ANNUAL REVIEW
Cushman & Wakefield’s perspective on global trends that are reshaping world economies, organizations and the role of commercial real estate.
CONTENTS 2 Executive Chairman’s Perspective 4 Features 40 Chairmen’s Perspectives 42 Financials 4 4 World Regions Perspective 46 Global Services Perspective 48 Case Studies 54 Giving Back 56 Cushman & Wakefield Leadership 57 Offices
FEATURES
01
Bridging Physical and Online Worlds
4
02
Global Business Strategies Adapt to the Changing World of Trade
10
03
Aligning Real Estate with Business Objectives
16
04
As Markets Recover, Investors Cast a Wider Net
22
05
Driving Urban Revival in Cities Around the World
28
06
For Specialized Sectors, It’s What We Know That Counts
34
ANNUAL REVIEW
1
EXECUTIVE CHAIRMAN’S PERSPECTIVE
Strategic Plan Delivering Results
2012 represented the second full year of the execution of Cushman & Wakefield’s long-term strategic plan, with specific emphasis on increasing market share across our platform. The year was also a reflection of the focus and drive of our employees to enhance our delivery of consistent, high-quality service to our clients across the globe, and we have begun to see great results. Despite global economic uncertainty over the past several years, we had a very strong 2012 with the fourth quarter being a major contributor to our full year success. With our solid revenue performance for the year and continued discipline on cost, EBITDA increased 17% annually from the $93 million in 2010 to our current $128 million in 2012. In the fourth quarter of 2012 alone, EBITDA grew 76.2% year-over-year. From a top-line perspective, Cushman & Wakefield had double-digit growth in gross revenue in the fourth quarter year-over-year, driven by solid performance in all regions and service lines. Our $2.05 billion gross revenue for full year 2012 was the second highest in the firm’s history.
CARLO BAREL DI SANT’ALBANO Executive Chairman
From a bottom line perspective, our net income results for the full year 2012 improved $28 million to more than $43 million year-over-year. Many of the initiatives of the strategic plan have begun to accelerate as we continue to attract the highest quality talent across board. In 2012, we hired more than 1,700 employees, which follows the 1,900 we hired in 2011. In addition to our solid financial performance, Cushman & Wakefield continued to maintain a strong balance sheet. I thank our clients for the trust they continue to place in us to provide advice and execute real estate transactions on their behalf.
2012 GROSS REVENUE HIGHLIGHTS
$2.05
1,700 hired in 2012
BILLION GLOBAL
$1.5 $424.3 $141.6
BILLION AMERICAS 2
MILLION EMEA
NEW HIRES
MILLION ASIA PACIFIC
1,900 hired in 2011
VISION To be the world’s preferred real estate firm, providing the most creative and innovative services on a consistent basis, to drive meaningful value to our clients. To be the best at what we do.
MISSION To mobilize and deliver our vast knowledge, resources and talent throughout the world on behalf of our clients, and to enable them to make the most informed real estate decisions.
GLOBAL STRENGTH
15,000 EMPLOYEES 253 OFFICES
60 COUNTRIES
VALUES Integrity & Respect: Our foremost standards of conduct Collaboration & Trust: A culture of collaboration, trust and sharing of information Confidence: Confidence in each other to deliver the most creative and innovative services to our clients Mentorship: Attract and develop the most talented professionals 3
CUSHMAN & WAKEFIELD
RETAIL READY With Cushman & Wakefield at the center of the global retail revolution, we advise retailers on bold new locations, formats and logistics solutions needed to reach increasingly tech-savvy customers in both established and emerging world markets.
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01 Bridging Physical and Online Worlds Omni-channel retailing gives the customer what he or she wants – an integrated experience available across shopping channels, including mobile devices, computers, physical stores, television and catalogs. It’s still new – and it’s more global – with global supply chains, best practices and retailers pursuing new customers in emerging markets. At the same time, even as global mobile and internet usage spreads, consumer attitudes and expectations, as well as physical and digital infrastructure, will ensure retail remains in many ways a local game.
ADAPTING TO RELENTLESS CHANGE A pressing challenge for retailers is to integrate physical and internet operations in order to compete in the growing omni-channel environment. Staggering Growth: E-commerce compound annual growth rate 2011-2016 70% 57.3%
60% 50% 40% 25.4%
30% 20%
24.7%
11.4%
11.2%
11.0%
22.7%
10% a di In
na hi C
il az Br
an Jap
le ob i -M .S.
