May-13-28.1

Overseas Properties

Andrea Kirby meets some UK agents who have launched international operations

The credit crunch marked the end of a booming property market, not just in the UK but overseas. After years when Spanish, Turkish, even Bulgarian or Cape Verde properties were selling like hot cakes, suddenly the markets froze. Both mortgages on overseas properties and re-mortgages on UK properties dried up, media coverage dwindled, and resale markets froze.

But some UK agents are continuing to do well from overseas property. Not just the big guys like Savills and Knight Frank, either, smaller, independent agents are prospering in international markets. For instance, Waterside Properties now represents properties in a number of international destinations.

may-13-28.2Nick Byrne of Waterside says, “Typically, commission rates are five per cent of the sale price, so considerably higher than those achieved by estate agents here in the UK.” Split or shared commissions with overseas affiliate agents, though, do reduce that figure on occasion.

There are different ways of getting into the market. Starting your own overseas branch, obviously, requires a huge commitment of investment cash and working capital. So does acquiring an overseas agency. Smaller agents have generally chosen, instead, to work with overseas agents and developers, representing their properties in the UK. That’s what Waterside Properties did. Nick Byrne says, “We started by working with associated/partner agents overseas – they secure the listings, and we provide the UK marketing effort and introduce buyers to them.” However, he says, over the years the modus operandi has changed and Waterside Properties is now growing a network of affiliated and franchised agents overseas; there’s already one in Antigua and they are now talking  seriously with another agency. Barton Wyatt took a similar route, partnering with overseas agents, and James Wyatt points out that it was able to start its international business using cash in hand, without recourse to bank borrowings. He warns though, that, “while international sales is a very easy market to get into, it’s close to finding hens’ teeth to make money from!”

may13-24.3The franchise model is another way of approaching overseas agency. Winkworth is developing a strong overseas business, and adopts the same franchise model as in the UK, with branches in Portugal and France. But James Trimble, Director, Winkworth Franchising, points out that there are significant costs ,“With international franchising there has to be a sizeable operation in order to receive a return for Winkworth,” he says, “as we have to set up quite a lot in the first place, website, trade marks, legal registrations, marketing, language tweaks, and franchise contracts updated for local laws, which can cost thousands before launch.”

As well as local branches, Winkworth offers international resale homes from Mayfair, and sells international new developments from the West End in London.

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