Investing in Nîmes : two options

The “French Rome” is a real melting-pot of influences, from Spain, the Camargue, the Cévennes and Provence. Located on the Avignon-Arles-Marseille-Montpellier-Perpignan axis, the capital of Le Gard plays host to 150,000 people who benefit from excellent road, rail and air connections.

Seven hills surround this City of Art and History lying between the Cévennes, Provence and the Mediterranean, and famous for its Roman buildings and bull fighting. The saga of Nîmes began at the heart of L’Ecusson in the Age of Antiquity. Two thousand years old, the Maison Carrée recalls its rich history, while today’s illustrious architect Norman Foster signed his name to the Carré d’Art, all made of glass. Nîmes is tirelessly rehabilitating its old neighbourhoods and pushing southward. Vittorio Gregotti, Kisho Kurokawa, Martial Raysse, Jean Nouvel and Jean-Michel Wilmotte have been successively invited to reflect on the town’s urban planning, while Alain Marguerit is responsible for expansion of the historic centre and development of almost 20 acres of land. After some challenging years, the local economy relies on the agro-food and nuclear industries, metrology, biotechnologies and wine production. By 2015, the town expects to accommodate from 10,000 to 12,000 students.

“The tendancy for migration to the south of France in general, and Languedoc-Roussillon in particular, has a positive effect on the investment market,” says André Lhéritier of Solvimo La Fontaine. “Especially as prices in this town on a human scale are considerably more attractive than those in Montpellier. A growing number of local people are in fact prepared to accept the daily 30-45 minute drive required to reach the prefecture of L’Hérault.” Demand focuses on two markets : many buyers are primarily interested in new properties, with an eye on tax benefits authorized by the Scellier scheme ; others, either professionals or semi-professionals, target old buildings which generate higher yields. The sale of new developments is highly competitive. Real-estate agents, developers and bankers are, in fact, engaged in a merciless struggle. Purchasers rarely attain a gross return of more than 4 % on their investments, a figure that does not, of course, take tax reductions into account. Currently Urbat is marketing “Le Liberté” down below Avenue Jean-Jaurès. This low energy development consists of apartments with 2 main rooms from 130,000 €, 3 main rooms from 192,000 €, and 4 main rooms at around 255,000 €, excluding parking places. The same developer will be proposing two other addresses during the course of 2011. An Icade residence is currently coming to the end of its commercialization, while that of a development signed Les Villégiales is just underway in the triangle around the railway station. Fans of old properties acquire and renovate an entire building, sell it off to be split into smaller units or bring it up to standard before renting out apartments. In this context, the targetted gross return on investment ranges from 7 to 10 %. However, heavy-duty restoration brings its share of surprises and requires considerable capital to be tied up over many long months. André Lhéritier points to two examples of this kind, 300 m2 each, consisting of three to five units, on offer at about 400,000 €. Given the work involved, potential takers would, however, be more inclined to invest up to 300,000 €. Once the properties have been rehabilitated, the rent can reach 9-10 €/m2 per month. "Nîmes definitely has an ace to play,” comments André Lhéritier. While preservation of the historic centre significantly reduces one’s margins for manœuver, the potential for profitability is very real.

“L’Olivier de Dhuoda”, a Russan Promotion Immobilière development, is being handled by Roman Tissot : a residence which fully meets the requirements of buyers, often from within the region, wanting to obtain extra income to supplement their pensions without spending more than 150,000 €, on a 1-bedroom apartment likely to generate 10-12 €/m2 per month, with a ceiling of 15.10 € set by the Scellier Act. An abrupt brake could be applied to this market as from December 31st, 2010, a date marking a lowering of tax advantages provided by the scheme. During the “Salon de l’Immobilier” held in Nîmes, the 22 low energy apartments nevertheless brought in 45 enquiries, thanks to a very low launch price for a new development, to the tune of 85,000 € for a 1-room apartment of 35 m2. In order to sell older buildings more easily, some owners would be well-advised to split them into apartments. Advice which was followed less than two months ago by a client of Tissot Immobilier, which sold four 1-bedroom apartments, already occupied, at an average price of 80,000 € each, to 30 year-olds manifesting no interest in the possibility of tax advantages. Nowadays, it is rare, exceptional even, to obtain 10 % gross on the residential market, much less when it comes to the cheapest commercial or business premises. A property of 193 m2, accommodating an institutional tenant for a monthly rent of 2,700 €, is currently worth 250,000 €.

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