Shanghai-based investment group Fosun is considering an offer for property consultancy Cushman & Wakefield, which was put up for sale by Italy’s Agnelli family in February.
The current owners are asking $2 billion for the world’s third-largest real estate services firm and Fosun has been in an acquisition frenzy lately as it purchases everything from New York’s Chase Manhattan Plaza to France’s Club Med.
An acquisition by Fosun would fit with the company’s focus on real estate investments, as well as following a trend of deals for property agencies after a US private equity firm scooped up DTZ this year, and Cushman itself acquired New York-based firm Massey Knakal.
Goldman and Morgan Stanley Marketing Cushman
The potential bid by Fosun was revealed today in a report by Bloomberg, but seems like a natural event after Exor SpA, the investment firm belonging to Italy’s Agnelli family, approved the hiring of Goldman Sachs and Morgan Stanley to market the 16,000 person property agency last month.
Exor has said that it prefers a private buyer and has ruled out selling Cushman & Wakefield to a competing agency – making private equity firms the most likely acquirers if a deal is to be completed.
Is Fosun Acquiring Another Platform?
Fosun, which is controlled by billionaire Guo Guangchang, is only one of several potential bidders who are said to have expressed interest in Cushman & Wakefield, but the deal would fit the Shanghai company’s profile and preferences.
Although Fosun has made headlines for acquiring Club Med for €939 million ($998 million) in February, as well as for buying insurance companies in the US and Europe, the investment firm has a determined liking for real estate.
Fosun thrust itself onto the global property scene in late 2013 when it spent $725 million to acquire New York’s One Chase Manhattan Plaza (which it has since rebranded as 28 Liberty), and the company has also made a string of asset acquisitions across Tokyo, Sydney and Athens. More recently, Fosun is said to eyeing London’s Grosvenor House Hotel, which is on the market for $762 million.
In addition to having built up one of China’s larger property developers, Forte, Fosun has also shown an interest in developing platforms for real estate in other countries, by purchasing Japan’s Idera Capital Management, while it reportedly is on the lookout for a similar deal in Australia.
By purchasing Cushman & Wakefield, Fosun would be taking advantage of an opportunity to build a real estate platform on a global scale, which could also assist the investment firm in acquiring and disposing of properties internationally.
Could Fosun Help C&W to Grow in China?
In shopping for foreign firms, Fosun has historically looked for companies that it could help to gain a stronger foothold in China. After buying Greek fashion brand Folli Follie for example, the investment company helped the retailer to rapidly expand their store network on the mainland.
C&W has already established offices in Beijing, Shanghai, Guangzhou, Chengdu and Shenzhen and employs more than 850 team members nationwide. However, to date no international property agency has been able to capture more than a percentage point or two of the total commercial real estate transactions occurring in the country.
An acquisition by Fosun could potentially provide Cushman & Wakefield with access to local players and on the ground information that could otherwise be difficult for international companies to achieve in China’s notoriously opaque real estate markets, and give it an advantage in its race with competing agencies.