Day: 28 May 2020

SBM revenue was up 18% last financial year, placing Monaco’s largest employer in a strong position to battle repercussions of the Covid-19 health crisis. Nonetheless, the group acknowledges a “substantial deterioration” in next year’s financial performance.
During a digital press conference joined by Monaco Life on Thursday evening, Société des Bains de Mer (SBM) President Jean-Luc Biamonti presented the results of the 2019-2020 annual report ending March 2020, and the SBM’s positive results for the second consecutive year.
He revealed that Société des Bains de Mer and its subsidiaries generated revenue of €619.8 million for the entire financial year 2019/2020 compared to €526.5 million in 2018/2019 – an improvement of 18%.
“This €93.3 million increase in turnover is the result of an improvement in revenues in all business sectors, recorded continuously throughout the financial year until the end of February,” said Mr Biamonti. “The last month of the fiscal year, however, was strongly impacted by the consequences of the Covid-19 epidemic.”
All of SBM’s casinos and restaurants were closed in mid-March when Prince Albert ordered the lockdown, followed by the Hermitage Hotel and the Méridien Beach Plaza. Only the Hôtel de Paris and the Monte-Carlo Bay Hotel and Resort remained partially open to accommodate customers, particularly permanent residents, but occupancy remained low.
It is estimated that SBM lost €15 million in turnover in the last month of the 2019/2020 financial year due to the impact of the pandemic.

Gaming
The gaming sector reported revenue of €239.8 million, compared with €222.7 million in 2018/2019. This growth was largely due to improved revenue from slot machines, which rose by 11% to €113.0 million for the financial year as a whole. Revenue from table games also rose by 5%.
Hotels
Hotel revenue was €284.3 million, compared with €253.7 million in 2018/2019. The increase has been attributed to the full opening of the Hôtel de Paris and the success of Coya.
Rents
This area saw the most significant increase in revenue for SBM, mainly due to the leasing out of new spaces at the Hôtel de Paris and in the One Monte-Carlo complex, and the gradual take-up of residential leases at the One Monte-Carlo complex.
The rental sector therefore reported revenue of €96 million, compared with €51.9 million previously.
Operating result
As a result of strong rental revenue, SBM Group was able to achieve an operating profit of €22.6 million, compared to an operating loss of -€9.6 million during the previous financial year.
Net income
Net consolidated profit was €26.1 million, compared with a profit of €2.6 million for the fiscal year 2018/2019, an improvement of €23.5 million.
In terms of financial structure, shareholder’s equity amounted to €649.4 million as at 31st March 2020, compared with €622.3 million at the end of the previous fiscal year.
Impacts of the Covid-19 epidemic
Mr Biamonti acknowledged that the Covid-19 pandemic has had a severe impact on the SBM Group’s business with the forced closure of most of its public establishments. However, the Group was able to retain most of its revenue from commercial and residential rental activities. “This serves to confirm that the diversification strategy adopted in recent years, to develop the Group’s real estate assets and rental business, was indeed justified,” said the SBM president.
But April to September is generally the strongest time of year in terms of business, so the Group expects a substantial deterioration in financial performance next financial year.
Mr Biamonti acknowledged that, given the rapidly evolving nature of the situation and the lack of visibility of the epidemic’s effects on its activities, SBM is not yet able to foresee the exact scale of this impact.
 
 
 
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The number of high-value property sales – those over €10 million – more than doubled in 2019 as Monaco maintained its position as the most expensive luxury residential market in the world.
A report by Savills released Wednesday, titled ‘Spotlight: Monaco’, shows that demand for real estate of all types has remained high in the Principality.
According to Savills, the average sale price in Monaco last year was €48,151 per square metre, a 1.3% drop on 2018. However, this small fall follows an exceptional rise of 18.1% in 2018 as prices reached a high plateau.
Transaction volumes also fell, by 12% in 2019 versus 2018, driven by an 18% decline in sales of properties priced under €5 million. According to the report, this decline was caused by a drop in the number of one- and two-bedroom properties available for sale in comparison to 2018.
On the other end of the scale, sales of properties above €10 million increased exceptionally by 64% in 2019 compared to 2018. The increase in the number of high-value property sales has been partly attributed to an uptick in the volume of villas being sold, often for redevelopment, and Monaco’s continued status as a premier location to live and invest.
Meanwhile, transaction volumes across the Principality fell from 523 in 2018 to 462 in 2019. “Due to a lack of new build supply, the number of new build transactions fell 54%, significantly contributing to the overall decline in sales numbers,” reads the report. “Transactions of re-sale properties also saw a small fall as fewer properties were brought to the market.”
According to the report, the number of new build properties sold in Monaco remains restricted, with an average of 27 new build properties sold per year over the last decade, accounting for 7% of all sales.
“The residential property market remains the most expensive in the world and supply of new property is scarce,” said Irene Luke, Partner at Savills Monaco. “There are a number of new developments in the pipeline, such as the ambitious land reclamation project, Portier Cove, although these schemes are only expected to make a dent in the supply shortage.”
The rental market
Monaco also ranks as the most expensive location in which to rent residential property globally with an average rent of €126 per square metre per month. This is 60% higher than New York, the second most expensive location in the Savills World Cities Index.
Over the year to February 2020, rental values in Monaco increased 20% across all property types. This was reportedly driven by a large increase in the rental values of 4+ bedroom properties, such as One Monte Carlo, which was delivered in 2019.
Global position
Hong Kong ranks second in the world for most expensive residential market, with an average price of €44,700 per square metre. Savills notes in its report that both Monaco and Hong Kong are constrained by available space and are bolstered by their global reputations.
Luxury residential properties in New York, the third most expensive market in the world, cost nearly half as much as Monaco, with average price per square meter standing at €24,300.
“Looking to the year ahead, while the economic impact of Covid-19 is still largely unknown, the residential market in Monaco is well placed to weather the storm of any economic downturn,” Sophie Chick, head of Savills world research, said in the report.
 
Top photo: The pastel-pink villa known as Villa Echauguette was listed in Monaco in early 2019 for the record price of 110 million euros by Sotheby’s
 
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