INSIDE VIEW 2017 Overview

Monaco market overview There are few places in the any more”, yet that is precisely UHNWIs expect. These properties world where one would what Monaco does, with its only offer the best value in Monaco, but consider buying off-plan opportunity for expansion to extend the price must be right to take into property eight years in into the sea. account the refurbishment costs, advance, but Monaco is far effort and time required to bring The latest 2bn land reclamation from typical. € them up to scratch. programme will see six hectares This glamorous pocket of the Côte of new land created from Sicilian Time is on the side of today’s d’Azur is unwaveringly desirable, sand. On it will sit 120 new high-end buyers in Monaco, however, with thanks to the superlative location, apartments whose prices will be the average age now 35-55, lifestyle and fiscal advantages it in excess of €100,000 per sq m – compared with the 55-60 plus offers. But it also has a minuscule which ultra prime stock in Monaco demographic of a decade or supply of new property and a limited is already achieving. Of those 120 so ago. They make the most of amount of land, which means that units, 50 have already been retained the good schools, the growing Monaco is a place where you need to by the developer, leaving just 70 to number of great restaurants and plan ahead. sell with several years to go until the year-round buzz. As a result, completion. neighbourhoods are changing too, The privileged Principality that is with organic stores, boutique gyms little bigger than Regent’s Park, By then, who knows what and vegan restaurants cropping up is currently awash with cranes, stratosphere Monaco’s prices to serve a community who want reminiscent of 40 years ago when the will have reached. Such is the healthy living with their high life. late Prince Rainier III embarked on his demand for new waterfront homes building spree. Major infrastructure that price will be little deterrent to While the rest of mainland Europe projects are underway, from the buyers – and their tax advisers - still looks less attractive and Britain regeneration of landmark addresses who are thinking ahead with wealth comes with high buying taxes, such as Place du Casino to new preservation in mind for future buyers who can’t find what they road tunnels to ease the congestion generations of their families. are looking for in Monaco find other for the tens of thousands who cross ways to make this unique location For those with ambitions for a home work for them. Some will rent and the border into Monaco for work in Monaco but little appetite for wait. Others will buy something each day. There is a wave of new the waiting game, the options are smaller than planned, plus a larger residential development taking place limited. A buyer who arrives with property nearby in France perhaps too, but there is still little stock on a handful of children and a nanny and a yacht. offer for hungry buyers, with 75% of in tow may have five, at most 10, properties under construction either Unlike Caribbean tax havens, apartments that might be suitable. social housing or high-end ‘built to Monaco has everything they want Even then, most will be beyond their let’ apartments. on tap, so a sacrifice in the size of budget and will lack the size and property is worth it for the location When a rare new development does quality that such buyers are used to. and lifestyle on offer. go on sale, its properties are likely to Much of Monaco’s older stock be pre-sold, then sold again before It is no less convenient for such is being refurbished, but there is completion. That is the case with two clients to be domiciled in Monaco still a long way to go. While the current schemes near the harbour, than in London – and they can new generation of development whose €2m starting prices may always pop to London for supper, is bringing higher standards of suggest luxury for many locations but or Vienna for the weekend. build and design and a new type are middle of the road for Monaco. of amenities to Monaco - Tour The solution – albeit a complex and Odéon, for example, has a spa, Edward de expensive one – is land reclamation. concierge service and chauffeured Mallet Morgan Monaco was just emerging as a Mercedes at residents’ disposal Head of the Monaco Desk playground for the rich when the – the older properties usually American writer Mark Twain advised need considerable work to be of “Buy land. They’re not making the standard that today’s global For sale - , Monaco

02 Knight Frank Inside View Knight Frank Inside View 03 Lifestyle

The sailing king of Monaco Nick Edmiston, founder of Edmiston & Co, has led the way in Monaco’s super-yacht industry for 30 years. Here he talks about life in the privileged Principality whose yachting scene has a prestige that is unrivalled.