U
U
.S.
-T ot
U
al
K
0%
Source: Cushman & Wakefield Research, Forrester Research
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01
BRIDGING PHYSICAL AND ONLINE WORLDS
Paradigm Shift Global online retailing has increased by at least 18% per year in the last three years (Euromonitor). New strategies are about change: different store footprints, urban locations, internet integration, globalization and logistics strategies focused on ever-faster replenishment and delivery. Retailing has and will always come down to Customer Satisfaction.
CASE IN POINT: MOBILE STORES
Shopping While Waiting for the Bus Walmart Canada and Procter & Gamble launched a mobile store allowing Torontonians waiting in bus shelters to shop online with their mobile device and have items shipped to their home for free. Located in 50 bus shelters, the mobile store, which ran for four weeks, made it easy to purchase items from Walmart in categories such as baby and beauty.
Retail Perspectives JOHN STRACHAN Global Head of Retail
“Retailers that are challenged right now are those with large legacy portfolios designed to trade in the ’80s or ’90s. They either need trimming around the edges or major surgery.”
MATT WINN Americas Retail Services Leader
“Globalization, urbanization and internet integration are three major trends. Retailers are looking globally for new customers and ensuring their services and infrastructure are able to meet new demands. They’re also locating in urban cores with new formats and creating direct growth. We’re seeing the true integration of the internet and physical stores.”
JAMES HAWKEY Managing Director, Retail Services, Asia Pacific
“Asia is no longer an option for global retailers. They recognize that you have to have a strong presence in all major markets. Asia’s tough. It’s not homogeneous like the U.S. There are a dozen countries you have to understand. Those already there want to know where to expand, those who aren’t there want to know about market entry – where do they go, Hong Kong or Singapore, and should they use partners.”
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CASE STUDIES
Trends & Forecasts Retailers are rapidly moving into downtown locations with smaller, more focused formats, while also entering new emerging markets around the world. Linked to fulfillment, the store will be a key to the supply chain. It will be a hub for information – internally, from technology to personnel, and externally, from interactive store windows and displays to center-wide systems. Collection points may be in-store, centralized within shopping centers or placed at collection hubs that evolve into a new form of anchor store.
Acquiring Luxury Flagship Stores JIMMY CHOO Location: Europe C&W Services Used: Leasing Drawing on Cushman & Wakefield’s extensive, worldwide expertise in the luxury sector, our teams have acquired flagship stores for Jimmy Choo in numerous capital cities including Madrid, Prague and Brussels.
Supply Chain Acquisition JOHN LEWIS PARTNERSHIP Location: Buckinghamshire, UK C&W Services Used: Leasing
Lease Flexibility With mobile POS or self-service developing at different speeds in different countries and sectors, flexibility supports differences and change. The type, conditions and length of leases may need more flexibility – with differences between core and non-core stores, for example, or to cover both pop-up shops and ongoing occupations.
Cushman & Wakefield was appointed to negotiate the acquisition of an additional 670,000 square feet for John Lewis, whose online sales have passed the $1.5 billion mark. The acquisition is a key part of Programme Q, the Partnership’s biggest ever Supply Chain and Systems transformation project.
Disposal Leads to Acquisition Appointment WINCANTON PLC / POUNDLAND Location: Hoddesdon, Hertfordshire, UK C&W Services Used: Leasing Cushman & Wakefield was appointed to advise on the retailer’s longer-term acquisition project, a forward-funded 350,000-square-foot design and build project in Harlow. Once complete, the new site will create up to 650 jobs at the peak of its operation.
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01
BRIDGING PHYSICAL AND ONLINE WORLDS
Exploding New Markets and Accelerating High-Tech Drivers At least 1.3 billion people are expected to join the middle class within the next 10 years, and income growth across both mature and emerging economies will also create more consumers. 1.3 Billion New Customers (2010-2020) New Additions To Global Middle Class 100%
All Europe – 1.3% Other Latin America – 3.1% All Other – 5.5% Other Middle East – 8.9% Other APAC – 11.7% U.S. – 1.5% Brazil – 1.5%
90% 80% 70% 60% 50%
India – 31.3%
40%
China – 35.2%
10% 0% Source: Bain & Company
* Middle class defined as having disposable personal income > $5,000 US
Income Growth Translates into New Consumers (forecast change 2010-2020)
250% 200% 200%
Some 80% of the world’s people have gained mobile access in less than two decades. Smartphones already account for almost 40% of global mobile-phone sales. In 2013, mobile access will overtake fixedline access as the world’s primary way of going online. There have been two computing cycles:
2. Tablets
125%
And now we’re entering a third, which will see:
100%
19%
23%
23%
UK
U.S.
