COMMENT: As the hunt for talent becomes more central to businesses across all sectors, it will increasingly influence the shape of expansion strategy. Property consultancy is no exception and will have to adapt if it is to capture – and retain – the brightest and best.
For the past three decades, expansion and consolidation in the property consultancy sector has been determined primarily by corporate acquisition. This “big fish eats little fish and gets bigger” approach has seen firms such as CBRE, JLL, Cushman & Wakefield, Colliers and Savills grow phenomenally.
Further down the food chain, some firms have consolidated with the aim of remaining competitive, some have stayed in the middle of the road and others have sought the cachet of being niche consultants.
However, we’re now entering a new business environment where the “bigger is better” approach may no longer deliver the desired traction with the talent which ultimately drives all consultancy businesses.
Retaining talent
Acquisitions in the property consultancy world invariably entail the most valuable personnel being tied in with “golden handcuffs”, but it has not been uncommon for this talent to then leave once the cuffs are off.
Of course, it is hoped that by this stage the acquiring firm will have acquired a foothold in the respective sector and can build from that. However, it’s not the most effective method of talent retention.
The other argument for corporate acquisition is that, simply by becoming bigger and more dominant in the market, a business will attract more of the best people to work for it. That may have been the case for much of the past 30 years, but there must be increasing doubts about the continued effectiveness of this going forward.
Many from the Millennial and Generation Z segments of society are very removed in their attitudes and ambitions from the top performers of the 1980s and 90s. Our view is that today’s next generation of high-flyers places a greater sense of importance on control and immediacy – the feeling of belonging and the ability to change a business.
Changing tack
Farebrother is 220 years old this year, but it was five years ago that the partnership realised we had to fundamentally change our business strategy. We had received offers to sell out and didn’t want to go down that route, but also realised that simply continuing in our London Midtown niche was not an option.
It was Union Street Partners – our South Bank consultancy joint venture with Tuckerman – that was the turning point. It has become the most successful independent leasing and development consultant in the location and, equally importantly, showed us how to structure new ventures that diversify our business, develop new revenue streams and increase our market reach.
Since then, we have launched Flexible Office Space, which is our serviced office/co-working consultancy for landlords and occupiers; Sq. One Real Estate, which specialises in London mixed-use and residential development consultancy; and, most recently, Tandem Property Asset Management, which is being rolled out nationwide.
In each instance, the businesses have been established by proven experts and supported through equity participation, administrative resource and the networking of a group of businesses which are very different but have many clients whose service needs intersect.
This broadening of the business has been achieved without any dilution of Farebrother’s Midtown specialism. And it’s been a revelation to see how we could replicate in these businesses the same kind of dedication and focus on service excellence that has sustained our firm in the market for more than two centuries.
Talent centre stage
The power of an expansion model which puts talent centre stage and offers autonomy, identity and motivation is increasingly evident. None of this is saying that the big international firms are about to disappear. Property is a globalised sector and, of course, there will be a continued need for firms that can provide a scalable solution.
However, it is without doubt that in property consultancy there is now an alternative to being a big fish, middle-of-the-road or a niche player. And that route is increasingly in step with the changing attitudes of society and the talent it will produce.
Alistair Subba Row is senior partner of Farebrother
