Property Development

Medsea Estates Group PLC
26 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 just
signed a four year contract with Residencial Argos Sol, S.I to market all the
properties on a new €120million development in Murcia, Spain. AIM-listed Medsea,
which also owns ten percent of the developer, has sole selling rights for all
units, whose prices start at €99,000 and go up to €229,000 for the luxury
villas. Over the period of the contract the consortium believe they will
generate €35 million of profits of which approximately 10% will accrue to
Medsea.

Medsea's management also believe that in addition to the development income net
sales commission of circa €12 million will be made by Medsea over the period of
the contract.

The Residencial Argos Sol development, in the lakeside area of Cehegin, covers
325.083 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 it
by a new motorway. The international airports of Alicante and Murcia are just
over 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 its
health-giving hot springs.

Medsea also made in an investment of 785.000€ ( which equates to a holding of
13% in the development company holding the land and project) in the Frondoso
Valley in June 2004 at an initial land valuation of €24 million . After a recent
revaluation by Tinsa, the Spanish chartered surveyors, based on a revision of
planning consents allowing the developer to build 1066 houses the Land has been
re valued at €55 million.

Says Medsea's Chairman Tony Gatehouse: 'The Argos Sol project is a major
breakthrough for us, producing profits from two sources. As well as the
estimated €3.5 million profit we will make from our financial partnership with
the developer, we also anticipate generating a further €24 million through sales
commissions which translates to €12 million additional profit to Medsea after
paying agency commission over the next four years. This is excellent in terms of
Medsea's short to medium term prospects. We are also in early stage acquisition
talks with a number of targets. Potentially this will open up Cyprus, Turkey,
Dubai, Bulgaria, Portugal and South America, which will make Medsea much less
reliant 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. The
recent revaluation, based on revised planning consents allowing the developer to
build 1066 houses, now values it at €55 million. This puts Medsea in a very
healthy situation indeed.

'Argos Sol reflects the increasing demand we are finding from UK clients for
properties away from the traditional beach resorts. Cehigin is about 600 m above
sea level and has a dry mountainous climate, compared to the humidity found
along the coast. It is an old town with a population of 14,000, and comprises a
mix of medieval houses, churches and glorious architecture. It is surrounded by
valleys, mountains, reservoirs, forests and wildlife, yet with two international
airports only an hour away.

'The hot springs of nearby Archena already attract regular visitors and the
developer is in the process of building a luxury health spa with a clinic to
cater for them. Cehegin is an unspoiled area that is ideal both for residential
property and holiday homes.'

                                      -ends-


For further information contact:

Tony Gatehouse, Chairman, Medsea                                  0034 96 570 42
Juan Carlos Rodriguez Martinez, Chief Executive, Medsea           0034 96 570 02

HB Corporate
Imran Ahmad/Cecil Jordaan                                          0207 510 8600

Weber Shandwick Square Mile
Terry Garrett/Alex White/John Moriarty                             0207 067 0700


Notes to editors
Medsea Estates Group Plc is a leading Spanish-based estate agency group which
floated on AIM in August 2004. It was established in 1998 to service the
marketplace of the increasing number of UK and Irish nationals looking to
acquire residential properties in Spain.

Over the past six years the group has expanded to become one of the leading
agents within the area and now operates in a wide range of other European
countries including Italy, Portugal, Turkey, and Cyrpus.




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