Japan
36%
3. Wearables, drivables, flyables, scannables
0% Brazil
Source: Cushman & Wakefield Research, World Bank
8
There are now 2.4 billion internet users around the world. China leads the U.S. in mobile and internet time spent versus TV (China 55%, U.S. 38%) and the UK is now the world’s leading country for e-commerce. By 2016, 23% of all UK purchases could be online based, representing an annual growth rate of 11%, compared with projected growth rates of 5.4% in the U.S. and 6.9% in China.
1. Smartphones
150%
50%
BILLION INTERNET USERS
By 2016, there will be three billion internet users globally – almost half the world’s population. The internet economy will reach $4.2 trillion in the G-20 economies.
30% 20%
2.4
China
India
Sources: KPMG 2013 Internet Trends, The Boston Consulting Group Perspectives reports
CASE STUDIES
CLIENT PERSPECTIVE
“ We are extremely excited to be opening our second NYC flagship in the old Toy Building. This location offers a strong retail location, great retail space and easier access for local New York residents.” J USTIN TRIPP Vice President, LEGO Systems, Inc.
Bringing Toys Back to the Toy Building LEGO SYSTEMS, INC. Location: New York, NY, U.S. C&W Services Used: Leasing
Getting a Grip on the New Rules Entering new markets can be tough. Retailers need a strong and consistent support platform to introduce global brands. Local customs and languages, along with laws and political systems, must be carefully navigated.
FIRST RULE Know thy customer to make the best decisions about channel integration and usability.
SECOND RULE Partner with a retail and logistics expert with the market knowledge, networks and track record needed to guide your successful entrance or expansion. C&W’s global perspective and street-level experience supports every retail aspect in every major world market.
Cushman & Wakefield has advised LEGO on site selection for urban stores in North America since 2009. In 2010 the team selected LEGO’s NYC flagship location at Rockefeller Center, which has enjoyed tremendous success. The team recently completed a transaction for LEGO’s second NYC flagship at 200 Fifth Avenue on the corner of 23rd Street. LEGO will replace Fidelity Investments, upon the natural expiration of their lease term, at the premiere retail corner overlooking the historic Flatiron Building and Madison Square Park. 200 Fifth Avenue is an historic building known as the Toy Building, and houses the Headquarters of Tiffany & Co. and Grey Advertising, along with the successful ground floor operation of Eataly and Marimekko. The new LEGO flagship will be instrumental in extending the flatiron retail corridor.
Acquiring Stores Across the World H&M HENNES & MAURITZ AB Location: Global C&W Services Used: Leasing Cushman & Wakefield represented H&M in two significant deals in New York, one of which became the largest Midtown Manhattan retail deal in 2012. As well, our teams leased a flagship store to H&M in Amsterdam and helped H&M acquire a third store in Shanghai.
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CUSHMAN & WAKEFIELD
INDUSTRIAL STRENGTH At the forefront of powerful forces reshaping global trade and world economies, Cushman & Wakefield partners with companies to conquer new dynamics by tightening every link in the supply chain, from site selection to facilities design.
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02 Global Business Strategies Adapt to the Changing World of Trade The pace of change and the stress on distribution and logistics systems 2001 that the new “demand economy� imposes on business will continue Trillion Logistics will to force supply chain leaders to lead with$6.5 innovation. increasingly rely on improvements in the productivity and innovation 2021 and less on the productivity of labor.
GLOBAL TRADE TRAJECTORY If global trade grows as expected by 9.5% per year for the next 10 years, about $2.7 trillion in new goods$45 willTrillion be added per year to the global pipeline. By 2021, an astounding $45 trillion in goods could be crisscrossing our planet every year. That compares to $6.5 trillion in 2001.
