Sav­ills Mid­dle East seeks growth through ac­qui­si­tions in 2019 af­ter Clut­tons takeover

The National - News - - BUSINESS - SARAH TOWNSEND

Global real es­tate con­sul­tancy Sav­ills’ Mid­dle East unit, cre­ated from the takeover of fel­low con­sul­tancy Clut­tons in May, aims to dou­ble in size over the next five years through ac­qui­si­tions and new busi­ness lines to serve clients in the re­gion.

In par­tic­u­lar, the com­pany wants to es­tab­lish a project and build­ing con­sul­tancy and in­ter­na­tional sales ad­vi­sory team. For the lat­ter, it ap­pointed a di­rec­tor this year and aims to hire two more re­cruits in 2019.

It is also on the look­out to ac­quire any spe­cial­ist prop­erty agen­cies from the re­gion that could help it to meet its ob­jec­tives, Sav­ills Mid­dle East chief ex­ec­u­tive Steve Mor­gan told

The Na­tional.

“[Ac­qui­si­tions] are def­i­nitely a pri­or­ity for 2019 – par­tic­u­larly com­pa­nies that are strong in ser­vice lines we are not at the mo­ment.

“For ex­am­ple project and build­ing con­sul­tancy and any kind of bou­tique, spe­cial­ist prac­ti­tion­ers that op­er­ate in ar­eas we don’t cover, such as re­tail ad­vi­sory, ports and air­ports, in­dus­trial and lo­gis­tics,” Mr Mor­gan said.

The ideal ac­qui­si­tion would be a small com­pany. “When you look at large busi­nesses that sort of do what you do, you have to ques­tion what value you’re adding,” the chief ex­ec­u­tive said.

“The key for us is get­ting the cul­tural fit right and mak­ing sure any busi­ness that comes in is able to com­ple­ment that as op­posed to di­lute it.”

Project and build­ing con­sul­tancy teams pro­vide sup­port to de­vel­op­ers and other stake­hold­ers when plan­ning, build­ing, op­er­at­ing and manag­ing prop­er­ties.

Sav­ills Mid­dle East aims to es­tab­lish this unit re­gard­less of whether it does so through ac­quir­ing a whole com­pany or team, or by grow­ing or­gan­i­cally, Mr Mor­gan said.

Sav­ills Group com­pleted the takeover of Clut­tons Mid­dle East for an undis­closed sum, giv­ing the Lon­don-listed com­pany its first wholly owned unit in the re­gion. Clut­tons Mid­dle East will be re­branded as Sav­ills Mid­dle East from Jan­uary 1.

The for­mer Clut­tons Mid­dle East has of­fices in the UAE, Bahrain, Oman and Saudi Ara­bia, while Sav­ills has a net­work of more than 600 of­fices and 35,000 staff across the globe.

Real es­tate com­pa­nies in the GCC are seek­ing to con­sol­i­date as they emerge from a three-year oil price slump that muted con­struc­tion ac­tiv­ity and squeezed their prof­its.

Although prop­erty prices are still de­clin­ing, re­newed eco­nomic growth is now buoy­ing in­vestor sen­ti­ment and re-en­er­gis­ing the mar­ket.

Un­der the Sav­ills deal, the Clut­tons en­tity re­tained all of its 190 re­gional staff and has since grown to em­ploy 230 staff, in­clud­ing a di­rec­tor ap­pointed to build a team ad­vis­ing Mid­dle East in­vestors buy­ing over­seas prop­erty.

Mr Mor­gan wants to dou­ble the size of the busi­ness by the end of 2023 af­ter achiev­ing sim­i­lar growth in the past five years. In this aim, “the Sav­ills mar­riage has been good for us”, he said.

“I think to [dou­ble in size again] we need to have a truly in­ter­na­tional plat­form other­wise we’d strug­gle to grow at the same rate.”

Mid­dle East out­flows to in­ter­na­tional real es­tate re­main strong, par­tic­u­larly in de­vel­oped mar­kets such as the UK, US and Europe, he said.

In Bri­tain, in­vestors have an ap­prox­i­mately 20 per cent price ad­van­tage com­pared to 18 months ago.

This is due to the strong US dol­lar – to which most Ara­bian Gulf cur­ren­cies are pegged – and also the weak pound be­cause of Brexit uncer­tainty. Is­lamic economies in South East Asia are also grow­ing their ap­peal.

The UAE, Oman and Bahrain con­tinue to gen­er­ate high sin­gle-digit rev­enue growth for the Mid­dle East busi­ness, and stand to ben­e­fit from govern­ment stim­uli to boost their economies and en­cour­age ex­pats to in­vest in lo­cal real es­tate.

But the fastest-grow­ing mar­kets are Egypt and Saudi Ara­bia, which present op­por­tu­ni­ties for Sav­ills in the ed­u­ca­tion, health care and af­ford­able hous­ing seg­ments in the years ahead, Mr Mor­gan added.

The com­pany also in­tends to ex­pand its agency busi­ness in UAE lux­ury res­i­den­tial prop­erty.

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