Central and Eastern European markets are booming and most segments of the property business are growing rapidly, thus providing an opportunity for advisory firms to expand. Jonathan Hallett, Managing Partner for Central Europe talked to Property Forum about Cushman & Wakefield’s plans for the region.
It’s been nearly two years since the merger of Cushman & Wakefield and DTZ took place. What sort of changes did these two years bring for Cushman & Wakefield in Central and Eastern Europe?
The initial merger helped bring scale, not only globally but also to CEE, so that Cushman & Wakefield became one of three firms with the ability to answer to the needs of global occupiers and global capital. The timing of the merger was excellent, and the markets have grown significantly in the past 24 months, enabling Cushman & Wakefield to benefit from growing the top line whilst also managing synergies effectively. The merger has helped us to become the “new kids on the block”. We have managed to hire significant talent, whilst never losing face of the fact that we fight every day to do our best. As a firm, Cushman & Wakefield is now a lot more ambitious and has helped change the mentality that we have the ability to help influence clients to make the right decisions for their business.
Which business segments have seen the largest growth in the last two years? What are clients looking for in 2017?
Occupier Services at Cushman & Wakefield can now deliver on the global real estate level following the merger. Capital Markets has grown significantly with new leadership and also supported by a strong market. Property and Project Management has grown likewise due to the core capabilities of the merged services. Client demand is specifically in the above services, but more importantly, they are looking for solutions for their business rather than just a service.
Are there any markets within CEE where the competition among advisory firms is getting fiercer? Do you expect new players to join the race?
Yes, the Big Three continue to grow, offer a wider service platform and focussed on talent ad client solutions. Niche firms are also growing such as Savills who have entered the Czech Republic and looking at other markets.
In 2017 Cushman & Wakefield has expanded its presence in the SEE region by the creation of Cushman & Wakefield Forton in Bulgaria and Macedonia and Cushman & Wakefield Echinox in Romania. Are there any more affiliate arrangements in the works?
Other recent Cushman & Wakefield Alliance Partners also include Greece with Proprius, Ukraine and the former DTZ Alliance, Georgia and Kazakhstan with Veritas Brown. Yes, other markets will also follow.
How is doing business different in these countries than it is in the more mature markets of CEE?
Much of this depends on three key factors: the maturity of the market and its legal system, the size of the markets and the presence of international corporates / capital, the political stability of the market. Based on the above, we are reviewing the strength of the Alliance Partners to match their ability to provide client solutions. For example the legal system in Ukraine is very similar to other mature CEE markets (politically less so).
Are there other countries in the Balkans or elsewhere in the wider CEE region that might present an opportunity for future expansion?
As mentioned before, the Balkans do provide an opportunity for growth and Cushman & Wakefield will look for further expansion in this region. In the meantime, we continue to strengthen the operations of our existing markets as well.