Top Agents 2014 Survey: On the prowl

Julia Cahill |  | PrintDownload

Top-Agents-2014

The 2014 Top Agents survey shows an industry full of activity and confidence. Even the headhunters are busy as the battle for the best staff, as well as the most lucrative deals, hots up. Julia Cahill reports.

If last year’s Top Agents survey showed an industry whose fortunes had turned a corner, this year’s shows a sector that is back on top – and on the hunt for more talent to make the most of the upswing.

The collective turnover of the Top Agents league table has climbed by 17% on last year to £2.7bn, and expectations for 2014/15 are high.

“There is a huge weight of money keen to access the UK commercial property market, and this interest is intensifying as the economy improves,” says Guy Grainger, UK chief executive of JLL. “Clearly everyone is worried about rising base rates, but ultimately the spread between bonds and property yields is high by historic levels. In other words, there is still space for yields to compress further. Many are focussed on lack of quality stock, but we must not overlook the structural changes in retail, workplace and supply chain.”

It is a sign of just how far the market has come over the past two years that the Top Agents now have a new problem: nearly a third of firms say that the biggest threat to their business is staff retention.

For a sector that not so long ago was implementing large-scale redundancy programmes, hanging on to staff in the face of competition from their rivals is more of a concern than UK political uncertainty – despite the general election being only months away.

In fact, staff retention comes second only to pressure on margins as a business threat – and the two are clearly linked. As GVA chief executive Rob Bould explains: “The margins available in some parts of the business are improving following the end of the downturn. However, there is still a disconnect between profitability and compensation expectations which will lead to significant personnel changes between competitors.”

But for all the heat in the market there are also reminders in the survey responses that “the market is a spectrum”, as ES Group chairman Paul Proctor puts it, “with London over-heating at one extreme and the poorest regional markets failing to see much improvement from recessional levels of business at the other”.

“Activity in the regions has improved during the past 12 months and may improve further, although growth will vary dramatically between sectors and regions,” adds Gerald Eve’s head of finance David Stanton.

“Retail is the one sector which still continues to struggle for performance,” adds Cluttons senior partner Bill Siegle.

Estates Gazette delves further into the health of the agency world and presents those long-awaited league tables.

