s popular resorts Russian real estate activity has a momentum and apparent fervor, even of late.

The economic crisis has scared some of Russia’s wealthiest into toning down their sometimes infamous and indulgent skiing jaunts in the country, as Savoie-based real estate agents Immobilière Courchevel recounted, saying Russian sales had fallen by 30 percent. However, Jocelyne Dos Santos from Chamonix Immobilier, another local real estate firm, said that Russian interest and sales in their town were “thriving”.

	Pierre et Vacances Avoriaz is a Savoie resort with projects pitched at the Russian market. Pierre et Vacances' latest development is being promoted by Moscow's IntermarkSavills.

An additional dimension to Chamonix’s success appears to be that winter sports are far from being the main incentive for visiting. “Tourist numbers are higher in the summer,” she revealed, citing the attractive proximity of Mont Blanc, the tallest peak west of Russia’s Caucasus, and Europe’s third most visited natural attraction, according to the official Chamonix-Mont-Blanc web site. “In summer, people come to pursue all sorts of summer interests from rafting and cycling to hiking and natural tourism. It’s a hive of activity,” explained Dos Santos.

The Mont Blanc massif does afford impressive skiing conditions too, with a long season at some of the highest areas for skiing in Europe. It is this that seems to be of particular interest to some Russians, who do not shy away from buying the most expensive and luxurious apartments in the area. Chamonix Immobilier’s sale range extends from 200,000 euros to 800,000 ($300,000 to $1.2 million) and Russians, Dos Santos said, go for the top end. “Of course, they like value for money, and many of our Russian clients are careful decision makers on the financial front, but that does not prevent them from buying top properties.”

Many of the apartments owned and occupied by Russians are for family vacations to the resort, which sees around four million tourists per year. This trend in part explains why most Russian buyers are interested in long-term investments in property — namely in order to have a familiar family base for their trips to Savoie, Dos Santos said. The region’s cuisine is another popular feature for tourists, but the more functional advantage of having Geneva and its airport so near is what gives the area an edge, she added. “People like the ease of being able to travel door-to-door from Moscow in a little over three hours. It’s comfortable and handy.”

Chamonix Immobilier said that it has partners in Russia, such as Interproperties and Arcasa Group, who help scout for buyers, while in France they have just opened a Russia desk, with a native speaker to facilitate deals. Dos Santos was able to cite two “major sales” to Russian clients in the last month, and six collaborative deals with partner firms plus “many, many enquiries”. She said that it is Russians’ cautiousness that means they take longer to decide on what to buy, but once they are sure, the transaction moves quickly. A deal with bank BNP Paribas on providing mortgage schemes for potential buyers is also in operation, Chamonix Immobilier’s web site showed, and the company is affiliated to international real estate agent Knight Frank, acting as the local representative in Chamonix. Such collaborative representation appears to be a common phenomenon in Alpine resorts, where local firms keep a hold on the market, preventing the major international operators from moving in to mop up all the business.

Pierre et Vacances Leaseback schemes, which are being used by several Russia-based ski resort developers in France, have also been reported as a useful way for firms to avoid making crippling valuations on assets for disposal.

Chevallier Immobilier is another example of this business practice, albeit along slightly different lines. The local Savoie company operates the international Century 21 brand franchise, as seen in a number of other countries, including Russia. Chevallier is locally staffed and run and offers sales and lettings from its offices in both Chamonix and Les Houches, a nearby resort that happens to be twinned with Russia’s flagship ski resort, Krasnaya Polyana, near Sochi.

Mountain Leaseback

An Alpine retreat of a different investment kind is being marketed via Moscow-based firm IntermarkSavills. For this its partner, Pierre et Vacances, a Paris-based company that runs a number of investment projects in France and other countries, is employing an already popular tried-and-tested leaseback scheme to help attract buyers. The new real estate project is planned for the French Alpine resort of Avoriaz, in Upper Savoie, about 80 kilometers north of Chamonix and even closer to the travel hub of Geneva.

Savoie itself is an historically complex region that maintained a staunchly independent stance from the rest of France until the 1860s, when the small kingdom was absorbed into France proper. Nowadays, although the region has distinct cultural features, such as its food and wine, it is an integral part of France’s tourism business and its international attractiveness.

The Pierre et Vacances scheme in Avoriaz requires investors to put 100,000 euros ($150,000) into an apartment in the town, representing half of the total purchase cost. As with Chamonix Immobilier, Pierre et Vacances offers mortgage plans for its buyers, the difference with the latter being that the option of a mortgage is built into the purchase agreement, not a separate feature to the deal. Of course, one major consideration is that the Avoriaz project has not been built yet, meaning investors, whether from Russia or not, are not able to try before they buy.

In fact, when it comes to leaseback deals, sampling the goods investors purchase is not quite like buying a property outright. The key feature of a leaseback deal is that once the sale has gone through, the seller then takes on a lease contract on the property, allowing the owner to spend a proportion of time there, but commonly there are leasing rules whereby the property is let out to third parties on a short-term basis for a set period of the year. For this Avoriaz project, after ten years, the contract may be renegotiated by the investor for a further ten year lease, IntermarkSavills’ deputy marketing director, Oksana Kobzareva, wrote in a press release for Pierre et Vacances.

	Pierre et Vacances Leaseback schemes, which are being used by several Russia-based ski resort developers in France, have also been reported as a useful way for firms to avoid making crippling valuations on assets for disposal.

The Pierre et Vacances project in Avoriaz guarantees rental income on the 40-plus square-meter apartments. They form part of a complex that includes a large interior swimming pool and affords mountain views on what is considered by some to be the snowboarding capital of the Alps. Just as the resort is popular among families, the very emphasis on snowboarding in the area makes Avoriaz a particularly attractive snowsports location for the young. Tourist feedback on the town’s official web site confirms this: “You can do whatever you want,” wrote one French teenager. Indeed, some of the smaller, one-bedroom apartments planned for the Pierre et Vacances leaseback project might be suitable for young individual holidaymakers in the area.

Leaseback operations are a common feature of the French real estate market, as well as being popular in the U.K. and the United States. Since the start of the economic crisis, they have also been reported as a useful way for banks and lenders to dispose of toxic assets, by entering into sale-and-leaseback deals with governments. This would allow for the disposal of assets without the need for crippling valuations to be made of assets in the first place, the BBC reported in January 2009. Indeed, Chamonix Immobilier’s Moscow-based partner, Kingsland, said that it too has a number of leaseback operations in the Rhone-Alpes region of France, meaning this could become a popular means for Russians to invest in luxury Alpine real estate with the security of a guaranteed return on their asset.