Reports that BNP Paribas is in discussions to acquire DTZ may herald a new round of M&A activity among leading real estate brokers in Europe, according to Paul Wessels, founding editor of PropertyEU, in the May edition of PropertyEU Magazine. Following the last wave of consolidation a decade ago, the time is ripe for the next phase, he said.
Last week it emerged that SAS Saint George Participation, the French family firm that bought a majority stake in DTZ in 2009, is in talks to take DTZ private, ahead of a possible sale of the brokerage firm to BNP Paribas. According to reports, the French bank is seeking to merge DTZ with its own property unit and list the combined business in a few years time.
Compared with its main competitors, DTZ's financial position has been sharply eroded in recent years. DTZ's share price has risen on the takeover speculation, but totalling less than $100 mln its market capitalisation is still far lower than that of its bigger international rivals such as Jones Lang LaSalle (market value $4.4 bn or some EUR 3 bn) and CB Richard Ellis (market value $9.3 bn).
In international terms, the gap between the leading global players is widening still further. While DTZ is strong in Asia, Canada, the UK and a number of other big European countries, the company is not a significant force in the US.
DTZ has also lost ground vis-a-vis the other main players. Savills has a market cap of over $800 mln, while the market value of Canadian group First Service which owns Colliers International is estimated at $1.16 bn. Cushman & Wakefield may not be listed on the stock exchange but its major shareholder Exor is one of Europe’s leading investment companies with a net asset value of around EUR 9 bn.
However, the champion in terms of its capital base is BNP Paribas Real Estate, the ambitious property consultancy owned by Europe's biggest bank BNP, which has a market capitalisation of some $70 bn. In financial terms, it would be only too easy for BNP to take over other companies, although operationally it may be a different matter.
The full article on the brokers appears in the May edition of PropertyEU Magazine. Click on the link below to subscribe | 
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