Prince Albert II of Monaco: “We have 139 nationalities living on two km2”

Take a stroll through the streets of Monaco and the tiny principality of only two square kilometers seems packed.

Traffic – a constant gripe among locals – has almost come to a standstill, with roads closed for the Grand Prix. There’s barely room to be seen among the apartment buildings that rise from the coast to the French border in the hills – yet the din of construction sites is an audible reminder of Monaco’s urgent need to put updating its mostly 1960s housing stock and building new homes for a growing population.

Prince Albert II of Monaco stands in the gardens of his palace, gazing at sweeping views of the country he ruled for 17 years since the death of his father, Prince Rainier III. As he prepares to welcome around 20 world heads of state for the main event of Formula 1, he tells me about the challenges facing Monaco.

Famously described by Somerset Maugham as a “sunny place for sleazy people”, Monaco has a reputation as a tax haven for absentee billionaires and a playground for the super-rich for bling. Albert’s mission has always been to change perceptions, he says. “I’ve been trying to make Monaco more attractive since I took over from my father. I cannot accept that Monaco is on a black or gray list,” he says in his soft voice with an American accent, a legacy of his university years spent in Massachusetts.

Prince Albert II of Monaco: “I have been trying to make Monaco more attractive since I took over from my father” © Gaetan LUCI Palais Princier

Monaco was removed from the OECD’s “grey list” of uncooperative tax havens in 2009. And in 2016, Prince Albert signed a tax transparency agreement with the EU, agreeing to exchange account information banking for residents from 2018. plan with the financial department. Any financial institution must comply with these rules and regulations. It took time, of course,” he says.

Monaco still flies under the radar in some areas; the country does not appear, for example, in Transparency International’s annual Corruption Perceptions Index, the results of which are based on 13 independent global data sources. This “does not mean that there is no corruption, only that there is not enough data available to accurately measure levels of corruption,” says Shubham Kaushik of Transparency International.

However, since the start of the war in Ukraine – which Prince Albert publicly condemned at the end of February – part of Monaco’s Russian population has been under the spotlight. Of the 749 Russian residents of Monaco, the prince claims that “only a handful” are on the list of oligarchs subject to sanctions, “and of course they were dealt with immediately”, he adds. “Those who had bank accounts here, they were frozen. »

He mentions a Russian yacht owner who left Monaco. He won’t specify names, but the only reported case is retail billionaire Sergei Galitsky, whose name is not on the EU sanction list but whose $250 million superyacht Quantum Blue was temporarily seized in Monaco’s Port Hercule in March and later seen heading up the Suez Canal.

Carlos Sainz (55) driving the Ferrari and Max Verstappen (1) driving the Honda Oracle Red Bull Racing RB18 during the Monaco F1 Grand Prix

The Monaco F1 Grand Prix on May 29 © Hollandse Hoogte/Shutterstock

“The only other [Russian who has left] is Mr. Usmanov, who comes in the summer. His yacht was seized in Germany. His helicopters were also seized,” the prince said, referring to Alisher Usmanov, owner of the world’s largest yacht, Dilbar, which includes two helipads.

Has Monaco turned a blind eye to the money of Russian oligarchs for too long? “Everyone seems to be focused on us because of our Russian residents. Many others have homes along the Cote d’Azur. There are plenty of them in the UK too,” he counters. “In the past, it was considered acceptable to accept Russian money. The focus is [for Monaco] to try to attract other nationalities.

With 139 nationalities already resident in Monaco, he can make his choice. Monaco’s appeal doesn’t seem to be shaken by the controversy, and the world’s wealthy are still clamoring to take advantage of its low taxes. Real estate agency Knight Frank predicts that the number of Monegasque residents with a net worth (including their primary residence) of more than $30 million will increase by 23% over the next four years. The number of dollar millionaires in Monaco will increase by 43%.

Edward de Mallet Morgan, head of Knight Frank’s global super premium residences team, says the rising cost of living is adding to Monaco’s appeal. “Taxation is usually the number one reason people want to move to Monaco,” he says. “With the cost of living rising, they think it’s a good time to sell their businesses and invest in one of the most expensive real estate markets in the world, without inheritance, capital gains or property tax. Income. They will live there for 20 years and then sell.

Bay House, showing the terrace facade overlooking the bay

Bay House, the luxury component of Testimonio II, a development scheduled for completion in 2024

Finding homes for all of them is a struggle – hence the cranes. And the increased development has caused problems. Locals feel Monaco is going through ‘a pretty aggressive and disruptive transformation as it accelerates its expansion to accommodate a UHNW [ultra high-net worth] community,” says de Mallet Morgan. But such is the appeal of Monaco, they just need to build more: a €2 billion land reclamation project is creating Mareterra, a new six-hectare area off the coast between Monte Carlo and Larvotto.

