This article is from the Australian Property Journal archive
CBRE will combine its project management business with Turner & Townsend, its majority-owned global subsidiary that provides program management, cost consultancy and project management services.
CBRE will ultimately own 70% of the combined Turner & Townsend/CBRE Project Management business, with the Turner & Townsend partners holding the remaining 30%.
CBRE acquired a 60% ownership interest in Turner & Townsend in 2021, and since then Turner & Townsend has grown revenue at a compound rate of more than 20%.
CBRE’s entire Project Management business, including Turner & Townsend, produced net revenue of approximately $3 billion in calendar 2023. Since 2021, combined net revenue has grown at a double-digit annual rate with an approximately 15% net profit margin.
The net synergies derived from bringing the two businesses together are expected to generate approximately $0.15 of incremental run-rate core earnings per security by the end of 2027, an amount they expect to grow over time.
The cost of the incremental investment in Turner & Townsend/CBRE Project Management is approximately $70 million, exclusive of deal costs.
Unifying the business will create an offering of 20,000 employees serving clients in over 60 countries.
“Powerful secular trends, particularly increased spending on infrastructure, green energy, and employee experience, are growth catalysts for this business and we are well positioned to capitalize on this significant opportunity,” said Bob Sulentic, CBRE’s chair and chief executive officer.
The combined business will be led by Turner & Townsend’s CEO Vincent Clancy, who will continue to report to a board controlled by CBRE and comprised of senior executives from both CBRE and Turner & Townsend.
“Our ambition since joining forces with CBRE in 2021 has been to create the premier, differentiated program, project and cost management capability globally,” Clancy said.
“We have made exceptional progress towards this goal and our revenue and profit have grown significantly in the last three years. Turner & Townsend’s momentum will continue to grow with the combining of two great businesses into one integrated, pure play project management capability.”
Clancy will be appointed to the CBRE board upon close of the transaction, expected around year-end.
Beginning in 2025, CBRE intends to report Project Management results in a new segment separate from Global Workplace Solutions.
Turner & Townsend operates across three business segments globally, being real estate, infrastructure, and energy and natural resources.