By Zoe Dare Hall SAVANNAH; now available to charter through Edmiston

Yachting is inextricably linked to life yachting, now run by his son Jamie. a few deals for yachts costing up “The Brits were mainly older, a very progressive attitude and he comments. He travels widely in Monaco. “Every child in Monaco Edmiston, previously the CEO of to €100m. established retirees. Now Monaco it’s a good, vibrant place to live,” – “Connectivity has improved will learn sailing at some stage in yacht firm Camper & Nicholsons, is shifting towards a younger profile. Edmiston comments. massively and Monaco is easy to His advice to prospective investors their education,” the architect Sir moved to Monaco in 1989 and They have successfully sold their get to from the rest of Europe” – is never to spend more than 10% of These necessary irks that come Norman Foster commented at launched the company that has business or are still running a but he is never far from a yacht, their net wealth on a yacht – then with progress are, in any case, the opening of the Principality’s become a world leader in the business in yachting, banking or with his free time often spent to budget for 10% of that figure in overshadowed by the benefits of Foster + Partners designed Yacht sale, charter, management and investment. There is more of restoring pre-war classic models, the annual costs. “The cheap thing being resident in Monaco, including Club de Monaco. And there is no construction of super-yachts. a trend to continue working while including Nahlin, on which Edward is buying it. The expensive thing its favourable tax system and high better place to see Monaco life in living here and it’s becoming more VIII was told that news of his “I used to commute regularly is running it. You don’t want to sense of personal security. microcosm than at his waterfront attractive to families with kids. The relationship with Wallis Simpson between London and the south wake up in the middle of the night “You can walk around wearing paean to sailing. schools here are fantastic and most had broken and he was forced of France and was going to live worrying about it,” he says. children are at least bilingual,” says expensive jewellery and feel very to abdicate. The Yacht Club displays all the in Cannes, but Monaco is far safe. Many wealthy people are In his early days in Monaco, 20m Edmiston, whose younger children requisite accessories of the luxury more convenient and there are € used to always to being surrounded “It’s an expensive but rewarding was considered top whack. “Now were educated in state schools in lifestyle – the watch and fashion advantages to running a business by bodyguards but that’s not game,” says Edmiston. He is yachts are getting ever bigger Monaco before moving to boarding boutiques, the fine dining, super- here rather than in France,” he necessary in Monaco. That’s a big talking about yacht restoration, but and more sophisticated. The schools in England. yacht berths and priceless views comments. “That’s one of the most attraction,” says Edmiston. it could just as easily be a fitting most expensive one I’ve sold was over the Grand Prix track. But this important reasons for me to be here The world’s most densely-populated description of life in Monaco. 350m,” he says. Gyms, pools Monaco’s increasingly cosmopolitan sustainable building, powered by as, unlike other countries that are in € country comes with its challenges. and helipads have become staple and youthful population is injecting the sun and cooled by sea water, flux, Monaco has a very structured Some 50,000 people come into features. “I know one yacht that the tiny country with a new energy is a hub for all the community, financial regulatory system. It’s a Monaco by train or car each day for can land four helicopters at any in its restaurant, shopping and club with a children’s sailing school, a good place to do business.” work, which takes its toll on traffic time. The owner said ‘I’ve got flow and sparks fierce competition scenes too. “It’s a social hub. There restaurant that offers a €20 ‘menu It is arguably the only place to mine, but what about my guests?’” for parking places. “One of the are the formal events such as the du jour’ and a landscaped park be if you hope to find success in Edmiston recounts. “There’s nothing problems for people who work Red Cross Ball, the opera and ballet, on the roof that provides a new the super-yacht business. While you can’t do on a yacht now.” here is that they cannot afford to but there is also a more relaxed pedestrian route between the newcomers such as Montenegro live here. Of the 80 or so people social scene where wearing a dinner quayside and Casino Square. are making their mark on the world Like its yachting industry, much has in my office, only half a dozen live jacket is no longer de rigueur,” says yachting scene, “Monaco is the changed about Monaco in the 30 Physically and symbolically, the in Monaco. If you happen to be Edmiston, who can often be found Mediterranean centre of yachting years he has been there. “It was Yacht Club de Monaco’s new home, Monesgasque, the Prince looks frequenting the American bar at the and it has a prestige that nowhere fairly traditional and village-like which opened in 2014, sums up after you very well,” says Edmiston. newly-refurbished Hôtel de Paris when I arrived, but the advent of what this wealth, water-loving nation else can replicate. Ours was one and the Cipriani restaurant. new and very heavyweight money is all about. of the earliest yachting businesses There is considerable construction down there. Every successful has made it into a very cosmopolitan work taking place too, including on That’s when he isn’t at the Yacht It is also a natural home for Nick yachting company has followed and sociable place. There are now a new peninsula of reclaimed land Club de Monaco, of course, Edmiston, founder and chairman my example,” says Edmiston, fresh 3,000 British expats and about opposite the Grimaldi Forum. “There although his racing days are of Edmiston & Co, one of the most from 2017’s Yacht Show, which he 150 Russian families resident here,” is always building work going on, behind him. “Now life is very much recognised brands in international is confident will lead to securing he says. but it’s progress. Monaco has involved with the buying of yachts,” Nick Edmiston

