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Sports: Affordable alpine property - Erna Low

An increasingly tempting prospect

Ski fanatics should rest assured that investing in property on the slopes does not necessarily have to cost an arm and a leg, and can bring in substantial rental income if you choose your investment carefully. There are some affordable, quality options out there that offer best value in terms of investment potential, as well as superb choice for hassle-free owner occupation.

In general, the popular ski resorts are currently performing well, and overseas investors should take notice of the growing options this winter, particularly in the French Alps. We are expecting an increase of prices in the next three to four years, of perhaps 2-5% each year, depending on location. This will be especially evident in leaseback properties, due to a lack of new building being launched.

At Erna Low Property, we currently have a good selection of apartments at reduced prices, in sought after alpine resorts in France - namely Arc 1950 in Les Arcs, and Residence le Hameau du Kashmir in Val Thorens. These resorts offer high altitude skiing, and cater for all levels of skier.

Now linked to La Plagne, Arc 1950 forms part of the newly created ‘Paradiski’ area. On-going investment into the infrastructure continues to add value to the resort and enhance the skiing year on year. Designed in a sympathetically alpine Savoyard style, as a completely 4* village, Arc 1950 benefits from being wholly pedestrianised, so all the properties are ski-in ski-out. The village is made up of local boutiques and grocery shops, restaurants, several outside swimming pools, kids' club, its own ski school and is hugely popular with families.

Properties can be purchased either through a classic freehold or the French government-backed leaseback scheme, offering VAT waiver of 19.6%, restricted usage rights, and guaranteed rental return through the newly appointed management company, Pierre et Vacances. There are some excellent deals to be had in the village, with leaseback property prices from as little as €4,000 per sqm. Apartments range from one to four bedrooms with traditional features and tasteful décor, with prices from €165,000 to €995,000. The rarer freehold properties tend to command premiums.

Until now, Val Thorens has been something of an undiscovered mountain gem. It is the highest point of the Three Valleys ski area at 2300m and boasts the longest season running from November to May, which makes it a sensible option for investors looking to reap the rewards of rental investment. Occupancy rates between 2010-2011 were the highest in France at 80.1%. This winter the operator has invested over €10million to maintain the resort’s world-class reputation and accommodate the anticipated increase in visitors. New and renovated hotels offering 3*, 4* and 5* accommodation, along with a host of eateries and a high end, high altitude spa overlooking the Cime du Caron, all offer a stimulating alpine experience.

Val Thorens signifies the best value in terms of high-end investment potential across the Three Valleys, with higher occupancy rates and lower prices per sqm than neighbouringf Courcheval or Meribel. The 4* ‘Residence Le Hameau du Kashmir’ offers a unique investment opportunity. Managed by one of France’s most established operators, this ski-in ski-out development commands panoramic views, and benefits from great faclities, including spa, pool and steam rooms, and a Michelin starred restaurant. Properties are available on a leaseback scheme and prices range from €277,592 to €613,712.

Investors interested in affordable alpine property should bear in mind a few things. Firstly, new build properties, or those built within the last five years, have the advantage of reduced notary fees - 2.5% compared to 8% on resale properties. For a real bargain, they could consider residential areas in the valleys rather than in a ski resort. Prices are half those up on the mountain, but travel times to slopes, as well as the lack of the ski-in ski-out and après ski atmosphere, may affect the appeal and therefore rental potential of the property.

Finally, investors in ski property will benefit from considering the existence of a strong summer market. Both Arc 1950 and Val Thorens offer year-round appeal, with fantastic summer outdoor activities on offer. The summer market looks set to rise in popularity as the French Alps gain visibility as a summer destination, making alpine property a yet more sensible, and lucrative, choice.

Uploaded October 2011

Joanna Yellowlees-Bound

Joanna Yellowlees-Bound is CEO of Erna Low Property. www.ernalowproperty.co.uk

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