Top Agents by UK turnover

Rank 2014 Rank 2013 Latest UK t/over (£m) Previous UK t/over (£m) Change (%) Real t/over (£m) Year-end Latest UK profit (£m) Previous UK profit (£m) Profit basis Business structure
● 1 1 Savills 462.3 399.1 15.80% 174.1 Dec-13 45.2 37.3 Underlying profit before tax PLC
● 2 2 JLL 410 325 26.20% n/d Dec-13 n/d n/d PLC
● 3 3 CBRE** 305.7 252.4 21.10% n/d Dec-13 n/d n/d EBITDA Inc.
● 4 4 Knight Frank 242.5 200.3 21.10% n/d Mar-14 n/d n/d LLP
▲ 5 6 GVA 150 120 25.00% n/d Apr-14 n/d n/d EBITDA LLC
▼ 6 5 Deloitte Real Estate 144 141 2.10% n/d May-14 n/d n/d LLP
● 7 7 Cushman & Wakefield 129.7 110 17.90% n/d Dec-13 n/d n/d LLP
▲ 8 9 Capita 126 78.4 60.70% 6.3 Dec-13 7.7 n/d UKG PLC
▼ 9 8 Strutt & Parker 102 83.6 22.00% 41.1 Apr-14 n/d n/d APD LLP
▲ 10 11 BNP Paribas Real Estate 75.7 64.2 17.90% 5.9 Dec-13 n/d n/d LLC
▼ 11 10 Colliers International 70.2 67 4.80% 0.7 Dec-13 n/d n/d EBITDA LLP
● 12 12 Lambert Smith Hampton 63.5 62.8 1.10% n/d Dec-13 n/d n/d EBITDA LLC
● 13 13 Gerald Eve 42.1 37.7 11.70% 1.4 Apr-14 11.1 9.5 BPES LLP
▲ 14 16 Allsop 38.1 32.1 18.70% 20.3 Mar-14 9.8 6.1 BPD/ES LLP
▼ 15 14 Carter Jonas 37.4 34.2 9.40% n/d Apr-14 9.9 n/d BPD LLP
▼ 16 15 Bidwells 35.6 32.5 9.50% 9.5 Dec-13 10.2 8.3 BPD LLP
▲ 17 18 Montagu Evans 32.7 27.8 17.70% 2.5 Mar-14 14.6 11.4 BPES LLP
▼ 18 17 Cluttons 30.3 31 -2.30% 15.5 Mar-14 n/d n/d BPD LLP
● 19 19 GL Hearn 25.8 23 12.20% 8 May-14 3.3 2.6 UKG LLC
▲ 20 22 CVS 22.4 14.6 53.40% n/d Dec-13 6.5 1 EBITDA LLC
▼ 21 20 ES Group 21.2 19.7 7.60% 1.6 Apr-14 3.8 3.8 BPD LLC
▼ 22 21 Eddisons 16.4 15.8 3.80% n/d Mar-14 n/d n/d LLC
▲ 23 24 Sanderson Weatherall 14.5 13.2 9.80% 0.3 Mar-14 4.7 3.7 BPD LLP
▲ 24 26 Ryden 13.2 11.3 16.80% n/d Apr-14 n/d n/d BPD LLP
▲ 25 29 Rapleys 11.6 9.6 20.80% n/d Apr-14 4.7 3.3 BPD LLP
▲ 26 27 Alder King 11 10.8 1.90% 0.8 Aug-13 3.4 3.2 BPES LLP
▼ 27 25 M J Mapp 10.9 11.4 -4.40% n/d Apr-14 1.3 1.4 UKG LLC
● 28 28 Goadsby 10.5 10.7 -1.90% 7.4 Jun-13 0.2 0.3 UKG LLC
▲ 29 30 Aitchison Raffety 9.6 9.5 1.10% 1.6 Sep-13 0.5 0.1 EBITDA LLC
▲ 30 31 Matthews & Goodman 8.1 7.4 9.50% 1 Apr-14 1.1 1.3 BPD LLP
▲ 31 32 Strettons 7.7 7.1 8.50% 1.3 Apr-14 0.3 0.3 EBITDA LLC
▲ 32 33 Dacre, Son & Hartley 6.8 6.7 1.50% 4.4 Oct-13 0.2 -0.2 UKG LLC
● 33 Davis Coffer Lyons 5.5 n/d Apr-14 4.6 n/d EBITDA LLC
▲ 34 35 Mason & Partners 5.1 4.1 24.40% n/d Jun-14 0.1 n/d APD LLP
● 35 Beauchamp Estates 5.1 5 Mar-14 1.8 n/d UKG LLC
● 36 Hartnell Taylor Cook 5.1 4.8 6.30% n/d Apr-13 1.6 n/d BPD LLP
● 37 FG Burnett 4.2 n/d Apr-14 4.2 n/d LLC
▼ 38 37 Innes England 3.7 3.7 0.00% n/d Dec-13 n/d n/d
● 39 Trust Property Management Group 3.4 2.4 Mar-14 0.8 n/d EBITDA Non-listed plc
▼ 40 38 Lamberts Chartered Surveyors 3.1 2.9 7.60% 0.9 Feb-14 0.4 0.1 UKG LLC
▼ 41 39 Dron & Wright 3.1 2.6 19.20% n/d Dec-13 1.1 0.2 APD P
▼ 42 40 Kemsley 2.2 2 10.00% n/d Apr-14 n/d n/d LLP
● 43 Roger Hannah & Co 2 0.2 Mar-14 0.3 n/d UKG LLC
▲ 44 41 Barker Storey Matthews 1.9 1.9 0.00% n/d Mar-13 0.3 0.6 UKG LLC
▲ 45 43 Brown & Lee Surveyors 1.8 1.6 12.50% n/d Apr-14 n/d n/d
▲ 46 44 Robert Pinkus & Co 1.6 1.4 14.30% n/d Mar-14 0.6 0.5 BPD LLP
▲ 47 46 Underwoods 1 1.1 -9.10% 0.1 Jun-14 0.4 0.5 BPD LLP
Notes: n/d = not disclosed. EBITDA = earnings before interest, tax, depreciation and amortisation. UKG = pretax profit UK GAAP definition.  APD = pretax profit after partner drawings; BPD = pretax profit before partner drawings; BPES = pretax profit before partners’ equity share; BPD/ES = profit before partner drawings and equity share; Inc = incorporated; LLP = limited liability partnership; LLC = limited liability company; P = partnership. **Represents CBRE without hotels and FM

