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edition 3 (238)
March 2019
Retail & leisure

Positively disruptive

The takeover of GVA by Canadian pension fund backed consultancy Avison Young

Nathan North

Positively disruptive

GVA, which was bought by Apleona around 18 months ago, has now changed hands again. As it merges and takes on the name of its new owner, we spoke to Andy Mottram and Michał Ćwikliński, respectively the Europe and Poland MDs of Avison Young, on how the merged company now intends to shake things up on the real estate services market

Nathan North, ‘Eurobuild CEE’: Could you tell our readers a little about who Avison Young are and what the merger with GVA entails?

Andy Mottram, principal, managing director, Europe, Avison Young: GVA, which is a UK-based business, has been acquired by and is now being merged into Avison Young, which is backed by Canadian pension fund CDPQ. So we are now in the process of putting these two businesses together. One is strong in North America, and the other in Europe – with a strong UK base. GVA also has a presence in Warsaw. Our plan is now to grow that presence further in both the UK and Continental Europe. We already have 1,500 people working in the UK.

Michał Ćwikliński, principal, managing director, Poland, Avison Young: With this merger we now have 5,000 people worldwide and CAD 1 bln [EUR app 670 mln] in annual turnover, making us one of the biggest commercial real estate advisories in the world.

And what does this mean for your Polish operations?

AM: This is a game-changing move. With my background previously working for JLL, I’m very conscious of how strong a market Poland is – but now we want to strengthen our presence here further. Our focus has traditionally been on investment brokerage and advisory services – but now we want to broaden that. CDPQ, as a pension fund, is patient with its money and looking for long term returns. So this is our long term plan.

And what has happened to GVA? Will it be rebranded as Avison Young?

MĆ: Yes. We have gone through many changes in recent years. About 1.5 years ago we set up the business in Poland as Apleona GVA. About a year later we changed the name to simply GVA. And now with this merger we are changing again with a much longer term view

So how is what you are now bringing to the table different from what your rivals offer?

AM: There is a now a big difference between JLL, CBRE etc. and what we are, which is a principal-led company. Our principals own the business – or at least part of it. So they approach it in a different way, as a long term investment. And this long term thinking is good for clients. Being principal-owned means that we are empowered to move quickly and flexibly to meet changing client needs and evolving markers.

So the approach you have now is radically different from how it was when you were Apleona GVA?

AM: Apleona is owned by EQT, a Swedish private equity company. For private equity, the standard model is to own a company for three to five years. But now with a pension-backed model, we are in a different place with long term capital to invest in our expansion and building our brand for the future

What form will this expansion have? I assume it will involve enlarging your team here and elsewhere. Where exactly? And in which sectors?

MĆ: Avison Young is now very much looking to expand its Continental European footprint significantly. In Poland we already we are very strong going forward. Here we are the number 4 in terms of sales advisory for investment sales. We also have an excellent technical and hotel advisory.

AM: We already do good business in Warsaw, Bucharest and five German cities, as well as with GVA Worldwide’s operations across Europe and Asia. And now we are already in the process of acquiring teams for Amsterdam, Stockholm, Paris and maybe Milan. What we are finding is that people in the UK and Poland are coming to us because of our focus on building trusted, long term relationships and our distinctive ownership model culture. We’re incredibly proud to be the business that the very best talent in the industry wants to work for.

And how will you go about this expansion? Through acquisitions?

MĆ: Yes. We aim to triple or quadruple our operations through acquisitions of teams and individuals, and through acquiring whole businesses who want to be part of a larger organisation.

AM: We have been doing this in the UK recently and are hoping to do more. We go where the client demand is. And now we want to build on our consultancy capabilities. In the UK we are very well known for our consultancy capabilities and are lead advisers on some of the most high profile schemes in the UK, while Avison Young is known globally for its agency activity. So it’s not just about buying any company for the sake of growth. We are being very targeted and selective in the companies and people we choose. They need to be the right fit culturally, and able to offer something different to improve what we can offer our clients. Our growth plan is strategic and long term.

