As our Côte D’Azur development nears completion, we explore the enduring appeal of the South of France as both a holiday destination and an investment opportunity, with insights from Edward de Mallet Morgan, Head of Private Office and Super Prime Sales, Estate Prestige, at Knight Frank.
Autumn of this year sees the completion of our villa development on the Cote D’Azur. Comprising 26,000ft² , the property sits within two hectares of land near the charming medieval town of Èze.
For many decades now the South of France – specifically the region of Provence-Alpes-Côte d'Azur – has attracted real estate investment and second home-buyers from around the world. With insights from local real estate specialist Edward de Mallet Morgan of Estate Prestige Knight Frank, we look at the factors that make the region so attractive to both holiday homebuyers and investors.
Ease of Access
Its location within easy reach of much of Europe and the Middle East, as well as its efficient and reliable transport links, make the South of France a relatively short-haul and affordable destination for regular travellers to the region.
Many major resorts within Provence are located within a couple of hours’ drive of the international airports at Nice and Marseille, with smaller airports at Toulon and Avignon also servicing international travellers.
For domestic visitors, or for tourists travelling south from Paris, France has a famously fast and efficient French train network, the TGV. French autoroutes are also generally safe and well maintained for those who prefer to take a slower and more scenic journey south.
High rental yields
Property investors can benefit from a double rental market in the South of France: high-value weekly holiday lets during the peak tourism season combine with longer-term, lower-cost lets during spring and autumn.
This rental yield may be particularly beneficial in the area of Languedoc, where properties are typically more affordable than in Provence. According to the website Long Term Rentals in France, buyers in Languedoc can expect to see an annual rental yield of up to 9%, and may be able to pay off a property within a decade.
Contributing to high rental yields and steadily increasing property prices in the South of France is a scarcity of supply. The demand for elegant villas with views of the Mediterranean is understandably high among HMWIs, but a shortage of prime properties in the area means both rental and sale prices continue to increase, offering long-term value for money for investors.
Situated halfway between Monaco and Nice, the coastal commune of Saint-Jean-Cap-Ferrat sees particularly high demand, according to Edward de Mallet Morgan: "Cap Ferrat remains the number one residential address in France, commanding the highest prices. Villas here continue to sell on and off-market. While buyer volume is limited, those in the market are serious."
Visa relaxation
Recent amendments to the French Immigration Bill indicate that the government may seek to encourage second-home ownership by non-French nationals.
Visitors from outside the EU currently need a long-stay visa, costing over 300 Euros, if they wish to stay in France for longer than 90 days. However, support is growing for an amendment that would allow second-home owners more flexibility, supporting non-visa stays of up to six months.
This amendment offers encouragement to international buyers, especially in contrast with Spain, where the government is considering introducing higher property taxes on foreign buyers.
Resilient tourism
Following a dip in tourism levels globally in the wake of the Covid pandemic, the South of France has rebounded to reclaim its status as an alluring destination for travellers. This was helped by the French government’s swift and all-encompassing response to the pandemic, which kept the economy afloat and cushioned the impact on tourist hotspots.
It’s not just the appeal of the Mediterranean in summertime that draws visitors to the region: Provence hosts events and festivals of major cultural significance all year round. The Cannes Film Festival has been a defining event in the global arts calendar since 1939, while the influential Cannes Lions Festival of Creativity recognises achievement within advertising and media.
Edward de Mallet Morgan says: "Cannes – and indeed Antibes – stands apart as a location with both full-time residents and holiday home buyers seeking investment properties. Some of the largest homes on the Riviera are in Cannes, and year-round events like the Cannes Film Festival ensure consistent rental income for investors."
Alongside its world-famous casino, opera house and cathedral, the historic principality of Monaco is a centre for motor racing, hosting the Grand Prix each year. Saint Tropez, meanwhile, attracts luminaries from the worlds of art, fashion and film to its glamorous harbour, golden beaches and lively nightlife. "St Tropez is its own market – a true 'beach resort' destination," according to Edward. "It attracts both traditional estate buyers and those, much like in Ibiza, seeking properties away from the crowds but still within easy reach of the action, sometimes even with a helipad to bypass traffic."
The lifestyle factor
"While other destinations tend to be more tax-driven, France clearly stands out for its unmatched lifestyle appeal," Edward says. "Notably, many Monaco residents own villas on the French Riviera, much like Londoners owning second homes in the Home Counties – enjoying Monaco’s low taxes while benefiting from access to the Riviera, the mountains, and the sea." As well as British passport holders, Edward's team has recently worked with buyers from the USA, Switzerland, Italy and the Middle East, with American buyers "arguably the most dominant demographic at the top end of the market."
REDD CEO Russell Smithers says, “International wealth investing into the South of France provides an exciting opportunity for both new projects and integrated portfolio management. If you would like to discuss an investment opportunity in the region, please get in touch with the team here at REDD.”
REDD is a delivery and realisation partner for property investors and private individuals in the world’s wealth capitals. Discover our latest project in Èze or contact us for more information.
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