04 Knight Frank Inside View Knight Frank Inside View 05 Research

Hot property

Monaco remains at the top of global wish lists. By 2026 the Principality will Monaco residents looking for an but more than 50,000 employees Work has also recommenced be home to 16,100 millionaires and 1,450 ultra high net worth individuals. investment, aware that new arrivals commute into Monaco from on project, but No other city in the world boasts the same wealth density as Monaco. often prefer to rent before deciding France and Italy each day. To perhaps most significant is the By Kate Everett-Allen where to buy. Shrewd investors are keep pace with this influx, public new Ilot Pasteur regeneration also aware of the lack of market investment is being ploughed into project which, by 2021, will Monaco has led our annual global liquidity in Monaco – the wealthy Monaco’s infrastructure, leisure deliver a new home for Charles comparison of residential values MONACO IN NUMBERS remain discretionary vendors – and retail facilities. III College, a media library and meaning such investors can rely since 2008 and prices continue to Aside from the 2014 upgrade of concert hall. The €220m scheme on long-term tenants. drift higher. Luxury residential prices Monaco’s Yacht Club, the new will provide better links between in Monaco reached 53,000 per € Not only does Monaco play 107m Albert II Tunnel opened Condamine and Fontvieille and sq m in the second quarter of 2017, € host to more than 850,000 in 2016 helping to reduce traffic add a new funicular cable car although super-prime values, such 37,550 0 16,100 202.7 50,000 overnight tourists per annum, congestion around Jardin Exotique. to improve access. as those for the most exclusive Number of residents, Number of Number of Hectares Number of commuters properties in Monte Carlo’s Carre Dec 2016 residential units millionaires (size of Monaco) that travel into completed in 2016 in 2026 Monaco each day d’Or, can extend beyond €100,000 per sq m. Monaco: Residential sales by neighbourhood Knight Frank Research, IMSEE In last year’s report we highlighted LA CONDAMINE LARVOTTOLA CONDAMINE LARVOTTOLA CONDAMINE LARVOTTO the widening gap between the price Which area has seen the highest number appeared to be a strong pipeline of maintenance of their wealth over50 200 of residential200 50 sales in the last decade? 4.0 200 200 4.0 of resales and new build property 3.5 3.5 40 40 new residential development. the next five years. 150 150 LA CONDAMINE 3.0 150 150 3.0 as well as what, at first glance, 30 30 8.1% 2.5 2.5 Perhaps surprisingly, Monaco 100 100 FONTVIEILLE 2.0 100 100 2.0 However, most of this new stock 20 20 11.4% 1.5 1.5 remains a long way from breaking is home to a large volume of 10 50 50 10 1.0 50 50 1.0 Monaco on top 0.5 0.5 old residential stock in need of 0 0 0 0 JARDIN 0.0 0 0 0.0 Prime prices as at June 2017 ground. Indeed, IMSEE, Monaco’s 2013 2014 2015 2016 2013 2014 2015 2016 MONTE-CARLO2013 20142013 20152014 20162015 2016 EXOTIQUE 20132013201420142015201520162016Larvotto 2013 2014 2015 2016 2013 2014 2015 2016 36.9% NUMBER OF SALES 6.2% Statistics Office, reported that refurbishment. However, in