2001
2021
$45
TRILLION
$6.5
TRILLION
Source: Cushman & Wakefield Changing World of Trade White Paper
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02
GLOBAL BUSINESS STRATEGIES ADAPT TO THE CHANGING WORLD OF TRADE
Global Strategies for Local Markets
Trade Perspectives MARIA SICOLA Executive Managing Director, Head of Americas Research
Shifting global labor and consumer landscapes are driving change across commercial real estate sectors, including warehouse and distribution, manufacturing and retail. Rising wages in Asia, transportation costs and advanced automation are just some of the factors that have manufacturers rethinking their business models. Location changes are occurring. Some companies are moving all or parts of their operations back to North America or locating in Eastern Europe or emerging new markets. Meanwhile, as middle class growth explodes in Asia, global retail chains are sourcing opportunities to enter regional markets. E-commerce is also pressuring retailers to update their strategies – and the rise of urbanization is seeing an increase in smaller, more focused store formats. Sophisticated delivery systems including high-tech distribution centers in local and regional markets are key elements of the new picture. It’s all part of the Changing World of Trade. 12
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“We are experiencing a new and pressing paradigm that spans the entire supply chain. On one end, consumer demand patterns are changing retail formats, service levels, order sizes and product life cycles at an unparalleled rate. On the other, the dynamics of material and labor supply are evolving at an equally staggering pace. Connecting these areas are significant logistics challenges, which, all in, have created real volatility in critical supply chain variables.”
MARK WEBSTER Partner, Head of National Logistics & Industrial, London
“Central and Eastern Europe (CEE) remains the location of choice for companies looking to move manufacturing operations to lower cost areas, especially as demand from Asia continues to build. Technology has become increasingly important, as logistics companies need to offer seamless transactional capabilities. E-commerce is a massive driver with next day or better delivery options now being offered by many. This puts pressure on real estate and supply chain strategies.”
CASE STUDIES
Winning Industrial Real Estate Strategies
1
ompanies in sectors with C high-customer service demands are expanding their number of regional distribution centers and cross-dock facilities to reduce the overall distances to customer destinations. These facilities will be increasingly urban in order to satisfy the growing trend towards same-day fulfillment, bolstering demand around the edge of major cities for smaller, in-fill spaces located closer to consumers.
2
With the growth in internet access, technological advances will increasingly drive business change. Leading logistics companies will embrace technology and develop new ways of using property.
3
Large occupiers are consolidating space and finding efficiencies both within their four walls and through collaboration where complementary supply chains exist. Increasingly, we will see retailers, producers, shippers and logistics companies trying to extend their reach, extend their span of control and vertically integrate. Vertical integration promotes technology and process adjacency; more work will be done closer together. This is expected to drive greater demand for space.
One-Million-Square-Foot Blend/Extend GENCO Location: Fort Worth, TX, U.S. C&W Services Used: Leasing Cushman & Wakefield was retained to represent GENCO with lease advisory and negotiations on their significant three-building, one-millionsquare-foot industrial campus. GENCO was paying above market rates with almost no flexibility on three adjacent facilities. The facilities had three different lease expirations ranging from six to 18 months remaining. All of the buildings required a significant amount of renovations and improvements in order to make the facilities functional for the long term. Cushman & Wakefield creatively negotiated coterminous expirations, ensuring longer term leases and multiple options to expand or terminate. The new lease agreements maintain maximum flexibility going forward and capture the necessary improvement dollars to address GENCO’s business and operational requirements. As a result of our client-focused, creative approach and considerable negotiations, the client saved over $5 million starting immediately.
Facilities Management for 13 Sites ROBERT BOSCH MEXICO Location: Multiple locations in Mexico C&W Services Used: Corporate Occupier & Investor Services To help German manufacturer Robert Bosch achieve its goal to reduce regional operational costs and increase sales, Cushman & Wakefield was selected as a strategic partner to deliver Facilities Management Services for 13 manufacturing sites in Mexico. In order to ensure consistency, Cushman & Wakefield appointed an account manager to centrally manage regional teams and implemented a hybrid model combining remote and on-site service.
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02
GLOBAL BUSINESS STRATEGIES ADAPT TO THE CHANGING WORLD OF TRADE
Trends & Forecasts DUAL OPERATIONS
ASIA’S RESILIENCE Despite continued global economic challenges and the related manufacturing slowdown in China and other major Asian economies, industrial, warehousing and logistics market activity has remained steady and is gaining momentum.
