Partnership with CBRE opens way for property services group Excellerate to compete with larger rivals
South African company opts for joint venture with the world’s largest property services provider
Excellerate, which provides property management services for a third of SA’s shopping centres and a number of offshore companies, has created a joint venture with the world's largest provider in that field, CBRE.
This will enable it to access North Africa and the Middle East for the first time in a partnership that will generate $100m (R1.37bn) in revenue a year.
Excellerate Property Services CEO Marna van der Walt said the joint venture would help the SA group to compete with large property service providers like Broll across a wider spectrum of commercial property markets.
Van der Walt’s unit is a business within Excellerate Holdings. The unit has 345 retail centres under management.
“We have grown substantially in the past five years and will now get exposure to North Africa and the Middle East where there is growing demand for property management services especially for occupiers of buildings, that are of the same standard as that in SA, the UK and so on,” she said.
She said Excellerate was keen to do more work for listed companies in Africa, as it already managed Kenya’s I-Reit’s properties and could now do work for companies like Grit, which owns assets across Africa including in Morocco.
CBRE, with headquarters in Los Angeles, is the world’s largest commercial real estate services and investment firm based on its 2017 revenue of $14.2bn. It operates in 110 countries.
The joint venture, CBRE Excellerate, would merge CBRE’s facilities management operations in Africa and the Middle East with a large portion of Excellerate’s businesses, including corporate real estate services, facilities management, valuation and project management services as well as property management services outside SA.
Excellerate Holdings CEO Gordon Hulley said the group had opted for a joint venture instead of an alliance like it had previously had with Cushman & Wakefield. There would be long-standing relationship which would pool resources so that the two groups could invest together.
“Our partnership with CBRE aligns with our core values and by structuring our relationship as a joint venture, rather than an alliance, we will pool our respective skills and expertise and foster intense collaboration, which will drive superior client outcomes,” said Hulley.
Following the formation which is expected to take place in April, Excellerate will end its affiliation with Cushman & Wakefield. It will also end its affiliation with Broll Property Services.
President of growth and emerging markets within CBRE’s Global Workplace Solutions (GWS), Tony Brearly said his team had been looking for an opportunity to be an active owner in a company that had exposure across SA.
GWS manages a business worth $800m with about 5,500 employees across more than 50 countries.
“We are very excited about what we can do with Excellerate. They are an established player with room to grow. We like the cultural fit and believe Excellerate will help us to roll out work place technology which we have used in various geographies, in SA,” he said.
In December, Broll ended its four-year partnership with CBRE. CBRE had planned to buy Broll but negotiations were not successful.