Cluttons UK is not for sale, nor are any parts of the UK business, following on from the sale of its Middle Eastern arm to Savills.
“There is no part of the business that is up for sale, we have dealt with the Middle East, that was part of the plan that is now completed. There is no intention to sell any part of the UK business,” says managing partner James Gray.
He says the plan now is to expand using proceeds from the sale and potentially from its equity partners and majority shareholder RCapital.
“We have a clear plan about how we want to develop our business, and that focus is very much on the UK and investing in the UK,” says Gray.
“Selling the Middle East provides us with the ability to deliver on those plans and continue that investment into the UK.”
Savills bought the entirety of the 190-strong Cluttons Middle East business and its leadership team led by chief executive Steven Morgan.
The business is one of the most established in the region and has offices in seven locations, but it operated relatively independently of Cluttons UK.
The sale leaves the UK business with 250 employees centred on a core division of estate and commercial property management, with agency and consultancy arms around that.
The agency and consultancy arms will be the main areas of expansion.
Gray points to the hiring of James Beresford from Capita earlier this year to expand Cluttons’ investment brokerage team, alongside its focus on new proptech and the technology that backs up service lines.
“I very much hope and anticipate that within the next few weeks we will be making more announcements about more people coming across, and with that we will be hopefully opening an office in Edinburgh,” he says.
Restructuring
Cluttons is the world’s oldest firm of practising chartered surveyors, but it ran into difficulties due to the size of its pensions deficit, which reached £42.9m in 2016.
It was bought out of a pre-pack administration by turnaround firm RCapital in 2017 and has since undergone a major restructuring.
RCapital own just over 50% in Cluttons UK LLP.
Gray says that while RCapital will look for a longer term exit, there is no intention to sell the business now and it will continue to invest without selling other sections.
The Middle Eastern sale was always part of the turnaround plan, according to Gray: “When we started looking at the restructure, we put the position to them of where we saw the business developing,” he says.
“That’s what they have bought into… And to generate the way that we can expand the business was around the Middle East so that plan still needs to be completed, and they are very much committed to the business moving forward.”
Gray says if the opportunity is right Cluttons could buy smaller agencies. There will be no redundancies, and he says Cluttons has a place amidst the larger agency consolidations going on.
“Our focus is very clear: we are a small giant. In other words we have the strength and depth of 250 people, be we are also of a size that cares, and we are nimble enough to move very quickly.”
Middle Eastern plans
Savills has not previously had a Middle Eastern footprint and will be rebranding Cluttons during 2018.
The intention will be to continue with the existing platform in seven counties, rather than open any new offices, and expand those as necessary. It does not intend to wind down any arms.
“From our perspective, it’s about growth, not about losing people in the business,” says Mark Ridley, Savills deputy group chief executive.
“Steve has run a very effective business, very focused on making sure the right resources are in place. I don’t see anyone being lost in the process, its more about gain.”
The business, according to Morgan, has grown consistently for the past five years and managed to retain key staff despite economic and political headwinds and oil price fluctuations.
The focus ahead will be on growth areas such as logistics and hotels.
A big area of potential expansion will also be muscling in on the capital advisory markets, both to the UK and the rest of the world.
“I see that as key opportunity and strategy going forward and as something we are looking forward to getting out teeth into,” says Morgan.
“The Savills transactional teams are market leaders in many of the locations they operate in and that’s something we have not been able to plug into previously. What we do have is a very strong black book across the Middle East region, and contacts that are to die for to be honest.”
The business has offices across the UAE, Bahrain, Egypt, Oman and Saudi Arabia.
The leadership team transferring consists of:
■ Steven Morgan, chief executive
■ Harry Goodson-Wickes, head of Northern Gulf
■ Murray Strang, head of Dubai
■ Ed Carnegy, head of Abu Dhabi
■ Suzanne Eveleigh, head of Sharjah
■ Ihsan Kharouf, head of Oman
■ Richard Paul, head of professional services
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