Introduction
We’ve been scouting for a discounted French leaseback deal for the last six months. These are as prized as they are rare, because the French local investment market is so strong and finance so readily available that developers have no need to discount to sell. But we persevered.
It was an old acquaintance from Jonty’s short career in France as a goat-herder (don’t ask) who finally led us to this deal. And what a deal it is. Word of a Parisian, Best Western-branded apart-hotel with a 14% discount, a guaranteed 5.09% net rental yield, VAT cashback, excellent leveraging and low entry deposits saw us embarking on the very next Eurostar to Paris.
Meeting the developer, we immediately snapped up 55 of the 120 units for you – from under the very nose of a French competitor – and negotiated hard to secure a limited-time price 14% below their list prices. To further exasperate our competitor, we even brokered five days per annum free usage for the first three years you own the unit, ideal for families wanting a place to stay for free when travelling to Disneyland Paris or to the heart of the capital.
For the uninitiated, the beauty of a discounted leaseback is that it boosts your rental yield and ensures you have something competitive to offer when selling into the local market. This sort of packaging underwrites your exit strategy. You won’t find a much better location either. Ten minutes from Disneyland Paris and just 35 minutes from the city centre, the four-star world-renowned Best Western Marne la Vallée is in the suburb of Bussy Saint-Georges. The area is a dynamic and expanding business hub which supports the continued growth of the region and ensures your investment has only one way to go – up.
Your investment is more secure too. French leasebacks are the government treasury bonds of the property world – safer long-term investments, with limited downside. The advantage of property over bonds however, is that you can leverage property. In the investment time-frame, you’ll have had a steady guaranteed income, as well as ending up with a mortgage-free asset, worth many times your original investment. It is impossible to do the same in the bond market, unless you’re a risk-taking hedge fund manager.
This is why leasebacks are so beloved by French investors, who buy three or four at a time, to balance out their portfolios and safeguard their retirement plans as well as tax breaks. As these are commercial properties, they can be put into your SIPPs also (please consult your financial advisor regarding this)
So, sensing a renewed vigour and confidence in the French economy, thanks to the election of economic reformer Nicolas Sarkozy, we say: “Vive la France!”
Read on to find out how you can get all the VAT back and exit capital-gains free.
Best wishes,
Jonty and Alise Crossick
An apart-hotel is short for ‘apartment hotel’ and consists of self-contained rooms within a hotel infrastructure – or buy-to-let hotel units. The idea is simple: you invest in a room and let a management company run the letting of it on your behalf. This takes away the hassle, and you also get to use it yourself each year.
All apartments are fully furnished and ready to use, with televisions, fridges, towels, sheets and cutlery provided by the hotel. The concept was first launched for families looking to ‘live’ in the hotel, rather than ‘stay’. Therefore the length of time spent can range from a few days to weeks, months and even up to a year.
It is an excellent idea for business accommodation as well as tourism as it is more flexible and potentially cheaper than a regular Parisian hotel.
Our apart-hotel
The hotel is the part of the well-known and reliable Best Western group, which boasts the title “world’s largest hotel chain”. It has over 4,100 hotels across the world, with a presence in most major cities.
A peaceful setting in beautiful, green surroundings, this complex is attractive to businesses with its 13 meeting rooms (accommodating 8-50 people), internet connection and high-quality services – but also appeals to tourist families with its four-star amenities including a spacious pool, gym, sauna and nearby golf facilities, as well as with the obvious pull of its proximity to Disneyland Paris.
The local business park will balance the demand from Disneyland by bringing visitors during the week, while tourist families can visit Mickey at the weekend.
There are 120 self-catering studio apartments, 55 of which will be sold exclusively through us. The remaining 65 will be sold through a French broker to the local market at a higher price – in fact we have negotiated a 14% discount to their list prices.
Unit sizes range from 20.5 to 38 m2 and every apartment encompasses a fully fitted kitchenette, bathroom, desk, television, lamps, four chairs, and even cutlery and crockery for four persons.
The operator is Atrium Tourism, a specialist in residence management and particularly in apart-hotels, with a solid ten-year track record across various hotels in France. They partnered with Best Western because this large hotel chain provides a great brand for the apart-hotel.