“The largest agents are clearly driving hard for growth… this could lead to more mergers and acquisitions”

James Routledge, Matthews & Goodman

The top four agents retain their positions with double-digit percentage growth in turnover. By this measure, JLL is the strongest performer of this elite group. Its turnover was up by just over a quarter, but not quite enough to knock Savills off the top spot.

Below them, however, there has been plenty of jostling for position. Capita now includes its property teams from all business units, hence a 60% increase in turnover, and overtakes Strutt & Parker. Among the other movers, BNP Paribas Real Estate enters the top 10 thanks to a 17.9% rise in turnover, while Colliers International (with turnover up 4.8%) drops down. CVS continues its swift climb, now entering the top 20 thanks to a 53.4% turnover hike.

More than 90% of the firms taking part posted an increase in turnover and nearly half saw turnover rise by 10% or more.

Against this backdrop, consolidation has continued apace. Firms including JLL, Colliers, GVA, Matthews & Goodman, ES Group, Carter Jonas and Barker Storey Matthews have bought smaller, specialist UK businesses over the past 12 months.

Almost 90% of the firms which took part in the survey said they expect the recovery to spur on further consolidation over the next year.

“The largest agents are clearly driving hard for growth, both locally and internationally given a market appetite for global capabilities,” says James Routledge, head of investment at Matthews & Goodman, which snapped up niche City firm Chapman Bates in May. “This should lead to more mergers and acquisitions, and fierce competition in central London markets.”

GVA’s Bould adds: “Further consolidation can be expected although this is likely to be focused on mid to
smaller-sized businesses. Top of the cycle sales by some of the niche operators will be a feature of the next 12 months.”

Allsop offers a different perspective: “Eastdil [the real estate subsidiary of US investment bank Wells Fargo] could eat in to the big firms’ market share. The niche and specialist firms will do well as sales volumes increase, debt becomes more available and the market returns to relative normality.”

£2.7bn

Total turnover of the EG Top Agents this year* (2013: £2.3bn)

4

firms experienced a drop in turnover (2013: 15)

21

firms experienced a turnover increase of 10% or more

88.9%

expect more consolidation across the agency sector (2013: 87.5%)

12

firms have added new business lines, opened new offices or bought businesses (2013: 12)

62.9%

are looking to buy one or more businesses in next 12 months (2013: 52.6% open to the idea of M&A)

20,990

staff are employed by the firms in this year’s table (2013: 20112)

29.3%

expect to open new offices in the current financial year (2013: 13.6%)

*NB this figure is based on the collective turnover of 47 companies compared with 46 in 2013 and the list of firms has changed slightly

