“We are seeing a clear trend of real-estate consultancies evolving from pure transaction and advisory businesses into integrated real-estate solutions platforms,” said Shikha Kapur, partner, Deloitte India.
The shift is being driven partly by growing demand from developers and corporate occupiers for fewer service providers across the real-estate lifecycle, industry executives said. It also allows consultants to build capabilities in businesses that can generate revenue beyond individual transactions.
“Advisory and consultancy practices moving beyond transactions and advisory to offer a fuller set of services is a matter of natural progression and evolution,” said Smita Agarwal, chief operating officer of the Anarock group. Developers and corporates increasingly prefer to deal with fewer partners for requirements ranging from site selection and transactions to design and delivery, she added.
Recent transactions involving some of the country’s largest property consultants illustrate the breadth of this expansion.
In 2022, Anarock acquired a 75 per cent stake in myHQ, a booking platform for coworking spaces, in a cash-and-stock deal of around ₹125 crore to tap the growing demand for flexible workspaces.
Recently, the initial public offering (IPO)-bound property consultant acquired a 51 per cent stake in architecture, master planning and interior design firm DSP Design Associates.
In April this year, global real-estate adviser Savills announced the acquisition of a majority interest in Hotelivate, a hospitality advisory firm with a presence across South Asia.
Colliers International, a global commercial real-estate services firm, acquired a controlling interest in Bengaluru-based Synergy Property Development Services in 2019.
Apart from acquisitions, the consultants have also been expanding organically into different adjacent real-estate services verticals, such as project management, design and fitouts, workplace solutions, property management and technology.
Harsh Parikh, partner at Khaitan & Co, said, “The market has become very competitive, and these additional offerings, over and above consultancy advice, are what is driving real-estate consultants to organically include various other streams such as design, architecture, etc.”
On the financial viability of these expansions, Anarock’s Agarwal said the strategic fit of an acquisition and the ability of the two businesses to complement each other are important, while there is no uniform payback period for such investments.
Most of these acquisitions are funded with a mix of equity and debt. Lenders are also keen to lend to a growing business, and real estate has been on an upward trajectory over the past couple of years, according to Parikh.
Anarock’s draft red herring prospectus (DRHP) for its proposed ₹1,000 crore IPO also identifies the acquisition of DSP as one of the uses of funds. It will use ₹148 crore of the issue proceeds to fund the acquisition.
“Many of these adjacent businesses provide more recurring and predictable revenue streams than traditional brokerage and capital markets activities,” said Kapur.
Shrinivas Rao, chief executive officer of real-estate services firm Vestian, said acquisitions are most valuable when they create revenue synergies through cross-selling. For example, an existing leasing client could subsequently use the consultant for design, fitouts, project management or facilities management.
As consultants expand into these areas, the industry could see further partnerships, acquisitions and consolidation, particularly in project management, design and build, workplace solutions, property and facilities management, hospitality advisory and proptech, experts say.
“Given the market trend, we see that more such consolidation and mergers will take place. Every large real-estate consultant wants to offer the best to their clients and create a one-stop shop for them,” Parikh added.
– Real-estate consultants are expanding into adjacent services like project management, flex spaces, design, etc. to deepen client relationships
– Many firms are building these capabilities organically, alongside acquisitions
– Recurring services can help consultants diversify revenue beyond transactions
– Recent deals include Anarock-myHQ, Savills-Hotelivate, Colliers-Synergy, and Anarock-DSP
