Financial services experts from Goldman Sachs and Morgan Stanley have been hired to sell-off the world’s third largest property services firm Cushman & Wakefield which is currently under the control of a single Italian family.
Exor SpA — the investment vehicle of the Agnelli family — has made it clear it would prefer a privately held buyer to take over the company. Nor will it consider selling to a direct rival.
Unconfirmed, but highly regarded sources, claim Exor has sanctioned the disposal as rising property prices push up the value of competing companies.
The Agnelli family — which also has control of Fiat Chrysler Automobiles — paid $565.4m (£414.5m) for a 67.5 per cent share of Cushman in late 2006. Despite serious losses and management upheaval as the recession took hold, the family continued to increase its stake. It now holds 81 per cent with the company conservatively valued at around $2bn (£1.4bn).
A statement from Cushman & Wakefield said both parties “continually seek ways to further enhance the businesses, create value and further accelerate”. It added: “There is currently no transaction to disclose, nor guarantee that such a review may result in any transaction.”
The ongoing low-interest-rate environment has allowed investors to pay record prices for office buildings, stores, hotels and other properties which, in turn, have produced inflated brokerage commissions for real estate services firms. Subsequently, shares in Cushman’s rival CBRE are nearing its 2007 peak, and those for Jones Lang LaSalle are just below a record high.
Meanwhile, global investment firms have been looking to acquire or expand property services firms. Last year, a venture led by private-equities giant TPG paid $1.05bn (£769m) for DTZ and merged it with Cassidy Turley, a Washington firm valued at up to $600m (£439m).
BGC Partners, a Cantor Fitzgerald spinoff, has also been expanding the services firm Newmark Grubb Knight Frank. And earlier this month, Toronto-based FirstService confirmed it plans to off load its commercial real estate unit, Colliers International, as a separate company.
Cushman & Wakefield — which will celebrate its 100th birthday in two years — has benefited from the market’s recovery and a more rigid management structure in recent years. There is little chance of it being sold to a competitor, however, because both the family and Exor believe much of Cushman’s value is in its brand and 98-year-old culture.
