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