While Americans flip McMansions, Europeans are splitting dream villas into shares

When France imposed a strict nationwide COVID-19 lockdown in spring last year, Kevin Delphin and his wife holed up in their cramped rental apartment in Paris for weeks, working from home and fantasizing about how to change their lives.

Finally, Delphin plonked down a chunk of his savings on a 2,500-square-foot house with a 5,000-square-foot garden in Auvers-sur-Oise, the village 15 miles from the French capital where Vincent van Gogh ended his life more than a century ago. “I was a real Parisian,” he said, standing in his garden. “But the pandemic changed my perspective.”

Delphin, a 35-year-old tech salesman, is not alone. Months of lockdowns and remote work have spawned a crop of new startups, in both the U.S. and France, which group together stir-crazy homebuyers who long to own properties they would probably never afford on their own.

After Zillow’s former CEO Spencer Rascoff launched Pacaso last October, offering shares in luxury homes in locations like Santa Barbara and Malibu, Calif., European investors quickly took note. They saw potential across the Atlantic, where millions of young professionals were squeezed into small urban spaces in high-priced European cities. France’s official statistics agency INSEE estimated there were about 3.6 million second-home sales in the country in 2020—a record number—but for many, the prices remain far out of reach.

“Our job is to look at every opportunity and do deep dives when we see a new market segment rising,” said Mathias Flattin, managing partner of the property-tech fund of Axeleo Capital, a venture capital firm in Paris. “When we heard about Pacaso, we thought it could work here.”

So too did several others. Flattin says about eight teams of European entrepreneurs have floated ideas for Pacaso-style startups over the past year. Having researched each one, Flattin’s fund put €1.75 million (about $2 million) in seed money into Prello, a Paris startup that launched last month; Flattin’s fund plans to build up the company over the months ahead.

Prello house in Aix-en-Provence, France.

Much like Pacaso, Prello offers small groups of people—almost all of them strangers who have never met—the chance to buy a share of properties, many of them lavish. The company estimates that owners use their second homes only about 44 days a year—about one-eighth of the time. Based on that, each Prello property is split into a maximum of eight shares with an average buy-in price of about €200,000, making it possible for people to afford a luxury property worth about €1.6 million.

“There is a real mismatch between people’s real budget and what they want,” Prello cofounder and CEO Ludovic de Jouvancourt said. “They see Prello as a good opportunity.”

One of those people was Kevin Delphin.

Delphin says that after buying his home on the outskirts of Paris last year, he realized that he still longed to own a piece of the South of France, whose Provence coastline is dotted with stratospherically priced properties. “My dream was to have a villa with a swimming pool,” he said. With a monthly salary of €6,000 ($7,000), Delphin says it seemed destined to remain a fantasy.

Then Delphin spotted a news article about Prello’s launch, and clicked on the company’s website.

There it was: his dream villa, a four-bedroom house with a large swimming pool and lush garden, set in the hills above Nice.

Delphin took out a bank loan and bought two of the property’s eight shares for a total of €500,000 ($579,000)—sight unseen. That gives him 88 days, or three months a year, in which he has sole use of the house. Delphin envisions listing it on Airbnb during weeks he cannot get there, or renting it out to friends—perhaps even making back the loan some years. Is the house a good long-term investment? “I cannot count on it,” he said. “But this is not really an investment. This time it is for pleasure.”

Far different from time-shares, which took off in the U.S., Europe, and elsewhere during the 1980s and 1990s, companies like Prello tightly limit the numbers of buyers for each property, and once those buyers have purchased their share, they own it outright, able to sell it at any time.

Provence is dotted with spectacular properties—at stratospheric prices.

Beyond offering the potential to turn a profit, the benefits of Prello already seem obvious to Delphin. Watching a team of workers prune the trees on his property outside Paris, he said, “This is huge work. For a Parisian guy like me, you cannot imagine how complex it is.”

Unlike in his primary home, Delphin will not need to hire gardeners in Provence. Under the terms of the sale, Prello will maintain the property, including the swimming pool and garden, for a total monthly fee from the owners of €500; Delphin’s share is one-quarter of that, plus a €99 monthly membership fee to Prello.

Prello’s first property sales are expected to close in the coming weeks, and the company plans to launch in Spain and Italy early next year. Competition is already growing: A similar French startup named Altacasa launched last month with €2 million ($2.3 million) in seed funding.

Mathias Flattin, the VC funding Prello, says he envisions a growing buy-share segment among property-tech companies in Europe, where generations of people have been raised spending weekends and vacations at their grandparents’ country homes—only to be compelled to sell them later, in order to pay high inheritance taxes common to many European Union countries.

Unlike in earlier times, when Europeans owned houses for generations, today’s younger generations are far more nomadic and see sharing properties as a boon rather than a disadvantage. “There has been a strong social shift with Gen X and millennials,” Flattin said.

“They want to remain nomads, they want to be able to move,” he says. “A lot of people are tenants in their main home, and want to buy their second home.”

Especially if it is a villa in Provence with a swimming pool.