Why exactly is Deloitte in real estate? I’m being serious.
Since it acquired Drivers Jonas exactly six years ago in January 2010, the partners may have benefited from some tasty pay and pension deals, but has Deloitte really benefited from running a real estate business?
The truth is that when it acts for a client through its professional services, it is hamstrung in its ability to offer that client real estate advice because of the conflict of interest. Sure, it has had a few high-profile administrations over the years, which have allowed its property team to get its teeth into some juicy sell-offs, but its agency business has probably hindered as many deals as it has helped.
Other professional services firms, or what used to be called accountants, don’t seem convinced property is a natural fit either. While the likes of EY, KPMG and PwC dish out the odd bit of property advice, they are nowhere near as immersed in the agency world as Deloitte is.
Are the disciplines of professional services and agency diametrically opposed and therefore any efforts to merge the two ultimately doomed?
It seems I’m not the only one asking the question. This week, we reveal that Countrywide approached Deloitte before Christmas, although no agreement has yet been reached. It makes sense, and not just from Deloitte’s point of view. Countrywide has been looking to expand its commercial business ever since the residential agency world started to come under increased pressure from the undercutting online agents. As with the Lambert Smith Hampton deal in 2013, Deloitte’s team could help bolster Countrywide at a critical juncture for the business. Things are not about to get any less challenging on the residential front, after all.
Whether the deal comes off or not, this year is already shaping up to be a busy one for M&A. Rumours are swirling around a number of firms and, having just acquired Hatton Real Estate, Colliers’ Tony Horrell freely admits he is currently spending a quarter of his time running the rule over potential new recruits and acquisitions.
Expect plenty more where the Hatton deal came from, as long as the market remains in relatively good health. Political and economic volatility, particularly on the global stage, could conspire against the would-be consolidators - although it may equally lead to defensive alliances, so don’t be surprised if more firms don’t, in the words of David Bowie, “turn and face the strange”.
Now you can read all about it on our brilliant new app, which launched this week and - unlike some rival offerings - boasts a news feed that is linked to our website and updated daily. Users can also download and read the latest issue of the magazine and supplements. Better still, the app, which works on Android and iOS and is compatible with mobiles and tablets, is free if you have a paid subscription to the premium or digital subscription packages. Just visit www.propertyweek.com/app.
Go on. You know it makes sense.