St Moritz: Mount Billionaire!
Beat Ernie - Fri 06 Oct, 2006
...Im pretty sure you know St Moritz, the small Swiss place that within the last few decades has been turned from a poor farming village to a sophisticated skiing paradise...The scenery with its mountains, lakes, ice and snow is simply beautiful and contributes to the extravagant property prices...The Winter seasons in St Moritz are shrill, chic and most importantly, very pricey. The message is obvious: coterie - small investors not wanted...
I’m pretty sure you know St Moritz, the small Swiss place that within the last few decades has been turned from a poor farming village to a sophisticated skiing paradise.
The peak season in St Moritz begins in January. Nouveau riche Russians land in their private jets on the nearby airport Samedan, English and German aristocrats backtrack to comfortable chalets in the mountains, and suntanned Italian industrialists saunter through the streets.
For several weeks almost all the chat between the real and sometimes not-so-real millionaires seem to turn to elementary questions of life, like "Who is the richest guy on the ski run?", "Who owns the most expensive house?" and last but not least "Who is drinking the most expensive champagne?".
St Moritz: Small investors not wanted!
The Winter seasons in St Moritz are shrill, chic and most importantly, very pricey. The message is obvious: coterie – small investors not wanted.
If you talk to locals, you can hear stories about Russians who show no sense of decency in hotels, boutiques and on the ski runs. This is a little at odds with our Swiss way of being rather reserved.
Russians often spend packets of money on champagne, caviar, and vodka in near record time. In January this year alone more than 70 Russian jets arrived in Samedan! The effects of rising commodity prices clearly affect luxury tourism. Given the fact that the citizens of St Moritz profit exceedingly from the generous Russians, it doesn’t surprise me that the relationship between guests and hosts has improved recently.
A few days ago, I went on a business trip to St Moritz and almost couldn’t believe my eyes. In summer, the location’s appearance changes totally. People build, renovate and reconstruct all over the place to prepare themselves for the next winter. For several months, St Moritz turns back into the former alpine village, a Mecca of workmen and hikers. The atmosphere is much more enjoyable and guests who want to relax a few days in classy St Moritz can save a pretty penny during the summer months. Last minute rooms are sometimes offered at just 10-20 percent of winter prices.
St Moritz: The value of a small car!
Every year between December and January, the room prices of legendary grand hotels Suvretta House (www.suvrettahouse.com) or Badrutts Palace
(www.badruttspalace.com) rise to staggering highs. A simple double room in Badrutts Palace costs 1,250 CHF (530 GBP) per night over Christmas, and on top of that you have to stay for at least 12 days. That works out as the value of a small car!
If you prefer a more comfortable room, you have to dig even deeper into your pocket. The Engadin suite of Badrutts Palace costs 12,500 CHF (5,300 GBP) per night during the main season, resulting in a total bill of 150,000 CHF (63,600 GPB) for the minimum stay of 12 days. It’s no wonder that such rooms are primarily booked by Russian oil multis, Indian steel maharajas or American film stars.
After having explored distant regions of the world during the last few weeks, I’d like to present you an unusual speciality investment today with which you can invest a small amount of money in the most expensive mountain on earth.
The Suvretta hillside – where the Suvretta House hotel of billionaire Urs Schwarzenbach is based too – is also known as "Billionaire Mountain". You’ll probably find no other place worldwide where so many millionaires and billionaires live next to each other for several weeks each year.
The list of famous families who own a house there is long: Agnelli, Niarchos, Heineken, Fürstenbergs...additionally loads of fresh money. There are impressive mansions and huge Chalets all over the place, though a lot of them can hardly be seen from public streets.
St Moritz: Property
The scenery with its mountains, lakes, ice and snow is simply beautiful and contributes to the extravagant property prices. Properties in prime locations normally change hands for at least 10,000 CHF (4,235 GBP) per square metre! Mind you, that’s only half as much as you have to pay in Monaco.
Nevertheless there is a chance for ordinary mortals to invest directly into the Suvretta hillside. The small chair lift which hovers over the well-kept front gardens of the super rich is owned by the Suvretta-Piz Nair AG. Shares of the company are traded off-market in Switzerland (ISIN CH0002415351) and the annual general meeting takes place in the exclusive Suvretta House hotel. By all accounts, some very rich and prominent residents of Suvretta are shareholders of the company too.
From a fundamental point of view, an investment in the chair lift doesn’t seem to make good economic sense – and I’m not making a recommendation here as I haven’t done the groundwork. But maybe during a ride on the chair lift, steel baron Lakshmi Mittal will tell you his next take over target. In that case, the investment in that offbeat company would already have given you good returns...
With this in mind, take care...
Beat Erni
for the Daily Reckoning
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