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A welcome to DTZ-world for Cushman employees

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Rivals are convinced that Cushman & Wakefield chief executive, Bruce Mosler, was kicked upstairs to co-chairman two weeks ago by the Italian owners who want to take a firmer grip on the loss-making business. An interview with the jovial 52-year old in the New York Times today does little to dispel that view. "If being kicked upstairs is continuing in the role until we find the right person... and going back to what you're passionate about, then that's O.K."

Rivals are also convinced that the Agnelli family, which controls 68% of the world's third-largest agent through a company called Exor, is seeking what might be called the DTZ solution. In other words "the right person" will be a grim-faced banker like Paul Idzik, the former chief operating officer of Barclays who is now doing his damndest to turn around DTZ into a profit-making business.

Unlike DTZ, C&W suffers ( or benefits) from a lack of transparency in its accounting. But the few brief lines devoted to C&W in the Exor accounts show the 15,000-strong business lost £46m in the first half of 2009 on top of a small loss last year - and that Exor had to provide a $50m loan instead of reaping profits on the purchase made in 2006.

It would be nice to think that a new CEO would usher in a new era of financial transparency. But with an Italian parent, don't bank on it. What is more likely to happen is that Mosler's go-for growth policy that was dashed by The Crash will be replaced by a crawl for profits. If the guys at C&W in the UK want to know what this means - ask the guys at DTZ. It's much less fun.

Creating better places for battery cars

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Surveyors who make a few bob from negotiating leases in the mobile phone mast market might like to start thinking about the advent of a grown-up electric car market. All the major motor manufacturers will be introducing battery-powered cars in the next 1-5 years.

But where do you plug them in? At home, obviously - but someone is going to have to provide for that away-from-home boost. Is there a new roadside niche market in providing electric docking stations? Is there a market for an entirely new sort of real estate: battery-swapping stations?

The thinking behind this concept is that you glide into said station and an operative hoists out your depleted battery and hoists in a fresh one.  This may sound far-fetched - and probably is. But Renault is apparently building cars with removable batteries.

If you can locate a copy of the 24th August edition of the New Yorker magazine, have a look at the story on a market that will be churning out 70 million electric cars a year by 2020, say the optimists. One of those is Shai Agassi who runs a Silicon Valley company called Better Places.

The 41-year old Israeli is already working to install 100 000 charging posts and building 100 battery-switching stations in Israel and is planning similar networks in Denmark, Australia and Hawaii.

Like mobile phone masts, there has to be a real estate angle - hasn't there?

Body sacrifice saves agents' shrinking ships

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Today's second quarter figures for Jones Lang LaSalle are not good; but not quite as bad in revenue terms as CBRE, which announced last week.

At JLL global income fell 13% to $576m in the three months to June compared to the same period last year. At CBRE the fall was 27% to $955m. At both firms, small profits turned into small losses.

In Europe performance was spookily parallel.  JLL's revenues fell 39% to $143m. At CBRE the revenue fall was 41% to $176m. But both produced matching cost cuts, presumably by sacrificing staff. Operating costs at JLL were down 39% to $144m. At CBRE the cut was 41% to $172m.

CBRE's European chief Mike Strong was praised here for running a tight ship. Clearly JLL's new European captain Christian Ulbrich and his predecessor Alastair Hughes have also thrown plenty of costly bodies overboard.

What you have now are two firms just 60% of the size they were 12 months ago in Europe and barely breaking even. But considering the last 12 months were probably the worst in property history, not a bad result, except for those thrown overboard.

DTZ: results bad, outlook brigher

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Paul Idzik.jpgDTZ's results out this morning are of course awful: a £79m loss on turnover down 18% at £364m. That will surprise nobody. 

The previous top management, led by the now departed Mark Struckett and the still-mysteriously-in-post chairman Tim Melville Ross, made quite a hash of things.  

But what plans has the new hard-boiled chief executive Paul Idzik (pictured left) to pull this still fine firm out of the mire?

Here are Idzik's stated objectives- with translations. He wants to:

 

         ·         "Complete the restructuring" -  sadly, more sackings to come

·         "A united, lean global platform" - oh, dear, more money on IT

·       "Organic growth"- thank goodness, no more stupid takeovers

The former chief operating officer of Barclays does not hide his dismay at the previous lax financial controls, saying DTZ is now going for "stringent, accountable and transparent reporting".

But Idzik rightly praised the relatively solid performance of the consultancy side of the business and the performance in the Far East - a place where the new man seems inclined to expand, organically.

Diminishing values ......

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The normally good natured bitching between agents is descending into bitterness in some cases; specifically when it comes to slashing the prices of providing valuations to clients.

The accusation is that cash-strapped firms are literally buying the work at prices far below the cost just to satisfy the bank manager.

"We simply can't compete," says our fed-up informant. "X will buy work for £10,000 that should be priced at £100,000." Surely not? Any examples gratefully received.

About the Author

Peter Bill

Peter Bill edited Estates Gazette between 1998 and early 2009. He writes a column for the Evening Standard each Friday and is working on a book about the commercial property market.

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