T&T owner enjoys revenue bounce as clients react to Alinea deal

Turner & Townsend majority owner CBRE said turnover last year rose more than 10% to nearly $31bn (£26bn).

The Dallas-headquartered firm, which employs 115,000 people across the globe, although it doesn’t count T&T’s 10,000 staff in this number, said turnover was up 11% to $30.8bn (£25.7bn).

But net income was down 23% to $1.4bn (£1.2bn) with CBRE president and chief executive Bob Sulentic admitting that earnings had been hit by the “doubling of long-term interest rates, sharp equity market decline and the credit crunch that constrained investment activity for most of the second half”.

T&T sits within CBRE’s Global Workplace Solutions business unit, after the US giant paid £960m for a 60% stake in T&T 18 months ago, and the firm said T&T’s revenue in the fourth quarter of last year was $358m (£299m). It added: “The Turner & Townsend business continued to perform ahead of expectations.”

London cost consultant Alinea is now under the CBRE umbrella after T&T snapped up the firm last month in a deal believed to be worth around £35m.

The move has provoked mixed reactions and this week two of Alinea’s clients told Building they had worries about the deal.

Speaking on condition of anonymity, one major client said: “Many wonder if the skill of Alinea will be diluted by the bureaucracy of T&T. Great deal no doubt for Alinea partners [but there are many] questions about the role of the major QS. Are costs now based on last job and what the book says or is it real knowledge?”

Another added: “They [Alinea] have annoyed some of their clients, whatever they say in public, by what they’ve done.”

>> Also read: Why Alinea turned its back on independence and signed up with T&T

However, Richard Steer, chair at Gleeds, said: “I can understand why Alinea went for the deal. It’s a pragmatic move that gives them access to markets that a small firm just can’t achieve on its own. We are seeing a trend for consolidation among cost consultants which is not that surprising in the current market.”

Earlier this month Peter Oosterveer, global chief executive at Arcadis, said: “I can’t say I am surprised – if you look at our space, it is extremely fragmented and it has plenty of room for consolidation, whether that’s in building or infrastructure or environmental work, this business will continue to be marked by further consolidation.”

The enlarged business will be run by Alinea co-founder Iain Parker who told Building the deal “propel[s] our business forward by a decade overnight in terms of what we’re trying to do”.

Alinea employs around 110 people and is expected to post a turnover of £20m in the year to April.