French Villa Leoploda sold for highest ever $750 million

News reports of a $750 million (€500 million) purchase of a French Villa Leopolda by a mysterious Russian Billionaire is all over the news. Villa Leopolda was built in 1902, ordered by the King of Belgium, Leopold II.

The qouted price sounds very astonishing as the prices on the French Riviera are not as high as this one. However, it may be true as the Russians have been known since the 1990's to be purchasing properties in Europe at astounding prices. They have amassed wealth because of the oil resource of the country.

According to Forbes, there are 87 Russian billionaires, hence the fierce competition to lap up good properties. Moreover, properties in the range of $6o million to $150 million are very few. Real Estate brokers say that with the economy of Russia surging, the demand for property by Russian Oligarchs is mindblowing. But to escalate price far beyond going rates speaks more to Russian buyers' efforts to brand themselves and the vanity associated with owning the most expensive home in the world. Buying real estate in the Med has become a favorite strategy for Russians trying to find a place to stash their commodities cash.

What makes this particular villa--built with spoils of Belgian pillaging in Africa under Leopold II-- particularly desirable are its 20 acres of land. This is something impossible to find on the Riviera without combining properties. Even so, the premium doesn't really add up given that no sale in the south of France, or the rest of the world, has come remotely close to that sum.

History

That Villa Leopolda has commanded this price, should'nt be too much of a surprise, since the property has been the site of over exuberance before. In 2005 and 2006, Bill Gates was rumored to have paid $110 million for the property in what would have been a French record at the time--but the transfer never occurred. Of course billionaires have to just scratch to shell out $750 million, taking Mukesh Ambani's Antilia quoted at $2 billion!!

In the gossip-filled circle of high-end real estate, Russian tycoon Roman Abramovich was originally rumored as the buyer, though he has denied it. The rumor was difficult to believe as it was only last week that the Chelsea Football Club owner received permission from Kensington and Chelsea council to build his own $285 million dream home in that section of London. He's only worth $23 billion after all.

EMI Calculation

Of course the property would be paid in cash. But just for fun, imagine the property being financed by the bank. Say 80% financing is done by the bank at 13% interest for 3o years. So of $750 million, $600 mn is financed by the bank. The payment per month would equal 6,637,197. Yes, a month!

So the yearly payment would be 79,646,364 and the total payment in 30 years would amount to 2,389,390,920, i.e, $2.3 billion. Woaaah!! Thats even more than what Mukesh Ambani's Antilia stands to command on completion. Proves to pay $750 million in cash today than pay $2.3 billion.

And buying the place is the easy part. The Russian buyer also will have to factor in the cost of the 50 full-time gardeners, the household staff, pool cleaners and the requisite supplies of champagne and caviar.