recent 2006-2016 37,550 0 16,100years buyers202.7 are displaying50,000 a MONACO in Number2016 ofnot residents, one new Numberresidential of Number of Hectares Number of commuters FONTVIEILLE FONTVIEILLE LES MONEGHETTIFONTVIEILLE LESFONTVIEILLE MONEGHETTI LES MONEGHETTI Dec 2016 residential units millionairesgreater(size propensity of Monaco) tothat undertake travel into 60 200 200 60 60 200 200 60 HONG KONG property was completed. This is MONACO-VILLE LA ROUSSE completed in 2016 in 2026 Monaco each day50 50 % 50 Avenue 50 this work as the lack of supply 150 150 2.6% 23.7 150 Princesse 150 NEW YORK likely to put further pressure on 40 40 40 Grace 40 starts to pinch. Many of these LES MONEGHETTI LARVOTTO LONDON prices in the short to medium term. 30 100 100 30 8.9% 2.1% 30 100 100 30 buyers are long-established 20 20 20 20 GENEVA 50 50 50 50 10 10 10 Monte 10 SHANGHAI The tail end of 2016 saw sales 0 0 0 0 0 Carlo0 0 0 2013 2014 2015 2016 2013 2014 2015 2016 2013 20142013 20152014 20162015 2016 20132013201420142015201520162016 2013 2014 2015 2016 2013 2014 2015 2016 SINGAPORE activity soften; however, Macron’s How strongly do you agree that VIENNA victory in May 2017 brought with it the following are threats to your UHNW clients’ ability to create and JARDIN EXOTIQUE JARDIN EXOTIQUE MONACO-VILLEJARDIN EXOTIQUE Carré d’Or CasinoMONACO-VILLEJARDIN EXOTIQUE MONACO-VILLE MONACO-VILLE PARIS a new sense of optimism. maintain wealth? 60 200 France200 60 Les 30 200 200 30 SYDNEY 50 50 Moneghetti 25 25 For Monaco, the flow of wealth 150 150 150 150 ZURICH POLITICAL 40 40 20 20 across its borders is as much to UNCERTAINTY 30 100 100 30 15 100 100 15 BEIJING do with the ebb and flow of foreign 20 20 Port Hercule 10 10 POTENTIAL FALL 50 50 50 50 LOS ANGELES 10 10 Ilot Pasteur La Condamine 5 5 IN ASSET VALUES project government’s tax and economic 0 0 0 0 0 0 0 0 MIAMI Jardin Exotique policy as it is to do with the 2013 2014 2015 2016 2013 2014 2015 2016 2013 20142013 20152014 20162015 2016 20132013201420142015201520162016 2013 2014 2015 2016 2013 2014 2015 2016 BERLIN RISING TAXES longstanding appeal of the Principality. Monaco Ville VANCOUVER LA ROUSSE LA ROUSSE MONTE-CARLOLA ROUSSE MONTE-CARLOLA ROUSSE MONTE-CARLO MONTE-CARLO TIGHTER CONTROLS Louis II Port of TOKYO ON MOVEMENT 200 200 200 200 Stadium Fontvieille 200200 200 200 According to our survey of almost OF CAPITAL MUMBAI 150 150 150 150 150150 150 150 900 of the world’s leading private Fontvieille Le Portier project (reclaimed land) MELBOURNE RISING INTEREST bankers and wealth advisors, RATES 100 100 100 100 100100 100 100 ISTANBUL 50 50 50 50 50 50 50 50 political uncertainty is considered Heliport 0 10 20 30 40 50 60 GLOBAL AVERAGE EUROPE the greatest threat amongst UHNWIs 0 0 0 0 0 0 0 0 € per sq m (000’s) 2013 2014 2015 2016 2013 2014 2015 2016 2013 20142013 20152014 20162015 2016 20132013 20142014 20152015 20162016 2013 2014 2015 2016 2013 2014 2015 2016 – both globally and in Europe – -40% -20% 0% 20% 40% Knight Frank Research / Douglas Elliman when it comes to the creation and Attitudes Survey, The Wealth Report 2017 Knight Frank Research, IMSEE

