"The hegemony of large international real estate brokers in Europe is an inescapable fact. While their market positions are quite different in individual countries, there can be no mistake in respect of their all-Europe rankings.CB Richard Ellis heads the first PropertyEU ranking of European real estate brokers, with investment volume in Europe and the UK exceeding EUR 40 billion in 2006 and the number of agents totalling 3,802. Jones Lang LaSalle is a very close runner-up in terms of investment volume with EUR 40 bn. The next in line are DTZ, Cushman & Wakefield, Savills and Colliers.
BRE and JLL stand out from the ranking with their respective EUR 40 bn plus investment volume, which is nearly double that of DTZ on the third place.
Cushman & Wakefield came in fourth, followed by UK top player Savills, which has recently entered Hungary. Colliers is the sixth biggest real estate broker in Europe.
While JLL is a very close runner-up in terms of investment volume behind CBRE, the number of its agents employed is substantially lower at 2,900.
While CBRE was unable to provide investment volume information exclusively for Europe (the figures refer to activities in EMEA), PropertyEU assumes that the bulk of the firm's investment volume is in fact generated in Europe (UK included).
The leading players are the result of big mergers and they have grown strongly in recent years on the back of smaller acquisitions, PropertyEU said.
While most of the top 10-players have expansion plans, there is general consensus that only a select number of companies will dominate.
“We see an ongoing polarisation in the industry between the major global property consultant and the niche players," PropertyEU cited Paul Bacon, CEO EMEA of Cushman & Wakefield as saying.
The globalisation of property markets is already a reality, he added. “[...] last year half of all transactions in Europe were cross-border," he said, adding that those firms capable of making these global connections will continue to be the winners.
According to Alistair Hughes, European head of Jones Lang LaSalle, large corporate clients want one-stop global firms to deal with their property requirements. Richard Fiddes, managing partner for Europe at King Sturge noted that clients are becoming increasingly aware of potential conflicts of interest if too much power is concentrated in the hands of a few very large global consultants. “This means there will be a continuing demand for advice from boutique or other niche firms in specific sectors," he said.
Who is the boldest?
In respect of expansion strategies, we need to take a look where the large global real estate consultants are present in Central and Eastern Europe. To this end, we have collected the CEE coverage for the top five property consultants. The table clearly shows, and it is no surprise at all, that all five of them (DTZ, C&W, JLL, CBRE, Colliers) are present in the three most sophisticated markets, Hungary, the Czech Republic and Poland.
What is more interesting than that apart from these three countries they are present only in Romania and Russia, which indicates that they see great growth potential only in these two in Eastern Europe.
Colliers has the largest CEE penetration, as it has already set up offices in virtually every country of the region, except for Bulgaria.
Colliers also stands out from the others in a respect that it has stepped into markets where none other players dared to go just yet. For instance, Colliers is the only big global player with an office in Albania, where there is virtually no market for commercial real estate. It is already present in 30 European countries and a spokesman for the company said there was “little room for further European expansion," given that the company's list covers most of the European region.
Continuous acquisitions
The biggest real estate consultants followed the tracks of other sectors and produced growth primarily by acquiring smaller companies. The large global players, CBRE, JLL, Cushman, DTZ, Colliers, either took over smaller local companies or purchased smaller assets that covered some of the special niche segments of the real estate market.
Of the biggest ones, only Cushman & Wakefield and Colliers are not public companies. An investment group controlled by the Agnelli family of Italy acquired a controlling stake in Cushman & Wakefiled in April this year. “It wouldn't be a total surprise if - following in the footsteps of the football premiership in the UK and the lead taken by Agnelli - alternative European money appeared to buy up a leading UK agency, possibly from Russia," Fiddes said.
DTZ and Savills are listed in London, while the shares of Jones Lang LaSalle and CB Richard Ellis are traded on the New York Stock Exchange."
Source:
Portfolio Online Financial Journal
25.10.2007