Four commercial real estate agencies have combined efforts in the hope to make a significant impact on the Sydney market, with assets under their management worth around $1.5 billion.
The Announcement:
A consortium of four major commercial real estate businesses has been formed to create Sydney’s newest and one of the largest commercial real estate sales and leasing groups.
Called X Commercial, the group combines LJ Hooker Commercial offices in South Sydney and the Inner West, David Brown’s DB Property in Surry Hills and the newly acquired PCC agency in Chatswood.
The new group will have assets under management worth $1.5 billion, with 1,500 commercial, industrial and retail properties under management and a dedicated commercial finance division, which has already facilitated more than $100 million in loans in its first nine months.
X Commercial’s Chief Executive Officer is the very experienced Daniel O’Brien, who has worked in senior positions at CBRE, Knight Frank and for the last five years with LJ Hooker Commercial, as well as Alex Bennett as Chief Operating Officer. David Brown has owned the one of the most active and largest agencies in the city fringe over the last 25 years.
Mr O’Brien said: “There is no doubt the power of the large global firms in the local Sydney market is not what it was 10 years ago. We believe this decline is due to a combination of the growth in social media, which has levelled the agency playing field, coupled with too much bureaucracy and very high levels of staff turnover born from leaders with no equity”.
“Meanwhile the franchise model is also failing as there are ever growing fees for franchisees and few sales leads provided by head office, lower value for money for clients, as well as a lack of leadership and teamwork among offices. Strict geographical rules and barriers create a model where agents accumulate higher costs when they succeed”, he added.
Mr O’Brien said X Commercial had hit the ground running with 21 specialist commercial sales and leasing agents in four major metropolitan locations from the north to south of the city, with a range of experienced agents and other businesses expected to join the group over the next few months.
He added: “We are on the acquisition trail for agents working in global firms and franchise owners who desire an equity stake in their own firm. By joining X Commercial, agents can immediately become part of a large, rapidly growing agency business with scale to help them increase their sales, profits and grow their asset base – a rent roll”.
The group plans to expand its footprint further into Metropolitan Sydney with the acquisition of more offices to reach a target of 15 over the next five years, with plans to soon expand in the highly lucrative Eastern and Western parts of Sydney.
David Brown, principal of DB Property (to be re-named X Commercial) said: “I am excited to be pooling our combined resources, which includes a database of about 90,000 commercial owners, investors, tenants and developers.”
“X Commercial already manages many office towers, industrial sites and retail locations on behalf of mainly private or high net worth clients. With a pipeline of sales already in place, especially in Surry Hills, and an active agency team we can now offer our clients a unique X factor in Sydney.
“The industrial sector is currently experiencing boom-like conditions, while the office market has bounced back with staff back returning to their workplaces, while retail remains soft but with green shoots appearing”, he added.
X Commercial will be a full-service commercial agency, offering specialised advice for owners, buyers, developers, tenants, plus asset portfolio and facilities management, as well as a dedicated commercial and development finance division.
Mr O’Brien said: “Our corporate model is not designed to maximise head office profit and dividends like all global and franchised firms. It provides our teams with access to high quality shared services – led by our group general manager and group heads of marketing, recruitment and retention – giving our clients far superior service levels and our leaders and owners immediate scale”.
“There is no doubt that the days of the global and franchise operations are becoming shorter and more dubious as models like X Commercial launch and grow quickly with a very new service offering and team model”, he concluded.
Source: LJ Hooker Commercial
