PL 84

PROPERTY LETTER 20th October 2009.

Dear All,

The last few months of 2008 and the first part of 2009 were very tough, but we’re still here. We had almost no sales at all through our agency or personally from about September to April. Rentals too nose-dived and major congresses shrivelled to look like very small ones.

That’s all changing thankfully and we and our staff and colleagues have a spring in our steps again. In fact the market has visibly come alive. Our girls in the agency are working overtime and at weekends handling enquiries, showing product and making sales. We now find ourselves looking for new properties to meet demand where only a few months ago we had properties on the shelf. Three of the last five properties that Vicky and I have personally been involved in never had a “for sale” sign on them, were never advertised, and didn’t make it into a Property Letter - because they sold as soon as they appeared on the market. A further two that we tried to secure for S.A. investors were “lost” because we didn’t move quickly enough. That is something we hadn’t experienced for a couple of years.

I have always maintained (through my Property Letters) that the French Riviera is a special market, different to the rest of France, different to the rest of Europe. It has its own dynamic. I have some figures (below) which refer to France as a whole. They are interesting to compare with wherever you might live, be that the UK, the USA, Ireland, Australia or South Africa. I suspect that the property market has fared a little better in France than in many of your own countries for reasons I have explained in previous Property Letters i.e. the French don’t have a culture of debt. When I have figures available for our own little sector (the Alpes Maritimes, Cote d’Azur) I think I will be able to show that we have fared better than the rest of France.

Credit Foncier Bank is one of France’s biggest mortgage lenders and they support my contention. They have assessed the supply and demand in all areas of France, together with an evaluation of local demographic, economic and infrastructure factors in 76 main centres. They report a migratory trend towards the south due to strong economic development and good transport links. They divide France into five levels and Cannes, Nice, Toulouse and Montpellier in the south form the top band with Lyon, Strasbourg, Nantes and Caen further North, all recording a fall of at worst 5% in property prices. Only these 8 of the 76 centres fall into the top band. The suburbs of Paris are relegated to a second division place with up to 10% fall, with the fifth and worst affected hovering around the 20% level.

L’Agefi is a reputed publication which appears in print and online and is the first serious port of call for news of business and finance, corporate, investment, property, wealth and asset management news, and so on.

At the end of September they carried an appraisal of the property market in France today, and this is a summary:

The summer brought its share of pleasant surprises, illustrated by the unfreezing of a paralyzed real estate market. The value of transactions in second hand residential real estate rose by 39% in the 2nd quarter compared to the 1st quarter, although it was still well below the figure for the 2nd quarter 2008, and that was below 2nd quarter 2007.

How is it doing?
Critical to short term rentals in Cannes is the conference market.
If we took a “photograph” of the major conferences and festivals as they were in 2009, we would see them down on 2007 and 2008 by 5% to 40% depending on the industry. For example the real estate conferences were way down in terms of attendees, but the TV and communications conferences were only marginally down. In addition the average “spend” of delegates and visitors to Cannes is down as much as 30%.

On the other hand our own share of the rental market, particularly during the Film Festival, has increased dramatically, and some conferences are growing in spite of the recession. The Boat Show in September is growing nicely year on year, and the MIPTV and MIPCOM conferences are already on the rebound. Indications are already that MIPIM is going to be better and bigger than in 2009 because we are taking bookings, whereas this time last year we were only taking cancellations.

There are many, from dental and medical conferences, to gaming, magicians’ and circus gatherings, but some of the bigger ones are:

MIPCOM: The World's Audiovisual Content Market
Month: October
Duration: 5 days
No of attendees: 11 000 from 522 companies representing over 95 countries.
MIPCOM is a TV programme market, where mobile networks, character licensors, merchandisers and advertising companies, producers and distributors build alliances for the future; existing producers find new sources of revenue.

Tax Free World Exhibition
Month: October
Duration: 5 days
No of attendees: 5289 people from 2638 companies.
TFWA World Exhibition brings together the industry's most prestigious luxury brands and attracts thousands of key buyers, airport authorities, agents, distributors and journalists from around the world. The exhibition is the industry's key event for recognising new trends & acquiring a global view of the international market.

MAPIC: The International Market for Retail Real Estate
Month: November
Duration: 3 days
Number of delegates: 6 458 delegates from over 55 countries.
MAPIC is the leading market for the expanding industry of international retail real estate. It attracts all the key players, creating a unique community in one place at one time. MAPIC provides an exclusive platform for companies to showcase new concepts and developments.

