Craven House Capital Regulatory News (CRV)

26 Oct 2006 07:01

Medsea Estates Group PLC26 October 2006 For immediate release 26 October 2006 MEDSEA IN €120MILLION SPANISH PROPERTY DEVELOPMENT DEAL Medsea Estates Group PLC, the leading Spanish-based estate agency, has justsigned a four year contract with Residencial Argos Sol, S.I to market all theproperties on a new €120million development in Murcia, Spain. AIM-listed Medsea,which also owns ten percent of the developer, has sole selling rights for allunits, whose prices start at €99,000 and go up to €229,000 for the luxuryvillas. Over the period of the contract the consortium believe they willgenerate €35 million of profits of which approximately 10% will accrue toMedsea. Medsea's management also believe that in addition to the development income netsales commission of circa €12 million will be made by Medsea over the period ofthe contract. The Residencial Argos Sol development, in the lakeside area of Cehegin, covers325.083 sq m and comprises 830 units - ranging from apartments, town-houses,semi-detached villas and an aparthotel/spa. Cehegin is approximately 62km from the City of Murcia and linked directly to itby a new motorway. The international airports of Alicante and Murcia are justover an hour's drive away, as are a choice of beaches. As well as its large lake(venue for the National Fishing Championship), the area is renowned for itshealth-giving hot springs. Medsea also made in an investment of 785.000• ( which equates to a holding of13% in the development company holding the land and project) in the FrondosoValley in June 2004 at an initial land valuation of €24 million . After a recentrevaluation by Tinsa, the Spanish chartered surveyors, based on a revision ofplanning consents allowing the developer to build 1066 houses the Land has beenre valued at €55 million. Says Medsea's Chairman Tony Gatehouse: 'The Argos Sol project is a majorbreakthrough for us, producing profits from two sources. As well as theestimated €3.5 million profit we will make from our financial partnership withthe developer, we also anticipate generating a further €24 million through salescommissions which translates to €12 million additional profit to Medsea afterpaying agency commission over the next four years. This is excellent in terms ofMedsea's short to medium term prospects. We are also in early stage acquisitiontalks with a number of targets. Potentially this will open up Cyprus, Turkey,Dubai, Bulgaria, Portugal and South America, which will make Medsea much lessreliant on its current activities which focus on Spain and Italy. Concurrent with this, we have also had our Fondoso Valley investment revalued.In June 2004 we invested €785,000 at an initial valuation of €24 million. Therecent revaluation, based on revised planning consents allowing the developer tobuild 1066 houses, now values it at €55 million. This puts Medsea in a veryhealthy situation indeed. 'Argos Sol reflects the increasing demand we are finding from UK clients forproperties away from the traditional beach resorts. Cehigin is about 600 m abovesea level and has a dry mountainous climate, compared to the humidity foundalong the coast. It is an old town with a population of 14,000, and comprises amix of medieval houses, churches and glorious architecture. It is surrounded byvalleys, mountains, reservoirs, forests and wildlife, yet with two internationalairports only an hour away. 'The hot springs of nearby Archena already attract regular visitors and thedeveloper is in the process of building a luxury health spa with a clinic tocater for them. Cehegin is an unspoiled area that is ideal both for residentialproperty and holiday homes.' -ends- For further information contact: Tony Gatehouse, Chairman, Medsea 0034 96 570 42Juan Carlos Rodriguez Martinez, Chief Executive, Medsea 0034 96 570 02 HB CorporateImran Ahmad/Cecil Jordaan 0207 510 8600 Weber Shandwick Square MileTerry Garrett/Alex White/John Moriarty 0207 067 0700 Notes to editorsMedsea Estates Group Plc is a leading Spanish-based estate agency group whichfloated on AIM in August 2004. It was established in 1998 to service themarketplace of the increasing number of UK and Irish nationals looking toacquire residential properties in Spain. Over the past six years the group has expanded to become one of the leadingagents within the area and now operates in a wide range of other Europeancountries including Italy, Portugal, Turkey, and Cyrpus. This information is provided by RNS The company news service from the London Stock Exchange