Brokers battle for business in Germany

Germany has become a battleground for big and small brokerage firms alike as they seek to tap new capital and expand market share.

At a time when the global brokerage firms are getting bigger, it seems there is still room for smaller local players to muscle in and get a larger slice of the action. In early September, local German agent Dr Lübke announced it was gearing up to do battle with heavyweights CBRE and Jones Lang LaSalle for a bigger share of the residential market in Germany. ‘We see very good potential to grab market share from our competitors,’ Ulrich Jacke, co-owner of Dr Lübke, told PropertyEU. The Frankfurt-based property consultant is being renamed as Dr Lübke & Kelber after taking former Conwert head Jürgen Kelber on board as a new managing partner.

The estate agent, founded more than 45 years ago, currently employs 60 staff at its six branches in Berlin, Frankfurt, Munich, Stuttgart and Dresden. Now the company wants to expand its business considerably by tapping more seriously into the ongoing boom on the German residential market. ‘Looking forward, we see ourselves as one of Germany’s leading three asset and investment managers,’ Kelber said.

‘We want to grow assets under management from €200 mln to €1 bn within the next two years’, Jacke added. In order to achieve this goal, the company is seeking to expand its management services for foreign and national institutional investors active in residential real estate.

The goal is an ambitious one in a market which has become a veritable battleground for brokerage firms in their search for capital and market share. Heavyweights CBRE and Jones Lang LaSalle but also Colliers International and Cushman & Wakefield have set their sights on the vast German market and its potential. CBRE has been active in the German residential sector since 2003, offering valuation and advisory services to investors with a current team of around 30 residential specialists. ‘The segment and with it, our residential unit, has been growing year after year,’ said Henrik Baumunk, head of residential valuation at CBRE Germany.

Jones Lang LaSalle has also tapped into the residential market, offering valuation services for the last 10 years and advisory services since 2008. And the German subsidiary of the Chicago-based international consultancy group is not willing to surrender market share without a fight. Indeed, the opposite is true, said Frank Pörschke, CEO Germany at Jones Lang LaSalle. ‘We want to get a bigger slice of the pie and plan to expand our residential valuation and advisory teams in the coming years.’

For its part, Colliers International, part of FirstService Corporation, has pursued a strategy of acquiring controlling stakes in local players such as Colliers Schon and Lopez Schmitt in Frankfurt, and Trombello Kölbel Immobilienconsulting in Düsseldorf to strengthen its position in Germany. ‘The consolidation of all Colliers’ activities in Germany was a key part of our strategy in western Europe. We now have market leaders in Munich, Stuttgart, Berlin, Frankfurt and Düsseldorf,’ said CEO Doug Frye. Colliers provides a full range of brokerage services in Germany to local and international clients. Last year, the German operations generated around $60 mln in revenue.

'Germany is one of the strongest and most established markets in Europe, representing an enormous opportunity,’ said Chris McLernon, CEO EMEA for Colliers International, at the time of the acquisitions. ‘Having a market-leading position in Germany will allow us to accelerate our growth throughout the region and reinforce our capacity to serve clients locally and on a global basis.’

Cushman & Wakefield is also seeking to establish a stronger presence in Germany, where it currently has 180 staff in five offices in Frankfurt, Berlin, Düsseldorf, Hamburg and Munich. The firm recently hired Michael Morgan as partner and head of its investment team in Frankfurt. In an interview with PropertyEU shortly after his appointment, he said his two main goals were to build a stronger local investment presence in Frankfurt and create investment opportunities across Germany as a whole. The residential sector would be a key target, he noted. ‘I think 50% of our focus will be on offices and office developments and the remaining 50% on retail and residential investments and developments. Although the residential market in Frankfurt is not as hot as in Munich, the trend has been one of a substantial increase in rental values and purchase prices.’

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