INVESTOR NOTES 'WHY IN FRANCE?'

France takes tourism seriously. It is the world's top tourism destination in terms of numbers. The French government came up with a number of investment plans two decades ago in order to enhance the development of serviced apartment- buildings , thus aiming at meeting the needs of an ever-increasing accommodation demand triggered by the growing flow of tourism. Figures just released show that during 2002 France received a record number of visitors, over 70 million, the highest figure for any country and a record number

INVESTOR NOTES 'LEASE BACKS - GUARANTEED INVESTMENT OPPORTUNITIES...'

A lease-back is an investment program where you buy a property freehold, then grant a management company a 9-year contract with the right to use it for short-term tourist rentals. In return for a lease-back contract to a management company the buyer gets major tax breaks from the French administration. You pay the asking price for an apartment less the value added tax (VAT) of 19.6 %. The net yield, fixed at the outset and usually around 5% or 6% is paid by the management company to you quarterly and is net of :

- management fees
- city tax,
- water and electricity charges,
- heating and air conditioning costs,
- furniture replacing and upkeep of the apartment as a whole.

The lease-back programs are located in the best locations in terms of capital-gain potentials and mostly on the French Riviera, in Central Paris and ski resorts.

Anyone can buy a lease-back property - there are no restrictions for non residents. In terms of returns, property price rises may seem modest against those occuring on the stock market in the short term, but when financing is used the return potential is much higher.

INVESTOR NOTES 'NO BIG AMOUNTS REQUIRED....'

Minimum investment levels are certainly higher for property than for shares. Anyone can buy a lease-back property - there are no restrictions for non residents. By using leveraging the investor can invest a relatively small amount and yet reap the gains on a large amount.

As the French banks lend 80 % of the property value over up to 20 years on a fixed rate basis, an investor can gear his own money by up to 5 times, thus multiplying his potential return by 5 times. Whilst this can also be done for other investments, property has one huge advantage as a leveraged investment; banks will lend more money for longer periods at lower interest rates for property than for almost any other asset.

This considered, even if shares or other investments do perform significantly better than property, the higher interest rates that apply to them may well cancel out any advantage. Leveraging of course involves taking out some kind of loan, and for most asssets the loan repayments are due on a monthly basis. With a property, rental income is received monthly and so can conveniently be used to service the loan. With other investments, this is seldom the case. Shares, for example, would yield income in the form of dividends usually just once or twice a year, leaving many of the repayments to come direct from the investor's own pocket. Quite often the dividends on shares can also be lower than the rents on property.

INVESTOR NOTES 'What the Côte d'Azur really is.....'

Everyone knows the French Riviera. If they haven't actually been there, they've seen it on TV or read the glossy magazines with the sandy beaches, palatial hotels, gastronomic restaurants, casinos , dream villas, maga-yachts and night-to-remember discos. They may have even admired the medieval villages in the back country and envied the happy few who actually live or stay there.

What they may not know, however, is that many of the riviera's visitors are nowadays more into business than basking in the sun. Originally the French Riviera was a winter retreat for European and Russian aristocrats fleeing from the cold, fog and damp. Then in the 20's, sunshine became acceptable and the Riviera's towns kicked into a higher gear as fashionable summer resorts. But more recently, another switch has been thrown, this time to diversify the region's activities from tourist playground to a high tech, clean industry, congress, seminar and convention centre. Today, outside the summer season, one in every two trips to the Riviera is business-related.

The high income and image value derived from national and international conventions, prestigious product launches, company incentives and news-breaking congresses for spearhead sectors such as telecommunications and information technology. Business travel to the South of France is not, however, limited to congresses and trade fairs. Over the past decade the Côte D'Azur has won recognition as a high tech hot bed, an image fuelled by the Sofia Antimolis Science and Technology Park near Antibes. The science park includes 1,200 French and foreign companies including a selection of household names and ambitious start- ups. All active in the fields of IT, microelectronics, telecommunications, computer hardware and software, mobile telephony, e-business, health care and internet-related technologies. This humming hive of grey-matter activity provides 23,000 jobs for people of many nationalities.

In Cannes, the Palais des festivals et des congrés plays host to over seventy festivals, congresses, trade fairs and cultural events. Over 400,000 conventioneers and visitors attend every year injecting some 3,5 billion French Francs into the local economy. Nice has more of a city atmosphere and is famous for its bay of angels and palm-bedecked Promenade des Anglais. The Old Town is an absolute must. Baroque churches, tiny shops and art galleries line the narrow shady streets. You can also head for the Chagall, Matisse or the Modern and Contemporary Art Museums. Once you've experienced the more glitzy offerings down on the coast, you'll be amazed at the contrast offered by the riviera's back country. Perched on Rocky promontories, the medieval strongholds of Eze, St Paul, Mougins, Biot, Tourettes are all within easy reach of the coast, offering charm of ancient stone and ramparts, narrow streets, flowery balconies and breathtaking views.