For British QSs and engineers its tough enough fighting off your immediate rivals in the market right now. EC Harris saw its revenues drop rather sharply earlier this year, while WSP’s results last week were flatish.
But having just spoken at Mipim to David Hitchcock, head of building consultancy at CB Richard Ellis, it looks like the big agents are now gradually encroaching on their surveying and engineering turf, providing another headache for already stretched consultants.
CBRE has a smallish presence in QSing and engineering, as it stands, with about 50 staff in both fields in the UK at the moment. But Hitchcock says they want those numbers to double over the next three years, such has been the success of those businesses.
The likes of Gardiner & Theobald and Mott MacDonald don’t need to panic just yet, because Hitchcock is clear that CBRE aren’t expanding just for the sake of revenue, and growth will only continue if margins are high.
Plus, the CBRE QSs and engineers don’t really compete with stand alone consultants as they are, but work for clients as part of CBRE service. Their engineers do maintenance and retrofitting, rather than new build.
Still, if CBRE do expand further into these areas, then it’s possible that their clients will increasingly plump for their internal QSs rather than go to the market. CBRE, just like Aecom, seem keen to provide a ‘one stop shop’ for clients, and their enviable contact book of global corporates means this could be a threat to the Gleeds of this world.
Davis Langdon has said they will try to climb up the value chain, offering a ‘McKinsey like’ service to clients from the word go. If consultants are to compete with CBRE, they may have to do the same – climb up the value chain just as CBRE tentatively climb down.