Property consultancy facing up to tough market challenges

Hardies and Shepherd evolve as merger creates new industry player

A major property and construction consultancy group has described trading as “challenging” despite the rising house price trend.

Dundee-born George Brewster is managing partner of Hardies LLP and private partnership chartered surveyor group Shepherd.

The two companies – which continue to operate under their own banners – merged in late 2016 to create an entity with sales of about £25 million and a workforce of around 350 staff.

Dundee-registered Shepherd, which traces its roots to 1880, is one of the country’s leading home report producers and provides a range of services to the commercial and residential property markets, while Hardies is a full service, residential and commercial property and construction consultancy.

Mr Brewster said homeowners are benefitting from a rise in house values but activity in the market is relatively low.

“Everybody’s dinner table conversation is that the value of their house is going up,” he said.

“Prices have recovered from the pre2008 correction but if you look at the transaction numbers reported through the Register of Sasines they are well down. It means trading is difficult as we need transaction numbers to drive our profitability.”

While property sales activity remains subdued, Mr Brewster said the business is picking up work within a secondary marketplace in which homeowners require valuations to release equity or for other reasons such as estate planning for inheritance purposes.

He also said the group has made significant headway in bringing Hardies and Shepherd together.

“Hardies LLP has changed since we came in,” Mr Brewster continued.

“We came in and we restructured the business and what we have done is spent a lot of time and energy over the last year merging IT systems (and) putting offices together physically.

“We have done Glasgow and Edinburgh but the two outstanding offices that have not been merged – city offices – are Dundee and Perth but that is due to issues with leases.”

Since the merger, St Andrewsregistered Hardies’ footprint has shrunk to six offices, although the total estate under the Shepherd umbrella sits at 39.

Accounts published at Companies House this week show Hardies LLP achieved sales of £3.43 million and a pre-tax profit of £560,928 in the eight months to November 2016.

A second set of accounts for the year to November 30 2017 were also filed this week but do not contain a profit and loss account.

Mr Brewster said as a private partnership Shepherd was not required to publish accounts and financial details were only disclosed among the partners.

Managing partner George Brewster, left, with consultant partner Derek Ferrier when the merger of Hardies LLP and Shepherd was completed in late 2016.