06 Knight Frank Inside View Knight Frank Inside View 07 Buying Guide

The purchase is included in the purchase price as it is paid by the developer. procedure in Monaco Marginal additional costs may apply Thinking of buying in Monaco? Our step-by-step guide takes you according to the number of pages through some of the key considerations. in the ‘Acte de Vente’ and further costs may apply if there is financing involved. Agents fees payable by the Choosing a Notary writing. This may be in the form of seller are customarily 5% (plus 20% an offer letter or ‘Offre d’Intention Whether you’re a buyer or seller it is VAT) and those payable by the buyer d’Achat’ describing the property, 3% (plus 20% VAT). recommended to seek a Notary’s outlining the purchase price, as opinion or independent legal advice well as a lock out date by which Shares transfers of companies before entering into any form of the purchaser endeavours to move owning properties in Monaco are written agreement. Whilst the buying toward exchange. subject to a 4.5% registration tax, process is relatively straightforward, payable only once during the fiscal The preliminary document of offer the assistance of a lawyer or Notary year. If the company is a Monaco and its subsequent acceptance at the early stages of a deal is company, payment will be due when is usually signed setting out the invaluable in ensuring a smooth and the transfer is registered at the tax terms and conditions of sale. risk free transaction. There are three office. If the company is a foreign The accepted offer is considered company, payment of this tax is notarial offices in Monaco. binding and may be prepared guaranteed by the foreign company’s by property agents, but is often The Notary’s role is to ensure the Monaco tax representative. letter of the law is applied and drafted and/or reviewed by lawyers. the Notary to complete the file and It is at this point that the buyer and Anyone considering purchasing that the interests of both parties, relevant searches. The property may seller will need to instruct a Notary. a company that owns Monaco relating to the sale and purchase are be subject to pre-emptive rights property must verify that the protected. The Notary undertakes The offer letter is countersigned by to purchase by the government, in company has complied with the relevant searches and highlights the vendor accepting the price and which case the sale cannot take important factors such liens, right of the period of exclusivity the buyer place earlier than within a months’ all regulations regarding the ways and planning discrepancies, is granted in which to proceed. The time or when said rights are waived. appointment of a tax representative. as appropriate and also ensures the countersigned document binds the Moreover, the ‘Compromis’ will title is passed onto the new owner. vendor to the terms stated and also refer to conditions precedent that, Other Considerations precludes the vendor from entering unless satisfied, will allow the buyer Due to the Notary’s mandate and may decide, however, to skip the registry of deeds, together with This note is meant to provide a very into any other sale agreement to withdraw within a fixed period. impartiality, it is not uncommon ‘Compromis’ or ‘Promesse’ and go any mortgage. basic indication of the purchasing during the period of exclusivity. The conditions may concern directly to completion. process. No liability is assumed as for one notary to act for both During this period the parties obtaining financing, making physical Purchase and it is strongly recommended that parties. This is not mandatory and may meet the Notary, discuss the modifications, or planning matters to interested parties should seek the either party may select their own proposed terms and any conditions name but a few, however, financing Completion Ownership Costs representative independently. It is (Acte de Vente) appropriate local, independent legal of sale which will be summarised and planning permission are unusual Property registration tax, title important to note that having two and fiscal advice in order to structure and included within a ‘Compromis conditions precedent in Monaco. Completion of the sale takes place registration and notary fees together notaries does not increase the cost de Vente’ or a ‘Promesse de Vente’. a deal in the most efficient way. at the Notary’s office with payment are 6% if the property is purchased of the transaction as the Notaries Fulfilling conditions precedent is of the balance. Notary’s fees and by a person or a Monaco “Société will share the fees among them. Purchase Contract a requirement to allow the sale Donald Manasse Law Offices to complete. Failure to fulfil all of transfer taxes are also all due at Civile” owned by physical persons. Est-Ouest (Compromis/Promesse de Vente) this stage and costs are borne by If the property is purchased by The Offer Letter these will allow the buyer to exit the 24 Boulevard Princesse Charlotte the buyer. Once the ‘Acte de Vente’ other types of companies or (Offre d’Achat) With everything agreed, the Notary purchase with no penalties and a full Mc 98000 Monaco prepares the purchase contract refund. The ‘Compromis de Vente’ is signed, the Notary will transfer by foreign companies, it is 9%. + 37 7 93 50 29 21 Having identified the right property, or ‘Compromis de Vente’. This will is typically accompanied by a 10% the funds that would have been For new construction or new + 37 7 93 50 82 08 often the buyer will be asked to provide a completion date, typically deposit entrusted to the Notary already deposited into their account, build properties, there are 2.5% [email protected] confirm the intention to purchase in in a week to a months’ time, to allow and held in Escrow. The parties and register the new owner at the registration fees and the 20% VAT www.manasselaw.com

