The recent acquisition by BNP Real Estate of the ‘old school’ agent Strutt & Parker has got me thinking about how much of a change we have seen over the last decade within the London commercial property market and the agents and consultants that service it. Back in 2007, there were over 35 commercial agents with > £10m annual turnover.
Today there are only 23. Over that period we have seen the likes of CBRE, JLL and co buy up some of the industry’s most recognisable names such as Dalgleish and King Sturge and the DTZ/Cushman Merger/Acquisition?? to name just a few of a huge number of M&A activity in the sector.
These acquisitions make sense in theory. The idea being that the Goliaths can offer an integrated, global platform with a wider service offering. This makes sense and is true. However;
Does something get lost in the process?
There are those that argue that whether it be individual small retailers or large multinationals, clients are increasingly being left with less and less choice between agents and consultants. Is it true that with every acquisition dies another unique business (such as Strutts, King Sturge, Drivers Jonas) with its own culture and methodology and thus the offering to the market, in general, is becoming dull and generic?
Whilst the big boys seem to be getting bigger, there are some small, niche practices that continue to offer their clients one or only a few services or cover a small region. I’m talking about the CWM’s and Munroe K’s of this world. These businesses offer their clients a very unique, highly experienced and honed service and level of personality that perhaps can’t be matched by the big boys. For this reason, I believe that there will always be a need for these types of firms.
That leaves us with the middle ground. Where do the mid-sized firms sit? Will the Rapleys and Montagu Evans of the world continue to compete against the big boys and the small specialists? Again, it can be argued both ways. These firms offer a unique culture whilst also catering for a number of requirements and tend to have good regional reach. However, can they call themselves specialists? Do they offer a true turn-key service to their clients? They certainly can’t offer a global platform.
I guess only time will tell but I suspect that these firms as we know them will most likely not exist in another 10 years time and that the property market will go the way of accounting Big Four.
Are we about to see property’s Big Four?
Or read some of our company blog’s like our 10th anniversary here.