Prop­erty

Euro­pean man­sions can be great in­vest­ments, or even busi­nesses—and with favourable ex­change rates they’re be­com­ing more af­ford­able, writes Richard War­ren

Hong Kong Tatler - - Contents -

Euro­pean man­sions can be great in­vest­ments, or even busi­nesses—and with favourable ex­change rates they’re be­com­ing more af­ford­able

urope’s cas­tles, palaces, manor houses, stately homes and larger vil­las are at­trac­tive not just as tro­phy homes, but as ver­sa­tile in­vest­ments. And they are likely to be­come more af­ford­able to Asian buy­ers over the com­ing months as cen­tral bankers in Europe and the United States try to sta­bilise their economies.

Es­tates can be good in­vest­ments be­cause they are sought-af­ter abodes, but also be­cause man­sions, in the city or coun­try­side, can make great ho­tels. Cot­tages and other smaller prop­er­ties, which can be found on many coun­try es­tates, can make at­trac­tive holiday homes. Farm­land, wood­land, vine­yards, quar­ries and fish­ing rights each have a com­mer­cial value. Es­tates are more than a real es­tate in­vest­ment—they can be a prop­er­ty­based busi­ness that pro­duces an in­come.

There are plenty of ex­am­ples of in­vestors turn­ing tired Euro­pean es­tates into suc­cess­ful en­ter­prises. Castello di Res­chio in the Ital­ian re­gion of Um­bria is one ex­am­ple, where the aris­to­cratic Bolza fam­ily is con­vert­ing each of its 50 aban­doned farm­houses into lux­u­ri­ous

ES­TATES CAN BE GOOD IN­VEST­MENTS BE­CAUSE THEY ARE SOUGHT-AF­TER ABODES, BUT ALSO BE­CAUSE MAN­SIONS CAN MAKE GREAT HO­TELS

holiday homes for sale, and cre­at­ing fa­cil­i­ties, such as a restau­rant, for res­i­dents.

Es­tates on the mar­ket that may of­fer op­por­tu­ni­ties for busi­ness-minded buy­ers in­clude Con­trada San Vin­cenzo in Si­cily, Italy. The 47ha wine es­tate comes with a 13-bed­room, 13-bath­room manor house, sep­a­rate guest house and out­door swim­ming pool with bar, so the ¤10 mil­lion prop­erty is “ideal … for ei­ther a pri­vate manor or bou­tique ho­tel,” ac­cord­ing to sales agent Sotheby’s In­ter­na­tional Realty.

Over the past cou­ple of years, Hong Kong in­vestors have in larger numbers tar­geted Europe’s sec­ond cities, such as Manch­ester, northern Eng­land, and also re­sort ar­eas like south­ern France, helped by the strength­en­ing Hong Kong dol­lar. The cur­rency has ap­pre­ci­ated by 5 per cent against the euro and 20 per cent against the pound over the past two years, with a par­tic­u­larly strong rise against the pound fol­low­ing Bri­tain’s ref­er­en­dum de­ci­sion in June to exit the Euro­pean Union (EU).

The ini­tial re­ac­tion of over­seas prop­erty in­vestors to the Brexit vote has been mixed. Some are sell­ing up, others pre­fer­ring to wait and see, with the rest en­thu­si­as­ti­cally mak­ing pur­chases, en­cour­aged by favourable ex­change rates. Chi­nese in­vestors have been among the most bullish, with 74 per cent of re­spon­dents to a Dtz/cush­man & Wake­field sur­vey of main­land de­vel­op­ers say­ing Brexit rep­re­sents a good op­por­tu­nity to in­vest in Bri­tish prop­erty.

Asian buy­ers could be­come more preva­lent in Europe’s prop­erty mar­ket in 2017 as their spend­ing power is boosted by a com­bi­na­tion of dif­fer­ing eco­nomic poli­cies be­ing pur­sued ei­ther side of the At­lantic. In the United States, the trend to­wards higher in­ter­est rates is rais­ing the value of the US dol­lar, while the Euro­pean Cen­tral Bank’s on­go­ing pol­icy of quan­ti­ta­tive eas­ing is putting down­ward

FOL­LOW­ING BREXIT, A WINDOW OF BUY­ING OP­POR­TU­NITY HAS OPENED FOR IN­VESTORS WILL­ING TO TAKE THE RISK

pres­sure on the value of the euro, and that means the Euro­pean cur­rency is likely to con­tinue fall­ing rel­a­tive to the green­back.

Lon­don-based con­sul­tancy Cap­i­tal Eco­nom­ics ex­pects the di­ver­gence in mon­e­tary poli­cies pur­sued by the US and EU to re­sult in the US dol­lar reach­ing par­ity with the euro in 2017.

Un­cer­tainty over Bri­tain’s future trad­ing re­la­tions with the EU and the rest of the world is likely to per­sist for at least an­other two years—the length of time slated for ne­go­ti­a­tions un­der the cur­rent rules. Given that they haven’t even be­gun yet, it could be well into 2019 be­fore the future be­comes clearer. Cap­i­tal Eco­nom­ics does not ex­pect the pound to fall much fur­ther since it has al­ready slumped heav­ily since June, but it does not ex­pect the cur­rency to rise any­time soon—and thus a window of buy­ing op­por­tu­nity has opened for in­vestors will­ing to take the risk.

When it comes to find­ing an es­tate to buy, it’s best to con­tact an agency to find out what’s avail­able rather than search­ing prop­erty por­tals and ad­verts, says Alex Law­son, di­rec­tor of farms and es­tates at Sav­ills UK.

“Some of the best es­tates never make it onto the pages of prop­erty mag­a­zines and we al­ways have a num­ber we are of­fer­ing on a

con­fi­den­tial ba­sis,” says Law­son. “We of­ten know who is in the mar­ket for a par­tic­u­lar type of es­tate and will ap­proach them di­rectly when we are asked to con­fi­den­tially ‘place’ some­thing that will suit them. This pri­vate ap­proach is hugely ap­peal­ing to many own­ers who do not want their homes in the press or in­deed how much it is on the mar­ket for. The higher pro­file the prop­erty or owner, the greater the chance of a pri­vate sale.”

When buy­ing an es­tate with a work­ing farm or vine­yard it of­ten pays to get ad­vice from pro­fes­sion­als with ex­pe­ri­ence of these busi­nesses, such as Buzwine, which helps in­vestors to se­lect and man­age wine es­tates around the world.

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TOP OF THE WORLD From left: Castillo Mal­lorca, in Spain’s Balearic Is­lands, fea­tures a dock for a 30m yacht and a west-fac­ing cave of­fer­ing mag­i­cal sun­set views; the el­e­gant draw­ing room of Chateau Le Mans, an 18th-cen­tury prop­erty in northern France

TUS­CAN AP­PEAL Villa Anna, a re­stored 18th-cen­tury villa in Pi­etrasanta, Italy, has a hall­way that leads to a ter­race over­look­ing the Lig­urian sea

BRI­TAIN BECK­ONS Kingston Lisle Park in­cludes a Grade Ii-listed Ge­or­gian house within a 104ha es­tate

WOW FAC­TOR Chateau Le Mans cov­ers 30 hectares in­clud­ing for­mal gardens, wood­land and mead­ows

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