C&W posts record 2014 figures as potential buyers appear

Property adviser Cushman & Wakefield, which is on the market, has reported record profits and revenues in 2014 as potential buyers emerge.

Shanghai-based conglomerate Fosun International is considering a bid for Cushman & Wakefield, according to reports by Bloomberg and Reuters. Several other parties are also believed to have expressed an interest in the real estate services firm which is ranked in third place in PropertyEU's latest Top Brokers survey, based on investment transaction advisory in Europe during 2014.

Controlled by billionaire Guo Guangchang, Fosun Group was founded in 1992 in Shanghai. Its parent company, Fosun International, listed on the Hong Kong Stock Exchange in July 2007. The group has established four 'business engines': insurance, industrial operations, investment and asset management.

Fosun, according to reports, has big ambitions in Europe. It recently took a 5% stake in tourism group Thomas Cook and earlier took over French resorts owner Club Med. However, sources say any potential bid for Cushman & Wakefield is still some months away.

Record Figures
Shortly after the Top Brokers ranking was published, Cushman & Wakefield released its 2014 figures showing a strong improvement in the firm's performance. C&W reported gross revenue increased 14% 'to a record' $2.8 bn (€2.6 bn) for the year to end-December 2014, compared with $2.5 bn for the previous year. Adjusted net income rose 33.3% to $61.6 mln, compared with the year-earlier figure of $46.2 mln. Cushman & Wakefield said this was also a record.

Commission and service fee revenue across the business lines Corporate Occupier & Investor Services, Capital Markets, Leasing and Global Consulting increased by double digits in all three geographical regions: Americas (15.2%); Europe, Middle East and Africa (14.9%) and Asia-Pacific (25%).

Booming markets
'Demand from investors and occupiers continued to drive global real estate markets in 2014, increasing activity across our platform to record-breaking levels,' said Edward Forst, Cushman & Wakefield’s president and CEO.

'Our collaboration across geographies and services resulted in record revenue and profitability, which solidifies our position as a top-tier global real estate services firm. This performance was driven by a 42% increase in corporate occupier & investor services commission and service fee revenue, record leasing transaction volumes and completed appraisals with a value exceeding $1 tln for the third year in a row,’ Forst added.

Agnelli family
Cushman & Wakefield is majority-owned by Exor, the investment arm of the Italian Agnelli family who are best known as the controlling interest behind Fiat Chrysler. The Agnellis initially acquired 67.5% of Cushman & Wakefield for $565 mln in 2006, and currently own 81% of the company.

It was widely reported in February that the Agnellis have approved the appointment of Goldman Sachs and Morgan Stanley to market Cushman & Wakefield to potential buyers in a bid to cash in on the rising value of real estate services companies. Market sources say Cushman & Wakefield could command a price tag of $2 bn in today's booming market.

Cushman & Wakefield has not confirmed it is up for sale, saying only that the company and Exor, 'continually seek ways to further enhance the businesses, create value and further accelerate' its plans.

See the Top Brokers report in the March edition of PropertyEU Magazine for more on Cushman & Wakefield, its peers and other potential sale candidates.