Oligarch snaps up Safra mansion for record €500 million

Lakshmi Mittal, the Indian steel tycoon, holds what is thought to be the record for the most expensive house in Europe - and possibly the world - no longer. Mittal paid £57 million for a mansion in Kensington Palace Gardens in London in 2004 but he has now been trumped in some style. An unnamed Russian oligarch has forked out €500 million - that's £392 million - for a villa on the French Riviera acquired as a holiday home by King Leopold II of Belgium in 1902.

The price of the Belle Epoque pile, and the scramble for property in the area by the Russians, has staggered even the local estate agents. "It's completely surreal and we are really uneasy," Jean Pierre, one agent in the south of France tells Le Parisien. "We don't dare any more propose any price below €100 million for these clients. Anything below and they throw you out…a nd you should see how they do it." In a comment piece, Nice Matin, the local paper, says: "At this price tag we are beyond luxury and even reality."

The Villa Leopolda at Villefranche is very high-end. With 20 acres of grounds and hundreds of olive, cypress and lemon trees, it has views of Cap Ferrat and the Mediterranean. It was once owned by the late Gianni Agnelli, the Fiat boss, who entertained Ronald Reagan and Frank Sinatra there.

The seller is Lily Safra (pictured with parasol, with socialites Mikki Sarofim and Jerome Zipkin at La Leopolda in 1991) the Brazilian-born socialite and philanthropist, who is the widow of the Jewish Lebanese banker Edmond Safra. He died in an arson attack on the couple's apartment in Monaco in 2003. She is said to have held out for months as the buyer raised and raised his bid.

The name of Roman Abramovich, the Russian who owns Chelsea football club, has inevitably been linked with the deal but he denies it. He is already renovating a chateau nearby at Cap d'Antibes once owned by the Duke and Duchess of Windsor, which he acquired for a snip, €20 million, six years ago.

The Russian frenzy is causing resentment in the area. One Russian tycoon's housekeeper, named only as Pierrette, tells the French papers: "I attended a party where the guests had fun throwing burning €500 notes into the air while everyone split their sides laughing. The domestic staff were later told to collect the ashes. It was sickening."