Bilfinger Real Estate Germany
Aydin Karaduman - Bilfinger
“In our new division, we have gained a lot of know-how in financing, managing, and supporting complex infrastructure projects and public facilities,” said Aydin Karaduman in a statement at the time.
The Mannheim-based international service and engineering group Bilfinger was never going to just carry on plowing its (highly profitable) facility services furrow once ex-Hesse state premier Roland Koch decided to stop tilting at political windmills in Berlin and quit politics for the more lucrative world of private industry.
Under his leadership of the old Bilfinger Berger, the group has rebranded itself as Bilfinger, and is now aggressively expanding its service offering across the real estate value chain, and into new geographic markets. The company’s takeover offer for UK property consultant GVA Grimley, which is likely to be closed by the end of June, will provide a springboard for property subsidiary Bilfinger Real Estate to compete with the world’s biggest real estate advisors for global mandates.
Bilfinger, with €8.5bn in annual revenues, was known to be on the lookout for a UK brokerage partner to accompany its rapidly-growing real estate business. GVA had been going through a financial restructuring and had brought in consultants Canaccord Genuity in 2012 to review its strategic options – a move which attracted the attention of Bilfinger. According to Bilfinger Real Estate CEO Aydin Karaduman, "This deal is part of a strategic plan to develop a leading international real estate consultancy and management offer with representation in every major commercial centre in the world.”
The deal will see GVA combine with Bilfinger’s real estate advisory, which generates annual turnover of €160m and employs some 1,500 real estate professionals. This output volume is expected to double as a result of the merger. The property business sits within the larger Bilfinger Building and Facility division employing 22,000 and turning over around €2.3bn a year.
In the year to end-April 2013 GVA reported turnover of Stg£147.3m, a 5% increase on the previous 12 months, and made pre-tax profits of £7.8m. It said it has 12 offices around the UK and has 1,300 staff, of which 700 are fee-earners, on its books. GVA offers consulting services such as project management, valuation, planning and transactional services, and its clients include occupiers, developers and public sector clients such as local authorities and government departments.
At the end of 2013, Bilfinger had already acquired facility services provider Europa Support Services, a company specialized in technical and infrastructural services. That acquisition boosted the annual volume of its facility services activities in the UK and Ireland €35 million to over €200 million.
In a big internal intra-company move at the beginning of this year, Bilfinger Real Estate then subsequently took over from its parent company the infrastructure and transport asset management units of the Group’s dissolved project investments division. The move raised the firm's managed assets by €7bn to €40bn.
That division, Bilfinger RE Asset Management, manages 35 transport and infrastructure projects with a combined valued of €7bn. The firm operates from London, the Rhine-Main region in Germany, Toronto and Melbourne. The takeover has added infrastructure to the types of use previously managed by Bilfinger Real Estate (office, shopping, commercial & logistics, residential and hotel).
“In our new division, we have gained a lot of know-how in financing, managing, and supporting complex infrastructure projects and public facilities,” said Aydin Karaduman in a statement at the time. “In addition, it gives us important access to the real estate and financial markets in Australia and North America, which we are planning to expand further. The local branches will help us start dialogue with existing customers as well as potential new clients and market participants and convince them of our one-stop-shop offering.”
However, the acquisition of GVA – assuming it goes through without a hitch in June - gives the Bilfinger Real Estate business a major leg-up on the international ladder. As Karaduman says, "Our goal is to become one of the leading international real estate service providers, with the ability to support the investment activities of our clients across borders and to manage their real estate portfolios anywhere in the world. With London as Europe's financial centre, the UK is among the three largest investment and property markets in the world. We want to – and have to – have a presence here to achieve our goal. In addition to giving us a strong, nationwide presence in the UK market, the strategic merger with GVA will provide us with critical access to international investors and allow us to take on international management and consulting mandates."
