The coming year will produce a fertile mergers and acquisitions market in UK property, with two industry heavyweights agreeing that businesses will need to scale up to head off a looming financial crisis.
Rob Bould, chief executive of Bilfinger GVA, said: “
“Fees haven’t recovered since the global financial crisis and in terms of debt, it feels like 2006/07. When talking about the macro-economics including oil prices, falling stock markets and China & USA interest rates, evidence suggests we could be heading for more challenging times, with some leading commentators predicting dramatic declines. At times like this it would be prudent for businesses to not carry large amounts of debt. Banks can sometimes be irrational.”
Bould was speaking at a special Estates Gazette Question Time – the highest and coldest yet – at the property ski networking event Propski, in the Val Thorens resort in the French Alps.
On the terrace of the Chalet de la Marine, 2,500m above sea level, 70 property professionals put their questions to Bould and JLL chief executive Guy Grainger. EG editor Damian Wild was the moderator.
Bould did not comment on the Bilfinger GVA merger, but predicted the industry was see further M&A soon.
Grainger told the gathering his firm would be making acquisitions this year, following its purchase in August of design and fit-out company Bluu, under the company’s Tetris brand.
He said he had invested a lot of time looking for businesses to acquire, but stressed the importance of cultural synchronicity.
“For every acquisition we do, there are probably seven others that fail despite a lot of time being invested in it. Acquisitions fail when you have leadership that doesn’t buy into what you are trying to achieve,” Grainger said.
Grainger said a year ago that the firm had targeted London specialist Hatton Real Estate, acquired recently by Colliers International. Although Bould said he thought the move was too early for Hatton, he applauded the company’s achievements.
Estates Gazette is the media partner for Propski.
rebecca.kent@estatesgazette.com