It’s not just the super-rich who face a housing shortage in Monaco. Prince Albert is also trying to increase the supply of affordable rental accommodation for Monegasques – a protected group who make up a quarter of the population of 39,000 and are guaranteed housing and employment. Its 15-year National Housing Plan for Monegasques, launched in 2019, will increase the number of state-owned apartments by 43% to 4,548 units in total. About 600 will be built in the coming year.

Monegasques pay a third of market rent, so a 3-bedroom apartment costs around €1,800 per month. But put into perspective, while Monaco’s GDP per capita is €172,000, heavily skewed by its super-rich residents, the average teacher salary is €3,360 per month.

When completed, Mareterra will increase Monaco’s land mass by 3%, but it will not solve the social housing shortage. Instead, it’s proving a magnet for those with over €45m to spend on three-bedroom apartments or €150m and more on a villa. Most of the properties have been sold, still two years after completion.

Prince Albert hopes Mareterra will be seen as “as environmentally friendly a concept as possible, proving that land reclamation can be environmentally friendly”. He says he has been an ardent conservationist since witnessing the effects of climate change on a visit to the North Pole in 2006, tracing the route of his pioneering great-great-grandfather Albert I a century previously.

Monte Carlo Beach Club, August 1970

Monte Carlo Beach Club, August 1970 © Slim Aarons/Hulton Archive/Getty Images

It aims to make Monaco carbon neutral by 2050. It is also becoming increasingly electric, from garbage trucks to shuttles, saying 40% of cars registered there last year were electric. He fears, he says, that the war in Ukraine has diverted government attention and spending from environmental concerns to defense. “It’s at the expense of sustainable clean energy growth,” he says.

Land reclamation – as his father showed could be done in the 1970s with the Fontvieille district – buys time and space in Monaco for now. “But technologically, there is a limit. The further you go, the deeper it is. We’re not like Hong Kong with its airport expanding into just 10 feet of water. We have depths of 80 to 90 feet or more,” he adds.

Monaco is still exploring ways to manage its mountainous terrain; tunnels, public lifts and sidewalk escalators are all part of getting from A to B. But the future of the principality inevitably lies in building not just in the sea, but upwards. Tour Odéon – a 49-story residential tower developed by the Marzocco Group with 62 luxury apartments and 157 state-owned apartments – dominates the skyline.

When completed in 2015, it broke global price records, including the 3,500m² sky penthouse, “which, at around 400 million euros, was probably the most expensive residential single-family home for sale. in the world,” says de Mallet Morgan. . Now that it’s let, “it’s probably the most expensive residential rental in the world and will probably cost the current tenant several million euros a year,” he adds.

To ensure the future of the principality, it will be necessary to build not only in the sea with a landfill, but also upwards © Getty Images

Marzocco’s latest project, Testimonio II, due for completion at the end of 2024, is, according to its developers, the largest in Monaco in terms of built-up area. On its improbably narrow and steep site next to the French border, with a river flowing below, this density is achieved by building 30 stories high (in two towers that will house 348 state apartments) and excavating 13 floors for underground public and private parking.

Its Monegasque architect Alexandre Giraldi and the American company Arquitectonica have also been inventive with Bay House, the luxury component of the program, given that the very wealthy foreign families who settle in Monaco expect much more space. than its housing stock generally offers. On the ground floor is the relocated International School of Monaco. Above are 56 apartments from 17.5 million euros. And in addition to these, which is most likely a first in Europe – certainly for Monaco – five rooftop villas of up to 2,500m² each, priced in excess of 100 million euros.

The Prince also has ambitions to make Monaco a “smart principality”, which involves giving sectors such as health, education and transport a major technological boost. This was not without controversy, however. With many countries expressing concern — or actively banning — Huawei’s involvement in its 5G networks, Prince Albert hosted Chinese President Xi Jinping in 2019 after striking a deal with the Chinese tech company to develop the network without son of Monaco.

For now, the Prince’s challenges look like a series of balances: marrying Monaco’s expansion with its environmental concerns; and not to undermine the country’s appeal to the super-rich, while enhancing transparency. “In everything we do, we try to balance and create the best mix possible for our residents and for Monegasques and to be able to live peacefully”, he specifies. “If we managed to sustain 139 nationalities peacefully in two square kilometres, then I hope we did quite well. »

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