Engel & Völkers offers Greece franchise opportunities

Engel & Völkers, the leading real estate agency specialised in the sale of high-class residential and commercial properties in the most exclusive locations is offering Cypriot investors the unique opportunity to secure one of the 80 partnership licenses that are being offered for Greece.

Andreas Matsas, Managing Director of Engel & Völkers (Greece & Cyprus), the Master Licensing Franchise holders for Cyprus and Greece told the Financial Mirror in an exclusive interview that this is probably one of the few opportunities where a Cypriot investor is offered a chance to participate in the booming Greek property market.

Demand is so strong for the limited number of Cyprus franchise licenses on offer that Engel & Völkers dispatched Johann Helms, the Hamburg based License Distribution Executive to Cyprus in order to help in the processing of record franchise interest for Cyprus and also help in the new expansion drive into Greece.

Engel & Völkers Germany have been thrilled at the efficient way with which the Cyprus franchise expansion plans are proceeding, which is why they approved plans submitted by Engel & Völkers (Greece & Cyprus) to proceed with the fastest franchise expansion drive ever attempted on a global scale.

“We have full confidence in our Cyprus partners and after seeing their business expansion plans for Cyprus and Greece, Head Office decided to send me to help in the effort,” Helms told the Financial Mirror, adding that in sharp contrast to other franchise networks, Engel & Völkers insist on developing the network based on the role model first established in Germany, which has now been expanded to cover 24 countries around the globe.

“We are very selective and expect prospective applicants to show to us that they are willing to learn and most importantly become one with the Engel & Völkers system and family,” said Helms.

This is important for Engel & Völkers, since they rely on people and the quality of service that is the same in any of the 24 countries where the German based group is now operating.

“We achieve this through a highly rigorous training programme for our partners, which is an on-going process that continues for many years after the partner joins the network.

The Engel & Völkers brand is associated with superior property at the right location with the buyer knowing that if it is listed by Engel & Völkers , then it also meets certain criteria such as having all documentation and licensing in place.

Franchise for everybody

Probably one of the prime attractions why people join the Engel & Völkers network is that it allows people from other professions to join, provided they meet the minimum criteria, and thus take advantage of the boom in property around the globe.

“By becoming an Engel & Völkers partner, you automatically secure the right to enter the property business, since we secure and cover all the regulatory aspects, which means a new entrant does not need to pass through the 8 – 10 year mandatory period before being allowed to become an independent operator active in the real estate market,” said Matsas.

In fact more than 70% of the Engel & Völkers partners scattered around 24 countries had never worked before in the real estate business before the joined the partnership, but because of the intensive Engel & Völkers training programme and continued support and their determination, they have become highly successful.

Low risk

Asked to explain the risk to reward ratio, Matsas cited the case of a typical Cypriot entrepreneur who needs to invest between CYP 60.000-100.000 to set up a new business, shop or trading activity in the area of interest.

“Hundreds of people open a business or a shop thinking they have a good idea, but so many are forced to shut down after a year or two because of wrong planning, lack of a viable business plan and limited chances of joining a fast and reliable international network for business referrals.”

“So I ask you, what is better. To invest about the same amount and become an Engel & Völkers partner with a proven track record or go it alone and face closure after a year or two?” Matsas said.

High commission

In order to give a clearer picture, Matsas agreed to give an insight as to what kind of fee scale and commission income a potential partner reaches after a few years of operations.

He explained that each exclusive license area has a transaction value of EUR 150 mln annually, and based on the 10% overall market share objective within 3-5 years of operation, a potential partner may be looking forward to generating about EUR 15 mln in transaction volume, which based on the typical 5% commission rate, gives an annual revenue of EUR 750.000.

“It all depends on how serious the partner is and how successfully the Engel & Völkers business concept is introduced and followed,” adds Helms who reminds readers of the recent German experience when 1400 individuals applied for 30 new partner licenses.

Helms said that in Germany and the other 24 countries where Engel & Völkers operate, people know and realise the tremendous opportunities that the Engel & Völkers name provides.

Exclusivity

In order to ensure that every partner has an equal opportunity to reach the international revenue targets, Engel & Völkers makes sure that the partners gain exclusivity in the areas where they operate, but also help in the exact location where they set up shop.

Engel & Völkers provides an individual a useful market analysis to evaluate the optimum size of the exclusive license area as well as the ideal shop location.

Based on the highly successful model, Engel & Völkers have decided to allow the operation of 15 shops in Cyprus and about 80 in Greece.

Shop vs. office

The property business is all about location and price but also trust in the people selling it, which is why every partner (licensee) undergoes a vigorous training course in Hamburg before allowed to set up a shop.

The partner also needs to adopt and implement the Engel & Völkers shop design so that it clearly identifies with the Group corporate design and layout.

According to Helms, the shop concept increases client visits usually by 40% compared to working through an office.

Double digit growth

The recent comment by the head of the Land Registry Department, Andreas Christodoulou that Cyprus property, apartment and detached house prices are expected to increase by 12% in the immediate future shows the potential of the real estate market as a solid and promising investment.

According to Christodoulou, Cyprus is the cheapest country in the European Union when it comes to properties, apartments, houses and land. For this reason, he added, many Europeans are interested in coming to Cyprus and investing in land and properties.

“The price increase is mainly due to the great demand that exists from European citizens,” said Christodoulou.” Predictably, foreigners are more interested in coastal areas, said Christodoulou, adding that Paphos, Larnaca and more recently Limassol were most in demand with Europeans.

Growing network

You may have the right property at the right price, but without quality people looking at it, your efforts are bound to fail. Enter Engel & Völkers and its international network.

In order to sell a property, the seller wants to achieve the highest price and sell it quickly. Two issues addressed by Engel & Völkers on a daily basis, which based on its extensive presence in 24 countries spanning four continents is made possible.

“By the end of 2006, Engel & Völkers shall have 320 sub-license partners around the globe with the number seen rising to 500 by the end of 2007.”

“We are opening a new shop every 100 hours, or every 4-5 days, mostly in Europe, but also in Asia Pacific and soon expanding into the US.”

With 150 shops in Europe alone – mostly in Germany, but also France, Scandinavian countries and others – Engel & Völkers is strategically placed to open a new market for Cyprus property.

“Our internal referral business – where one partner feeds clients and properties to other partners located in various locations – generates a significant increase in the total annual revenue, which is a significant factor in helping drive up profit,” said Matsas, who added that the Cyprus partner thus becomes ideally positioned to profit from client business originating from abroad, and also from business generated abroad by Cypriots buying property in another country.

Strong Network

Offices in Europe

Germany (73)

Spain (36)

Austria (4)

Switzerland (10)

UK (1)

France (1)

Portugal (2)

Turkey

Italy (3)

Czech Republic