» Overseas Property: The next Barcelona?

Overseas Property: The next Barcelona?

There’s a definite buzz around Palma, capital of Mallorca, as property-hunters scour the narrow streets for homes that combine Mediterranean tradition and city sophistication. But the bargains are disappearing fast, warns Karen Robinson

Jan and Andy Pratt are looking for a Mallorcan home. It won’t be their first property on the island, but this time they are turning their backs on golf villas, seaside developments and farmhouses, and looking in the capital city, Palma. “We’ve done swimming pools and barking dogs and rural,” says Jan. “We want to go out to dinner and walk home.”

They’d better get a move on. Resale property prices in the Mediterranean port city — where the officially registered population of 380,000 is boosted by transient boat crews and tourism workers — rose by more than 10% last year, according to Mark Stucklin of Spanish Property Insight. “It’s a mini-Barcelona in the Balearics,” he says. “Design-conscious, urban and funky.”

There is a buzz around Palma at the moment, and it’s not just to do with rising property prices. Boutique hotels such as Tres and Puro, built round ancient courtyards in the Old Town, attract a hip northern European crowd. The dramatic new Es Baluard Museum of Modern and Contemporary Art is a striking gesture of cultural self-confidence.

Civic pride and resourcefulness are in evidence not only in the use of the Mallorquin language alongside Spanish, and the fiestas that throng the streets throughout the year, but also in the miles of new seafront cycle tracks and innovative rubbish disposal arrangements. Whiffy old street-corner communal dumpsters have been replaced by gleaming gold bins that whisk the trash away via a subterranean vacuum system.

The Pratts, who have established Shortcuts, a property-search service for British buyers, in the seven years since they moved to Mallorca, have been keeping a close eye on Palma. The current hot spots, says Andy, are the gothic quarter near the cathedral, the Old Town and the area between La Rambla and the Avinguda Jaume III.

The beachfront fishermen’s cottages of Portixol, a 15-minute walk to the east of the cathedral, which sold for less than £50,000 six years ago, are now valued at £200,000. And the next area to see similarly impressive price rises, he predicts, will be El Terreno, the city’s gay neighbourhood.

The Pratts are focusing their search on Santa Catalina, around the covered food market, as Andy has “heard on the grapevine that there are plans to pedestrianise some of it and make it more Covent Garden-like”.

“We’re prepared to pay €300,000 to €350,000 (£210,000 to £250,000) and spend another €200,000 (£140,000) — and it would have to be structurally decent for that,” says Jan. And she wants some external space. “Outdoor living is very important here. I want a roof terrace to dine out on.” That will add to the price.

There’s no hard-and-fast rule, says Andy, but they should expect to pay at least £35,000 more than for a property with no access to a terrace or courtyard.

Jan Westwood of The Property Finders, another company that helps source Mallorcan property, agrees: “In the city, most people want light — and the higher and lighter an apartment is, the more expensive it is.”

There is a quiet, dignified, prosperous atmosphere of old Mallorca in San Jaume’s warren of classical facades and dark churches, where the neighbourhood coffee bar seems unchanged since the 19th century, but little light penetrates the apartments on the lower floors, where prices leap from £1,765 to £2,200 per sq m without outdoor space, to £3,170 to £3,500 per sq m when the flat has a terrace.

So buyers seduced by the urban lifestyle on a quiet winter day may find themselves in an airless dark flat with no access to the sunshine outside. Traffic and street noise — still audible from quite high up in some areas — are also a problem, except, perhaps, in August, when the city gets very hot and, apart from the tourist bars and cafes, more or less shuts down.

Sea views and off-street parking also bump up the price. “Parking spaces rent at €100 to €150 (£70 to £105) a month, so it’s a good investment to own one,” says Andy Pratt.

But do you get enough for your money in Palma? You could buy a two-bedroom town house in the Old Town with a 10sq m terrace. Or for the same money you could get a new two-bedroom apartment with an 18sq m terrace and shared pool in the gated community of Sa Vinya, about 20 minutes west of the city. And you’d have your own parking space.

However, the fact that Palma living need not involve a car at all is what attracts some buyers. Julia and Tony Sharpe from Armathwaite in Cumbria like the idea that the airport is a 15-minute cab ride from the city centre. “Palma has a casual but sophisticated feel,” says Julia. “We’re thinking we’ll get a foot on the ladder now.” Their budget is £200,000, for which they expect to get a two-bedroom apartment.

Four years ago Sharon Matthews-Jolly and her husband, Keith Matthews, from Solihull, paid £220,000 for a three-bedroom apartment with roof terrace overlooking the smart Placa Cort. They have invested another £50,000 in a new kitchen, bathrooms and flooring, and spend the summers there with their children, decamping every day to the beach and tennis club at Puerto Portals.

Palma is accessible year-round from all over Britain. The Sharpes can get scheduled flights from Newcastle, Manchester or Glasgow. On their last trip, in November, they paid £47 return each from Newcastle. Julia reckons she can even run her business — printing original artwork and photographs onto canvas — from Mallorca. In fact, she managed to sell two pictures over her mobile phone to a customer who rang just as she was emerging, laden with booty, from an expedition to the fashion mecca of Zara on the Passeig des Born.

Pascua Ortega, one of Spain’s top interior designers, is part of the team converting the Palacio de la Portella near the cathedral into five apartments with underground parking. He will oversee the internal layouts, converting the building’s high-ceilinged salons — which have views across the city wall to the Bay of Palma — into flexible living space and retaining as many of the original beams and carved wooden doors as possible.

The 196sq m penthouse has already been optioned at £1,060,500 and the other apartments start at £760,000 for 154sq m through Kühn & Partner.

All over Palma, old buildings are being snapped up. One company is even advertising “lofts” in one project just off the Born. A British buyer who last year bought the three-bedroom duplex with roof terrace from a developer in the Old Town will have spent £530,000 by the time it is all fitted out. “If the developer was starting out now it would be €150,000 (£106,000) more because the price of buildings to do up is going up,” says Alexandra Vanoli of Kühn & Partner.

“When I started in business here, Palma was not very interesting,” says Matthias Kühn, a German who founded his eponymous agency, now one of the island’s biggest, 18 years ago. “Over the past few years it has changed dramatically. You can still get old houses in Palma, though you will pay at least €1,500 (£1,060) per sq m before you start to do them up. But I think it would be a good investment because the supply is limited.”

“I love the architecture and the way of life,” says Matthews-Jolly, who plans to live in her apartment full-time once her children have left home. “I think Palma is the best-kept secret in Mallorca.”

Shortcuts, 00 34 971 434 595, www.shortcutsmallorca.com; Spanish Property Insight, 00 34 687 721 131, www.spanishpropertyinsight.com; Savills, 020 7824 9030, www.savills.co.uk; Kühn & Partner,00 34 971 228 020, www.kuhn-partner.com; The Property Finders, 00 34 971 233 207, www.thepropertyfinders.com; Euro Palma Property Management, 00 34 971 713 205, www.euro-palma.com

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