DTZ to expand activities in Italy, says new head

Real estate advisory firm DTZ is seeking to strengthen its business in Italy with new hires and the expansion of its services offering, according to Douglas Babington Smith, the newly-appointed head of DTZ's Italian operations.

‘My appointment reflects the fact that DTZ has a long-term vision for the Italian market and is looking to invest further in the sector, after opening offices in the country in 2000,’ Babington Smith told PropertyEU. ‘We would like to expand our offer in terms of services in the future. We want to grow the retail business next year and then develop our project development services, property management and even luxury residential activities at a later stage.’

Based in Milan, Babington Smith started in his new position at the beginning of October taking over from Paolo Insom who has been with the company for the past 14 years. He joins from JLL where he was previously head of office capital markets in Italy.

DTZ, with offices in Milan and Rome, currently offers a range of services in Italy including valuation, advisory, office leasing, corporate solutions and capital markets.

The global property advisory is currently in the process of being demerged into a stand-alone company after being acquired by UGL, a Sydney-listed global diversified services company, in December 2011 for €90 mln. DTZ is now headquartered in Los Angeles in the US.

The demerger will have an impact on the various country units and DTZ Italy in particular hopes to be able to finance its expansion plan once the operation is completed, Babington Smith said.

‘We are in the process of restructuring our global business which also means restructuring our activities in Italy. DTZ will have the possibility to invest once the demerger is complete because we will be able to raise capital on the capital markets after listing our operations. Therefore, the most ambitious plans will be executed in one or two years when the demerger is complete.’

Looking forward, Babington Smith would like to expand the company’s core business, particularly agency and valuations. Most recently, the company has also hired Lelio Manna from CBRE to head its corporate solutions team. He formerly covered the position of senior director in the Milan agency business of CBRE.

Commenting on the outlook for the Italian real estate market, Babington Smith reckons the timid recovery seen in the real estate market may still fade away if not sustained by the government. ‘In terms of the macro-economic situation, I think we will see another 12-18 months of uncertainty and challenging conditions after which the market will "wake up". However, real estate remains one of the easiest assets for governments to tax and I do not rule out the possibility of new fiscal levies.'

The key issue in the real estate sector remains, however, the inability of the Italian financial sector to provide liquidity, he added. ‘Italian banks are not lending because they have not sorted out the problems with their legacy assets and they are not willing to reprice or restructure them. I believe that only a recovery of the real economy can unlock this situation.’