Alan Day is one of a bevy of property agents plotting expansion into project management and he’s putting his money where his mouth is.

Basking in the sunshine on the rooftop of a property agent’s HQ, a tall and suntanned man is outlining a plan to expand his project management operation that would put shivers up the spines of rivals in the construction sector.

Slick-suited Alan Day, who runs project management at commercial agent Cushman & Wakefield Healy & Baker, says: “We have identified project management as one of the areas we should be expanding quite dramatically. We will hire people from anywhere and we pay better than the pure construction sector would.”

All the commercial agents that QS News spoke to revealed similarly aggressive plans to expand their PM operations. It all suggests that QS and dedicated project management firms should be watching their backs as property agents step up the competition for both contracts and the best staff.

Cushman & Wakefield already has a decent-sized team of 32 people working in project management in the UK but it is looking to add around 10 PMs within 12 months. Of the project management work it does, 50% is fit-out, 30% refurbishment and alteration work and 20% new build.

Day says the firm wants to start winning more projects in the City, and is looking to poach an existing team of six City project managers, or possibly acquire a small business.

I interview someone every week and I’ll take the right person on whether there’s a vacancy or not

Alan Day, partner, Cushman & Wakefield

He also wants four more project managers to open a PM office in Manchester and add PMs to the firm’s Glasgow office.

Day seems pretty serious about finding quality people. He says:

“I spend my whole life interviewing people. I see someone every week and I’ll take the right person on whether there’s a vacancy or not.”

Another agent, Colliers CRE, has 12 project managers, but it is recruiting a further two for its London office and plans to increase the PM team by 50% within the next year or so. Some of the recruits are expected to come from QS firms.

We are broadening our exposure to both commercial and public sector clients

Miles Thompson, head of project management, King Sturge

King Sturge has around 20 project managers throughout the UK and is looking to hire another two at mid level in London. Savills also reveals it plans to grow its PM operation.

Other agents are already boasting new hires, some from the construction sector. Jones Lang LaSalle took on David Brown, formerly of Trench Farrow, to lead its 30-strong PM team this summer.

CB Richard Ellis, which has about 20 PMs in London and the regions, recently hired PM Nick Lambert as a director. He joins from Donaldsons, the surveyor and property consultant. “We are building up the (PM) team, we are constantly looking for people, especially at senior level”, says David Hitchcock, managing director of the CBRE management consultancy team, which includes PM.

The agents are also winning decent jobs. CBRE is the project manager on the Alsop Architects-designed Palestra building next to Southwark tube station, London. At King Sturge, head of project management Miles Thompson says: “We are continuing to grow the team and broaden our exposure to both commercial and public sector clients.” He says King Sturge has an increasingly strong hit rate when applying for work advertised through the Official Journal of the European Union.

The agents were taking more and more of the market

Andrew Matthewman, head of project management, Colliers CRE

King Sturge undertakes project management in all sectors and is involved in projects worth anything from £500,000 to £200m plus. Projects currently under management include the £224m redevelopment of the States of Guernsey’s education estate, where it is providing a strategic management role as well as the management of a number of the individual schools.

So why are the agents so keen to muscle in on project management? The simple answer is that it is lucrative. Cushman & Wakefield was advised by an independent analyst that it should significantly expand its PM operation in the UK and globally. “It’s considered profitable work compared with lower margin work”, says Day at Cushman & Wakefield. “It’s difficult to grow market share in the transactional brokerage business and much easier to do it in project management.”

He adds that PM is now a “must have” for property agents, a key service that clients expect. On top of that, the agents are usually the first to talk to a client who is considering a property market move of any kind, so they are perfectly placed to grab the project management contract before their construction sector rivals even get a look-in. Once the agent’s got his foot in the door, Day points out that the client need not go anywhere else for the full suite of services that agents are now offering, which range from cost control, to health and safety, to mechanical and electrical services.

It all suggests that property agents are very serious indeed about project management.

QS and project management firms may have to come up with new ideas if they are to remain competitive.

How serious is the threat?

Graham Harvey-Browne is the managing partner of 60-strong QS and project management firm CM Parker Browne.

“I do see property agents doing project management as a threat”, he says. They are at the right place to get work, they are there when the deals happen. Basically they are higher up the food chain. They are also going to attract good people and they have the money to retain them.”

But the small construction sector PMs have their own edge, he says. “We are holding our own. And property agents do struggle on building projects because they don’t have the technical background.”

He adds that with smaller companies the people that win the jobs will also work on them, unlike at big firms where he claims that once the contract is in the bag the real work is often passed down to more junior staff.

Leading property agents and the value of the jobs they project managed in the year to September 2005:

King Sturge: £800m

Colliers CRE: £500m

CB Richard Ellis: £200m

If you are a project manager in the construction sector you could earn up to 20% more by switching to the property sector.

QS Andrew Matthewman is among those who have made the jump. A year ago he left Gleeds, where he led project management in London, to join property agent Colliers CRE as head of project management.

He says: “Three or four years ago it was very much a QS and PM dominated world. But since then the agents have got their act together in terms of providing a high level of service. I saw the agents were taking more and more of the market.”

He was also drawn to the greater variety of work, which he believes the agents enjoy, plus their habit of getting involved on projects earlier, which he says allows more influence over how a project is run.

Cushman & Wakefield’s Day says: “Compared to QS firms, we pay project managers 5 to 10% more. Compared to contractors, 10 to 20% more.” The figures include bonuses, which are paid to staff at all levels based on performance. “For a junior guy on 30K, a bonus could add 20% to his salary,” claims Day.

It’s not only about the money, he adds. “We're a lot less regimented than construction firms. There’s more creativity.”

He says: “We can offer (new recruits from the construction sector) quick exposure to large corporate clients. It’s quite exciting but also quite scary for them.”

Day also highlights his firm’s swanky premises. Here, uniformed receptionists oversee a brightly coloured open-plan meeting area. “This is our hub for meetings, there are no barriers, so you get to bump into people and build contacts.”

The offices too are all about open planning and hot desking. Day says: “There is no staff hierarchy here, the boss might be sitting next to a graduate.”

Day says that the social side of the firm is another attraction. Every 20 months the entire staff is taken to a location in Europe, such as Barcelona, Paris and Prague.

Source

QS News