CROSS BORDER FIRE With U.S. and European brands expanding their presence in growth countries like China and Brazil and cross-border retail on fire around the world, there is a greater urgency to accommodate changing distribution networks.
EMERGING FORMATS The “click-and-collect” option, where customers can order on the internet and collect their purchases from designated locations such as an existing store, is a growing trend in Europe, notably France and the UK.
RESHORING GAINS TRACTION
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In 2005, U.S. manufacturing wages were almost 25 times that of China. Today, that wage gap multiplier is under 10 and could be under five by 2015. Mexico’s cost of labor is beginning to mirror China’s. Reshoring is likely to gain traction as the “total landed cost gap” of offshore manufacturing narrows, and labor costs become more globally balanced.
Multiple, well-placed distribution centers minimize the time and distance spent on the final leg of delivery. Many retailers are setting up dual operations backed by mega-distribution facilities that support both online and in-store inventory. Locations must be close to affordable labor and have access to rail, highways and air transportation.
WHAT’S NEXT? 3-D PRINTING? Thanks to the web – which has enabled a digital, community approach to innovation and sourcing – and the availability of desktop-manufacturing technology such as 3-D printing, regular people will be able to do what only factories could do before. Some say this will kick off a new era in manufacturing, where success is more dependent on innovation and entrepreneurship than on cheaper labor, energy or real estate.
SPACE SHORTAGE One of the biggest challenges facing industrial space users across the Americas is the shortage of quality space, as technological advances have rendered many facilities obsolete.
GLOBAL MARKETS GEAR UP FOR INCREASED TRADE As production and manufacturing become more local to meet delivery timelines, the average distance that transported goods move will continue to shorten. In the Americas, transportation is becoming horizontal and holistic, moving end-to-end freight through increasingly seamless intermodal connections. In Europe, financial investment is focused on upgrading the unevenly developed infrastructures of Central and Eastern Europe to keep pace with state-of-the-art advancements common in Western Europe. Massive infrastructure investment is underway throughout Asia as rapid urbanization in most Asian economies is driving up the volume of freight and passenger transport across regional railways, expressways, distribution centers, ports and regional hubs.
CASE STUDIES
Trade Perspectives JOHN C. MORRIS Industrial Services Lead, Americas
“We think the current paradigm in supply chain management can be roughly aggregated into three categories: logistics efficiency, location strategy and technology management. Labor, utilities, infrastructure and their impact on the success of a supply chain are the forces that connect real estate strategy with supply chain strategy. With increased fuel costs and a decline in labor arbitrage savings in off shoring, manufacturers are thinking differently about location. With any new technology comes the adoption challenge. The question is, does a new technology make sense and what is the pay back?”
PETER ZHANG Director, Industrial Consulting, Shanghai
“Asia’s aging population is a growing consideration. UN research shows that the number of people 65-plus in the region will reach 14% by 2025 and 21% in 2050, from less than 10% now. Because of this, we see more and more life science related investment, and fast growing demand for high-quality R&D manufacturing space in the region.”
Supply Chain Transformation JOHN LEWIS PARTNERSHIP Location: Buckinghamshire, UK C&W Services Used: Leasing John Lewis was in an existing 650,000-square-foot unit on G Park, Milton Keynes. Cushman & Wakefield was appointed to negotiate the acquisition of an additional 670,000 square feet located close to the first unit as the buildings needed to be joined by a conveyor belt link. The acquisition is a key part of Programme Q, the Partnership’s biggest-ever supply chain and systems transformation project that involves significant redundancies and future property disposals. Online sales at John Lewis have passed the $1.5-billion mark on a rolling 52-week basis, alongside a successful launch of a multi-million-pound web platform. The milestone comes a year ahead of the retailer’s forecast. This has led to the additional investment in their E-Commerce Fulfillment Platform, which runs exclusively from Milton Keynes.
C&W Helps Major Pharma Secure Space TEVAPHARM INDIA PVT. LTD. Location: Sanand, Gujarat, India C&W Services Used: Capital Markets Teva, in collaboration with Procter & Gamble, planned to set up a multiproduct, state-of-the-art manufacturing facility in India to produce OTC drugs for domestic and APAC markets. Cushman & Wakefield was selected to assist Teva in location strategy and land acquisition. Leveraging our experience in the manufacturing sector, we helped them finalize Sanand, Gujarat, an excellent location with advanced infrastructure that enabled fast facility development.
