Realty giant eyes China, acquires Singapore firm

Cushman & Wakefield, a leading global real estate services company, announced on Wednesday that it has agreed to acquire Singapore-based project management specialist company Project Solution Group.

The deal will raise the company's presence in China market, analysts said.

The acquisition is part of the firm's global strategy to strengthen operations in the Asia-Pacific region, according to a company statement.

Project management provides construction and portfolio oversight services, including management, capital planning, design and execution. Project types vary from office buildings, commercial and retail spaces and industrial centers.

Richard Middleton, executive managing director of C&W's Corporate Occupier and Investor Services in APAC said, "With the addition of PSG to our team, we are now able to offer three distinctive services -- in addition to the classic project management consultancy that we have been offering to date, we will also be able to offer design, through our own in-house design team, as well as a full turn-key solution, by transferring most of the design and all the construction risks to C&W at the start of the project."

PSG, headquartered in Singapore, offers professional interior design, project management and construction services to over 40 multinational corporations across the Asia-Pacific region and the Middle East. The company was co-founded by Australian Mike Harrison, who will become the executive managing director of C&W's project management services in Asia.

Of the 70 members of staff worldwide for PSG, about 30 will be integrated with C&W's China offices, said David Cain, executive director Project Management, North Asia. C&W now has around 700 employees in China.

"Back office growth in cities outside of China's main hubs is fuelling a push to second and third-tier cities. Our clients are focusing their attention on expansion into the Pearl River Delta, so PSG's strength in these markets perfectly matches our clients'needs," added Cain, who declined to disclose the exact value of the deal.

Andy Zhang, managing director, China said,"The growth in the China economy and robust urbanization development across the country are fuelling strong demand for new and professional project management models. The Chinese market is expected to have huge demand for this model in the coming years."

"In the past few years, we have been growing at double-digits. Our headcounts grew about 35 percent in the past two to three years," said Zhang.

"This is an indication that how aggressively we are growing in China and Asia region."

According to Zhang, China and the Asian market only took a small share of the C&W’s roughly $2 billion global revenue. But the headquarters is bullish on China's market. Multinationals and Chinese local corporations each took a half of the company's business.

Industry observers said the latest acquisition is a rare case in the real estate service industry in the past two years. Before this, the most prominent M&A case in Asia was Australian firm UGL Ltd's acquisition of DTZ in late 2011.

This latest acquisition also followed C&W's announcement earlier this month that it had expanded its Greater China operations into Taiwan by opening its first office in Taipei.

Richard Middleton said that PSG and C & W complemented one another. The former has been looking to expand in Singapore and China, both markets where PSG already has strength in numbers; and where C&W already has a mature team, such as in India, PSG would have a greater depth of expertise to tap into.

Commenting on the prospect of China's commercial real estate sector, Zhang said there is robust demand from corporate occupiers, be it office buildings, retailer centers or hotels. But on the other side, there is a huge oversupply in second and third-tier cities.