What is leaseback
What does leaseback mean?
Investors buy the freehold of a property outright but lease it back to a management company who specialise in the tourist management, maintenance and rental of these properties for a minimum 9-year period. In return owners receive a guaranteed annual return, irrespective of occupancy of the property, NET of all communal charges, maintenance and running costs.
Pierre & Vacances are uniquely and very importantly the developers and the managers of the properties they sell, with 6.6 million clients staying in their 200+ residences in 6 European countries each year so have a very clear vested interest in the quality construction, location and ongoing maintenance of the properties.
Why was leaseback introduced?
In the late 1960s, following the increasingly large number of tourists visiting France which continues today as the most visited country in the world, the French government recognised the need to encourage investment in the construction of tourist residences, and offered an incentive to investors by refunding the VAT on the purchase price of properties built for leaseback purposes.
Pierre & Vacances were the pioneers of the leaseback concept with the creation of the fist car-free ski resort in Avoriaz in 1967.