So why this particular merger? What is it that Avison Young saw in GVA that it didn’t have already, apart from the geographical reach?

MĆ: Avison Young specialises in brokerage, whereas GVA is known for its consultancy. It’s these two specialisations that we are bringing together: leasing brokerage, in such segments as office and industrial, as well as valuation and other services. This enables us to provide a full service offering right across the property life-cycle, on a global scale. That’s a powerful offer.

AM: Mark Rose, the CEO of Avison Young, is actually going to relocate to London for six months to coordinate and support our growth over here, revealing the level of his commitment towards developing Avison Young’s ability to serve its European client base.

But aren’t you expanding into a highly competitive market? How do you expect to compete with the big boys? How do you hope to stand out from them?

AM: We see ourselves as a disruptive force in the positive sense of the word. Not one that’s trying to be big for the sake of it – we want to be the best at what we offer. Clients at the moment have got maybe a choice of one or two big players. What we want to give them is more choice. In the UK our people are recognised as being leading experts in real estate, and with Avison Young this is now being extended globally.

MĆ: And as we’re already number 4 in the sell market, we are aiming to be in the top league in other services and offer an alternative. But since we are principal-led, there is much more input from the senior level, rather than the ‘production-line services’ that other companies offer. Our principals are our owners, so the quality of the service matters on a more personal level, and enables us to adapt our business and services quickly in response to the needs of our clients.

AM: It’s certainly a very competitive market – but it’s big and clients want to have a choice. So as we grow our business it will be where the demand from the clients is – and Warsaw is certainly one of those places. The opportunity offered by working for Avison Young is the chance to own a stake in the company, to become a partner – that’s a huge attraction and hard to find elsewhere.

Coming back to the acquisitions of teams and firms, are you doing this already in Poland and the CEE region?

AM: I naturally can’t talk about the deals that are in progress right now, but those we are involved in are in Western Europe rather than the CEE region at the moment. But even here, only three weeks since the merger, people are already approaching us. This gives us a really good indication of the strong interest in joining Avison Young. MIPIM will give us a good opportunity to connect with people interested in working with us to grow and develop our business further

How important is a market like Poland for your business overall?

AM: Very important. If you look at Warsaw five or ten years ago, there were still some investors who didn’t want to come here. Now that simply isn’t the case.

MĆ: There was app. EUR 7 bln of real estate investment transactions last year, which is a huge jump from the app. EUR 5 bln a year earlier. So when you compare that to, say, Italy, which had app. EUR 9 bln last year, it’s clear that Poland is now a big investment market. We alone have app. EUR 0.5 bln of sale-side mandates as we speak. And a lot of this is due to the much greater transparency of the Polish investment market these days.

What about elsewhere in the CEE region? Are you planning to open offices and acquire teams there?

AM: The Warsaw market is still the first point of investment in the region, because it has become a truly global market. Our focus at the moment is on the cities we’ve already mentioned, but then the next wave will be into markets such as Prague or Hungary, if a good opportunity arises. ν

The two men at the helm

Andy Mottram, principal, managing director – Europe

Prior to joining Avison Young, Andy was a member of the EMEA board of JLL for 13 Years. During that period he held such roles as UK CEO and international director with responsibility for eleven continental businesses. He also led the acquisition of King Sturge and then oversaw the merger of King Sturge and JLL across all European markets.

Michał Ćwikliński, MRICS, principal, managing director – Poland

Michał has 15 years of experience with investment sales and acquisitions in the CEE region. Prior to taking the position of principal, managing director at Avison Young in Poland, he spent seven years at King Sturge, both in the London and Warsaw offices, and was also head of capital markets at Savills, where he built up the company’s Warsaw branch. During his career, he has concluded transactions worth more than EUR 3.5 bln.

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