International Luxury Travel Market (ILTM)
Month: December
Duration: 3 days
Number of delegates: 52 countries.
The Luxury Travel Market (ILTM) is the only global trade event dedicated to enabling specialist luxury travel buyers from the world’s top 52 outbound countries to meet with the worlds leading luxury travel suppliers. Specialists in the luxury travel market have very specific needs which cannot be satisfied by their mainstream counterparts. It is therefore a trade medium that is focused exclusively on this sector.

MIDEM: The World's Music Market
Month: January
Duration: 5 days
Number of delegates: 10 000.
MIDEM’s music conference brings the heart of this ever-evolving industry to Cannes. It enables people involved in the music industry to discover new sounds and services, explore business opportunities, learn about tomorrow’s industry, make deals, enjoy live music…. and party!

MIPIM: The World's Property Market
Month: March
Duration: 5 days
No of attendees: 18 000 from 2051 companies.
MIPIM is The World's Property Market where advisors, developers, regional authorities, investors and corporate end-users gather information about new building projects and initiate deals and partnerships.

MIPDOC: The International Showcase for Documentary Screenings
Month: March/ April
Duration: 2 days
Number of participants: 1000 participants from 386 companies & 61 countries.
A relaxed two-day event in the lead-up to MIPTV

MIPTV featuring MILIA: The World's Audiovisual Content Market
Month: April
Duration: 5 days
No of delegates: 12 000 delegates from 99 countries.
The World’s Audiovisual and Digital Content Market attracts all the global movers and shakers in the world of television. This annual event is the context for negotiating programme rights, co-productions and partnerships

Cannes Film Festival
Month: May
Duration: 10 days
No of attendees: 30 000.
The Cannes Film Festival is the world’s most prestigious forum for the exposition of all styles, schools and genres of film. As well as being the most special place for film industry professionals to meet, the festival is especially concerned with recognising the talents of the artists that contribute to the growth of the medium.

Cannes Lions Advertising Festival
Month: June
Duration: 7 days
No of attendees: 75 countries.
The Cannes Lions International Advertising Festival is the only annual gathering of the world's advertising, creative, direct marketing, interactive, film, radio, media, sales promotion and marketing communities.

Cannes Boat Show
Month: September
Duration: 5 days
Size: 50 000 visitors, 650 Yachts!
For exhibitors from the luxury yachting and pleasure boating community this is the industry's premier event. There are at least 50,000 boating enthusiasts that visit the show and one can expect to see 450 boats in the water - including 360 motor boats and 90 sailing boats - and 200 boats on land.

Recently British Airways commissioned the Analytic Services of the Harvard Business Review to find out the answer to that question. The survey analysed returns from 2 211 businesspeople, 70% of whom are executives in companies that operate in multiple countries. Across the board, face to face meetings were seen as the most effective method for conducting business with key stakeholders, compared with videoconferences, teleconferences and webinars. Fully 95% said that face to face meetings are the key to success in building long-term relationships and 87% believe that face to face meetings are essential for “sealing a deal”.

A number of such analyses have been commissioned recently, in a time when cost cutting has been high on corporate agendas. The Hilton Group used International Marketing Research for their investigation and discovered that in a time of low business morale, these cuts appear to be making matters worse. Fully 81% of the 600 executives from France, Germany, the UK and the US said that face to face meetings increase business productivity and results. 90% of those polled in Germany and France said that crucial business relationships are not possible without meeting in person, compared to 75% in the UK.

In February of this year a remarkable advertisement appeared in the New York Times.  The Chairman of Wells Fargo responded to criticism in the media of an “employee recognition event” planned to be held in Las Vegas; criticism which led to the cancellation of that booking. He asked “Who loses besides our team members? The workers who depend on our business. The hospitality industry. Housekeepers. Restaurant servers. The airlines. The problem is that many media stories on this subject have been deliberately misleading. These one-sided stories lead you to believe every employee recognition event is a junket, a boondoggle, a waste, or that it’s for highly paid executives. Nonsense! For many it’s the only time in their lives that they’re publicly recognised and thanked for a job well done. This recognition energises them. It inspires them.”

I think it is fair to surmise that we will not see the end of business “events” and congresses in Cannes anytime soon! Therefore we will continue strive; to improve and develop our services to business and holiday visitors to this great jewel of the Mediterranean.

With kind regards,
Guy.