FAQ's - Operations
Q
What are the Group’s main activities?
A
The Group’s main activity is arranging the sale of new residential
properties in Southern Spain to UK and Irish residents. A commission
is generated on each sale, receivable from the developer. The majority
of buyers are introduced via a network of UK and Irish property
agents and commissions are payable by the Group to those agents
in respect of each completed sale. In addition, the Group acts as
an estate agent (dealing with second hand rather than new properties)
and receives a commission on properties sold, although this commission
is paid by the buyer.
Q
Why is the business focused on Spain?
A
The demand for property in Spain is forecast to grow substantially
over the next ten years as increasing numbers of Northern Europeans
retire to warmer climates. According to an Alliance & Leicester
International report dated 2003, by the year 2020, one in five older
people will be living outside the UK, the vast majority in Spain.
Spain is the leading country for the many Europeans who desire a
property as a holiday home or investment, which has lead to a doubling
in prices in many parts of the country over the past eight years.
Also, younger families are choosing to build a new life in Spain.
Medsea Estates is in a very favourable position, the Directors believe,
to take advantage of this expanding sector.
Q
Who are the Group’s customers?
A
The Group’s customers are primarily the developers and promoters
with whom the Group enters into mainly non-exclusive agency agreements
for the sale of the new properties being built. In addition, the
Group enters into commission sharing arrangements with each of its
UK and Irish agents who are the source of introductions to buyers
of the properties. Whilst the Group effectively manages the relationship
between these buyers and the developers, and ensures that so far
as possible the purchase is satisfactorily completed, these buyers
are not formally the customers of the Group.
Q.
Are potential property buyers provided a one-to-one service?
A
The Group invites the potential buyer out to Spain and the costs
of accommodation and hosting are covered by Medsea. Visits typically
last for four days and three nights and during that time the potential
buyer is shown a range of properties in their price range. A Medsea
representative is assigned to each potential buyer, who will pick
them up from the airport, accompany them during their visit and
then arrange for transportation back to the airport at the end and
generally look after them during their stay. The Directors believe
that this one-to-one approach is a major feature of their success.
To gain a potential buyer’s trust and to act with integrity
and professionalism is, the Directors state, one of Medsea’s
unique selling points. This unique approach to the sales process
is seen by the Directors as a direct result of over 20 years experience
in the Spanish property market.
Q
Does Medsea provide funding for buyers?
A
If the buyers require funding, Medsea will introduce them to a local
mortgage provider, from whom Medsea will receive commissions based
on introductions made.
Q
Does Medsea operate in a very competitive market?
A
The Group operates within a highly competitive market, but due to
its method of operation, has been able to establish itself as one
of the top half dozen leading agents within the area. Of these,
it is the only one to work substantially with independent agents
in the UK and Ireland, as opposed to having a direct presence there,
and therefore, its size and importance within its market is, the
Directors believe, far greater than would be recognised immediately
within the UK.
The Directors also believe that the Medsea approach, including
the direct employment of staff (rather than a commission only sales’
force), maintains the Group’s competitiveness within the Market.
Q
Why has Medsea obtained Admission to trade on AIM?
A
The Directors believe that the Admission will raise Medsea’s
profile, and will provide a base from which to expand the Group’s
activities. The Directors believe that there will be opportunities
available to link more closely with the Group’s UK and Irish
agents by offering them shares in the Company and undertaking possible
acquisitions within the sector.
As a result of Admission, the Directors believe that in the future,
the Company will also be able to incentivise key staff by the issuance
of share options.
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