 Ranking by UK turnover per fee earner

Rank 2014 Rank 2013 Turnover per fee earner (£000s) 2014 Turnover per fee earner (£000s) 2013 No of fee earners 2014 No of fee earners 2013 Turnover per head (£000s) 2014 Turnover per head (£000s) 2013 Total UK staff 2014 Total UK staff 2013
1 – Beauchamp Estates (Mayfair) 724 n/d 7 n/d 390 n/d 13 n/d
2 – Trust Property Management Group 488 n/d 17 n/d 80 n/d 43 n/d
3= 2 Robert Pinkus & Co 320 280 5 5 160 140 10 10
3= 3 CVS 320 256 70 60 80 60 266 245
5 5 Knight Frank 276 237 878 n/d 144 141 1680 1423
6 8 Cushman & Wakefield 270 226 481 555 200 168 649 655
7 10 CBRE 248 214 1235 1179 168 146 1819 1702
8 9 Savills 240 218 1928 1831 124 114 3718 3503
9 14 JLL 219 175 1872 1945 153 128 2678 2532
9 – Davis Coffer Lyons 219 n/d 21 n/d 144 n/d 32 n/d
11= 13 Allsop 206 175 185 189 148 132 257 250
11= 30 Mason & Partners 202 131 25 33 121 71 42 58
11= 16 GVA 202 171 889 961 113 100 1327 1204
14 11 Deloitte Real Estate 202 198 713 711 185 182 779 774
15 17 Montagu Evans 197 167 166 168 151 126 216 220
16 15 BNP Paribas Real Estate 191 174 396 370 128 108 593 597
17 21 Strutt & Parker 185 158 552 530 139 110 727 762
18 45 Lamberts Chartered Surveyors 173 180 18 25 100 87 31 33
19 33 Kemsley 170 125 13 16 67 59 33 34
20 18 Lambert Smith Hampton 167 161 380 192 85 82 750 770
21 19 Gerald Eve 163 160 258 319 122 110 346 343
22 20 GL Hearn 161 159 160 145 119 114 216 202
23= 25 Dacre, Son & Hartley 155 146 44 47 52 52 148 148
23= 22 Cluttons 155 154 195 303 111 113 274 275
25= 23 Eddisons 150 149 109 n/d 72 70 227 227
25= 26 Colliers International 150 142 470 687 117 107 600 624
27 24 Innes England 147 146 25 26 77 78 48 47
28= – FG Burnett 145 n/d 29 n/d 98 n/d 43 n/d
28= 31 Dron & Wright 145 127 21 22 109 1 28 28
30= 32 Bidwells 141 125 252 271 91 83 391 393
30= 29 Alder King 141 131 78 92 86 82 128 131
32 36 Rapleys 134 118 86 96 125 103 93 93
33 28 Strettons 133 134 58 62 84 78 92 91
34 34 ES Group 132 123 162 168 87 80 246 258
35 27 Underwoods 130 142 8 8 52 67 20 17
36= 37 Sanderson Weatherall 127 115 114 115 73 66 200 201
36= – Roger Hannah & Co 127 n/d 16 n/d 56 n/d 36 n/d
38 41 Matthews & Goodman 124 110 65 67 97 89 83 83
39 39 Ryden 120 113 110 101 88 81 150 139
40 38 Aitchison Raffety 119 114 78 75 81 76 156 108
41 – Hartnell Taylor Cook 117 119 43 40 57 62 88 77
42 43 Brown & Lee 116 107 15 n/d 83 76 21 21
43 40 Carter Jonas 111 112 336 306 78 80 480 429
44 42 Barker Storey Matthews 105 108 18 19 55 54 34 36
45 35 Capita 97 120 1295 652 88 83 1439 941
46 44 Goadsby 66 63 160 178 48 47 220 227

“The more important consideration when trying to retain staff is providing a truly supportive and enabling environment where people can fulfil their potential”

Brian Sloggett, managing director, GL Hearn

Turnover per fee earner figures have improved since last year for almost every firm. Beauchamp Estates, which specialises in luxury central London homes and does a small amount of commercial work, tops the table, followed by Trust Property Management, also a predominantly residential business. Two very different firms, but they show how effective businesses with a small number of fee earners can be in the residential sector. Below them, Robert Pinkus, the North West commercial specialist, and business rates specialist CVS are the strongest performers.

Some 19 firms recorded increases of 10% or more. The biggest improver was Liverpool and London-based retail specialist Mason & Partners, with turnover per fee earner up by 54% to £202,000. Kemsley, based in Essex and London, pushed its figure up by 36%, while both CVS and JLL reported figures up by 25%.

For firms that did see a drop, this tended to be minimal. The exception was Capita, where turnover per fee earner was down by 19% to £97,000 due to including its public sector teams for the first time.

