The agency world is changing. A week barely goes by without one of the larger consultancies buying a smaller competitor; rumours are rife about just how far TPG will go in building up its agency empire following the acquisitions of DTZ and Cassidy Turley; Eastdil Secured, owned by the $1.5tn (£935bn) US-based financial institution Wells Fargo, is not-so-quietly building a presence outside the US; and one consultancy, once coy about its owners, is now clamouring to tell the world about its big French banking parent.
When John Slade took over as chief executive of BNP Paribas Real Estate in the UK in June 2012, even he was sceptical about whether a real estate business should be part of a bank. Surely it would lead to too many conflicts of interest and limit the amount of business the real estate division could do?
Now, the real estate firm credits the bank with much of its growth and how it plans to push its turnover to €500m within two years.
Thierry Laroue-Pont, who took over as chairman of BNP PRE’s executive board from Phillipe Zivkovic in July, says that the real estate business is as much an integral part of the bank as the real estate business now considers the bank to be to it.
“We have been fully integrated for 30 years,” says Laroue-Pont. “There are great synergies between the bank and the real estate division. No-one else can provide the access we have to clients.”
He says that access to the bank’s high net worth clients has enabled the real estate business to transact more than €500m (£395m) in Germany on behalf of Asian clients so far this year.
And in its homeland of France, the sums are even greater; the bank recently completed the €1.2bn acquisition of the Risanamento portfolio of nine central Paris offices for a Saudi client of the bank.
And the relationships are now also coming through to the UK business.
Slade says the firm has completed between £500m and £750m of acquisitions for wealth management clients in the City and, through the bank’s relationship with Chinese sovereign wealth fund Ginko, was able to play a role in its and The Crown Estate’s £345m acquisition of out-of-town retail trophy Fosse Park.
And there are hundreds of millions of pounds of other deals currently in various stages of negotiation, teases Slade, including for a Chinese client in the City and a New York-based investor.
“We can get access to people other agent competitors just don’t know,” boasts Slade, reminiscing about a lunch earlier this month in Jakarta with three of Indonesia’s richest billionaires.
Laroue-Pont says the real estate business has collectively done around €3.4bn of transactions on behalf of the bank’s clients this year, and he is confident that will reach €5bn.
He says that in Paris around 20% of the real estate division’s business comes directly from the bank. Slade thinks this is even more in the UK – potentially a quarter of the business. It is something he is obviously quite proud of, reflecting back to when he joined and the UK business still had a residue of being a partnership, a feeling that it was Atisreal, not BNP PRE.
Alongside providing access to the new wave of investors buying commercial property, Slade says the close relationship with the bank enables the real estate business to offer a full service range to clients, including debt.
The bank is keen to grow its property debt book, says Slade, particularly in the UK, where equity-to-debt ratios are lower and the market is stable.
But despite the importance of the bank in accessing the capital that is driving the global property market in these times, and the debt that buyers still require, Slade says BNPPRE will not forget its property roots.
“Our DNA is real estate,” he says, “but we are now bringing the power of the bank to that.”
And that is potentially the future for at least the large-scale consultants. To succeed and grow, access to capital – be it through a client-feeding financial institution, or a revenue-hungry private equity giant – is a no longer a luxury, it is a necessity.
