CBRE to Acquire 60% Stake in UK Project Manager Turner & Townsend for $1.3B

Global property consultancy CBRE has beefed up its service offerings with a string of recent deals, including the planned acquisition of a 60 percent stake in UK-based project management specialist Turner & Townsend.

In the all-cash transaction, CBRE will pay £960 million ($1.3 billion) to acquire its share of the Leeds-based advisory, which will retain a 40 percent interest. The deal values Turner & Townsend at £1.6 billion and is expected to be immediately accretive to CBRE’s earnings, the partners said Thursday in a press release.

Turner & Townsend brings experience in managing projects and providing consulting services for clients in 46 countries in the areas of real estate, infrastructure and natural resources.

“This is a transformational transaction for our project management business in terms of both breadth and scale of capabilities,” said Bob Sulentic, president and chief executive of Dallas-based CBRE. “We see sizable secular growth opportunities in project management, which are being propelled by rising public and private infrastructure investment and the drive to a low-carbon global economy.”

Protecting Independence

The two parties said the deal preserves the existing leadership team, heritage, operational independence and partnership structure of Turner & Townsend, which reported net revenue of £665 million and adjusted EBITDA of £124 million for the 12 months to April.

Under the strategic partnership, the British firm expects to reap benefits such as the opportunity to expand its business in the Americas, where CBRE has deep occupier and investor relationships and a large market presence.

“The combined partnership of CBRE and Turner & Townsend will create the premier global provider of programme, project and cost management from day one,” said Vincent Clancy, chairman and chief executive of Turner & Townsend.

At present, 62 percent of Turner & Townsend’s net revenue comes from real estate projects, 31 percent from infrastructure work and 7 percent from natural resources activity.

Upon the transaction’s expected close in the fourth quarter, Clancy and the existing management team will continue to run the company on a day-to-day basis, with all services continuing under the Turner & Townsend brand. The firm’s financial results will come under CBRE’s Global Workplace Solutions (GWS) business segment.

Turner & Townsend will be governed by a new board of directors, consisting of three CBRE executives — Sulentic, GWS global CEO Jack Durburg and GWS chief transformation officer and COO Chandra Dhandapani — and three Turner & Townsend executives: Clancy, finance director Jeremy Lathom-Sharp and COO James Dand.

Pieces of the Puzzle

CBRE, which in 2020 knocked JLL from its perch as the top broker of commercial real estate investment deals in Asia Pacific, has spent the last few months acquiring specialists to help ramp up revenue as businesses prepare to emerge from the COVID-19 pandemic.

This week the group announced the acquisition of Singapore-based commercial design firm Wolf Studio, which provides design consultancy, design-build, feasibility studies and visual content planning to clients in the city-state and throughout Southeast Asia.

The directors of Wolf Studio will take on senior leadership roles within the CBRE Singapore design team led by Sebastian Mann, who also heads CBRE’s APAC design business.

Wolf Studio previously worked with CBRE in designing the agency’s Singapore office in Paya Lebar Quarter.

In June, CBRE revealed its acquisition of Union Gaming, a Las Vegas-based investment bank and advisory firm focused on the global casino gambling industry. Employees of Union Gaming, which also has a Hong Kong office, will join forces with CBRE’s existing Vegas-based gaming investment sales team to form a combined global gaming team.