Performance measured by turnover per head has also improved for most firms.

The other key theme evident is the upsurge in fee earner recruitment. Total fee earner numbers are up by 15.6% on last year to 14,056. That’s 1,900 new fee earner jobs.

However, this figure is distorted by Capita’s inclusion of property teams from all business units this year. If we strip out Capita and discount firms that have dropped out since last year (five firms) and those that have joined this year (six), our identical lists of 40 firms show a year-on-year increase of 11 % to 12,628 fee earners, or 1,248 additional fee earners. The contrast with the previous two years is dramatic: last year’s survey showed 360 new fee earners; and 2012 160.

As firms focus keenly on fees, total staff numbers including support staff have only inched up by 4.4% to 20,990 (or by 2% to 19,296 when accounting for Capita and changes to the list of firms participating).

With fee earners in such high demand, how will firms endeavour to hang on to them? Competitive salaries and bonuses are key, but many firms mentioned other tools too.

“The more important consideration is providing a truly supportive and enabling environment where people can fulfil their potential,” said Brian Sloggett, managing director of GL Hearn. “This is a combination of quality of work, physical working environment and early responsibility in their career where there is a culture to innovate.”

Colliers International UK chief executive Tony Horrell recommended letting people “use their personality”. Cluttons senior partner Bill Siegle said the firm is looking at “how we can best engage with our employees through listening and responding to their needs”.

Bonuses for new staff continue comeback and firms face talent shortage



For a second year, agents were asked if they had guaranteed a bonus for any new staff in the past 12 months. Almost 45% said yes – up from just over 40% the previous year. Christopher Mackenzie, UK director at recruitment firm Cobalt, says: “Guaranteed bonuses are not common but they are coming back for transactional agents because there is a shortage of candidates in the talent pool.”

For the first time this year, businesses were also asked what the toughest areas to recruit into were? One area came up the most: Eight firms said valuations and a further three said professional services. The valuer shortage is currently being investigated by the RICS, which found that the age profile of registered valuers on its database is skewed towards older members and that numbers coming through the APC to practice as valuers are low. Other firms highlighted the impact of the recession on the property sector as a whole. “There is a general shortage of people in the one- to five-year PQE,” said one.

How the survey was conducted

Online entry for the EG Top Agents survey opened in July. We have relied on figures supplied by respondents. Firms had to provide a figure for gross UK turnover, which must include some income from commercial work. Not all respondents answered all of the survey questions.

Eye on the horizon 

From profit and turnover expectations to business threats, what do the top agents predict for the next 12 months?


Close to 80% of firms say their turnover for 2014/15 will be up on the previous year, a clear sign of confidence in the recovery. Yet this figure is down slightly on last year, when close to 90% expected turnover to rise. This time round, more firms (20.5% compared with last year’s 12.2%) expect turnover to stay the same.


It’s a similar story for profit. Almost 70% of firms expect profits to be up for 2014/15, compared with 78% last time. Just over a quarter expect profits to remain static (2013: 21.4%) and there is a small note of caution, with a couple of firms expecting their profit to dip.


The era of widespread redundancies appears to be over for now. Less than 30% of firms said they had to cut staff, compared with around 50% the previous two years.


Job security continues to improve, with more than 90% of firms saying they have no redundancy plans for this financial year (2013: 87.2%).


Making the most of the healthier market, three quarters of firms say their staff numbers are rising this financial year – up from 70% last year. Just over 20% expect their staff number to remain the same, down from 25% last time.


Pressure on margins continues to be the biggest concern for the largest number of firms, but a new threat is rearing its head – losing your staff as the entire sector tries to recruit. UK political uncertainty is another big worry. Meanwhile, few firms see problems in the eurozone as their biggest business threat, but there is certainly concern. “Economic uncertainty on our doorstep will lead to reduced business and consumer confidence, which does have a marked effect on business decisions to expand or move property,” says Innes England director Matthew Hannah.

julia.cahill@estatesgazette.com