08 Knight Frank Inside View Knight Frank Inside View 09 Our Team

The Monaco team

The London team works closely with our local Larvotto experts in Monaco. Our local office has been carefully selected for their integrity, experience and professionalism, and speak English as well as French, Dutch, German, Italian and Russian. Avenue Princesse Grace

Le Portier Monte Carlo

Le Carré d’Or

Casino

Port Hercule

La Condamine

Jardin Exotique

Monaco Ville

Louis II Stadium Port of Fontvieille

Fontvieille

Heliport

London Monaco EDWARD DE MALLET MORGAN PVN Real Estate Investments CHRISTINE PELISSIER Head of Monaco Department Le Park Palace, 6 Impasse de la Fontaine Monaco Sales & Rentals Important Notice +44 20 7861 1553 Monte Carlo MC-98000, Monaco +33 6 07 93 72 69 [email protected] [email protected] PIETER VAN NAELTWIJCK © Knight Frank LLP 2017 – Recent Global Publications KATE EVERETT-ALLEN Owner & Director NATACHA IVANOVA This report is published for general International Research +33 6 07 93 05 36 Monaco Sales & Rentals information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, +44 20 7167 2497 [email protected] +33 6 15 61 75 23 The global perspective on prime property and investment analysis, views and projections presented in this report, no responsibility [email protected] [email protected] The FRANCOIS DE BRUYNE or liability whatsoever can be accepted by Knight Frank LLP for any THE WEALTH REPORT 2017 great loss or damage resultant from any use of, reliance on or reference to GETAWAY ASTRID RECALDIN France Sales Hot RIGHT the contents of this document. As a general report, this material does top now International PR +33 6 07 93 58 54 VIEW not necessarily represent the view of Knight Frank LLP in relation to +44 20 7861 1182 [email protected] TAKE THE easy particular properties or projects. Reproduction of this report in whole Plunge RIDER [email protected] 2017 or in part is not allowed without prior written approval of Knight Frank 11th Edition LLP to the form and content within which it appears. Knight Frank LLP Private View The Wealth Report International View is a limited liability partnership registered in England with registered 2017 2017 2017 number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names. KnightFrank.com/Publications

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