With the imminent takeover of Cushman & Wakefield by DTZ, EG examines what the future is likely to hold for the new-look company and its London staff
It’s a tense time for the 1,295 London staff at DTZ and Cushman & Wakefield. The $2bn global takeover of Cushman by DTZ, expected to be finalised any day now, means big changes locally for the 530 DTZ staff focused on Curzon Street, W1, and their 655 colleagues at Cushman’s offices at Portman Square, W1.
The new firm will be branded Cushman & Wakefield and in London will be run by Cushman eminence Digby Flower, recently announced as the new head of London markets and chairman of UK and Ireland at the merged firm. DTZ’s Colin Wilson has been appointed chief executive of the new business, to whom Flower will report.
Observers watching from the sidelines say that the appointment of deal-doing Flower indicates this focus will be uppermost in London. Speaking privately to EG, a very senior figure in a rival agency confided: “The two firms could gel, or it could all go horribly wrong. They fit well, from a skills point of view. But look at what happened last time DTZ got into this kind of situation. The merger with Donaldsons saw the Donaldsons people leave as soon as they could. Nor was it good with Hodnett Martin Smith.”
Both deals are now ancient history – Hodnett Martin Smith was acquired for £9.1m in 2005, an exuberant time for the London property market, and the £48.6m Donaldsons deal took place in even more exuberant 2007. They were still fighting employment tribunals arising from the Donaldsons deal in 2009. There is also a health warning: even the most senior rival remains just that – a rival. Remarks from those sources will cause much salt to be pinched in the DTZ/Cushman camp.
Neither DTZ nor Cushman wanted to talk about how their respective teams would fit together – and how many staff might not be needed – ahead of the formal completion of the transaction. Flower said in a statement: “I am looking forward to growing our business in one of the world’s most progressive cities. By tapping into the combined talent pool of Cushman & Wakefield and DTZ and working together, we undoubtedly have the power to increase market share in London significantly.”
For Cushman staff the future perhaps looks more secure than it did during the months when the Agnelli family’s Exor vehicle was touting the firm for sale, even though it is clear that DTZ bosses are running the show.
Some rivals report a fluttering of Cushman and DTZ CVs landing on HR department desks this summer. Independent observers say if they are, it is no more than the usual churn. Specialist recruitment consultants approached by EG have not seen much evidence of staff at either firm making contingency plans or preparing to jump ship. “At present we are not noticing anything dramatic. We are still filling positions in both businesses,” said one. “It’s early stages and individuals are being promised a lot, the trouble will come if they don’t deliver on it… that’s when we will see a fallout. At present it is being perceived by most as a positive.”
Some specialisms will see more disappointed faces than others. In a few areas, conspicuously in town planning, the fit between the two firms is perfect: Cushman has no planning team, which puts DTZ’s team in an enviable position. Many colleagues in both firms could be green with envy before the year is out.
Will there be redundancies and rationalisations? The mood music suggests nothing on the scale of JLL’s £197m buyout of King Sturge in 2011. The JLL/King Sturge merger was felt most acutely in the English regions, with offices in Bath, Liverpool and Newcastle closed. Manchester saw six redundancies in a wave of 30 regional job losses. In London the overlap was not so painful, although inevitably some staff left at the end of their contractual lock-in period.
Recruitment seems more likely than redundancies, if Flower’s aim of increasing the firm’s share of the London market is to be realised. But some relocation of back-office jobs – and potentially some job cuts – cannot be ruled out as the new firm searches for efficiencies and attempts to boost profit.
Magic numbers
Does data help unravel the riddle? The 1,295 London headcount at the newly merged firm compares with West End and City combined totals of 1,750 at JLL (1,923 if Canary Wharf is included). For comparison, CBRE has 1,950 staff in London and Colliers International has 495.
JLL makes a good comparison – the newly merged firm and JLL both have global turnovers hovering around £3.5bn – and a similar scale of ambition. On present performance in London, the merged firm could be viewed as slightly understaffed.
JLL’s London investment agency team scored deals of around £667m in the first quarter of 2015, compared to £600m for the combined C&W and DTZ teams. London office agency activity shows a similar spread. EG data shows first-quarter totals of 662,000 sq ft for the combined C&W/DTZ team, a hair’s breadth behind JLL on 673,000 sq ft.