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CUSHMAN & WAKEFIELD
DRIVING VALUE With over 900 million square feet of properties and facilities managed globally, Cushman & Wakefield draws from deep experience and an exceptional track record to assist companies in driving unimagined new efficiencies, from cost savings to winning the fight for talent.
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03 Aligning Real Estate with Business Objectives Density, consolidation, sustainability, collaborative workspaces, outsourcing, global portfolio management – everything is on the table as business responds to change, and looks to its real estate as a leading force in meeting long-term competitive business objectives. Companies that tie real estate solutions across single or multiple locations into top business priorities experience both increased productivity and bottom-line financial results.
UNLEASHING NEW COMPETITIVE EFFICIENCIES To gain added value and quantifiable results, companies empower their Corporate Real Estate teams by following such steps:
1. Understand the portfolio 2. Identify the business goals 3. Develop the right organization 4. Create a governance model 5. Leverage service providers Read more on page 18 17
03
ALIGNING REAL ESTATE WITH BUSINESS OBJECTIVES
Key to Leading Change Rapid global change is being driven by a multitude of factors that are altering the way business is done. Companies are seeking ways to streamline operations and, at the same time, they’re responding to workforce demographics that are having a profound impact on how they plan, manage and invest for the future. The concept of Corporate Real Estate (CRE) contributing more strategically to the business has gained undeniable momentum. CRE is now playing a key role in strategic business initiatives including talent management, cost containment, workplace design, and corporate branding and culture.
Expanding Market Share When Cushman & Wakefield acquired Cousins Property Service in the fall of 2012, we acquired a property management portfolio of high-profile properties in Atlanta, GA, and Dallas, TX. More importantly, more than 100 highly respected professionals in property management, agency leasing and construction management joined our firm, burnishing our brand and reputation in two key U.S. markets. The acquisition brought seven properties in Atlanta and 17 in Dallas under the Cushman & Wakefield banner, greatly expanding our market share in both cities. 18
Five Steps to Aligning Your Corporate Real Estate and Business Goals
1
Understand the portfolio
To offer strategic value to the business, the CRE must have a comprehensive understanding of the portfolio, its financial risks and obligations, and where opportunities exist.
2
Identify the business goals
Is it the goal to align total location costs to a percentage of revenue? Is it to secure space through design or other options? Or is it to drive collaboration and innovation across its business units and global markets?
3
Develop the right organization
The CRE identifies the proper structure and resources needed to support an expanded role. Identifying who will liaise with business units and how the communication will occur are critical priorities.
CASE STUDIES
4
Create a governance model
Changing a CRE’s operational focus requires a Corporate Governance model that identifies the methodologies and guidelines for decision-making.
5
Leverage service providers
Partnership models are explored, allowing the CRE to transition some, or all, of its responsibilities for the physical real estate to free resources to focus internally on how the combination of real estate strategy, workplace design, and controlling costs assists the business.
Successful U.S. Embassy Relocation U.S. GOVERNMENT Location: London, UK C&W Services Used: Corporate Occupier & Investor Services After a successful disposal of 20 Grosvenor Square, Cushman & Wakefield was asked to identify and acquire a site for the construction of a new U.S. Embassy. Upon completing the post-site acquisition, we were then appointed to manage the development process including planning and managing the London build activities associated with procurement.
Rapid Response for Critical Properties WELLPOINT, INC. Location: Indianapolis, IN, U.S.. C&W Services Used: Corporate Occupier & Investor Services Cushman & Wakefield worked with WellPoint IT to develop an efficient system to provide quick problem identification and response, using the best technology and people. Our team installed the monitoring of environmental and power status at 38 critical locations across the U.S. – covering approximately 200,000 square feet. In addition, a Rapid Response Team was formed that includes 46 professionals across the country.
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03
ALIGNING REAL ESTATE WITH BUSINESS OBJECTIVES
OUTSOURCING PERSPECTIVES Firms are exploring different types of outsourcing models and using the expertise of their outsource service providers more efficiently. Many are alleviating themselves of tactical real estate responsibility altogether and focusing on better serving their core customers.
Winning Occupancy Strategies
Below are questions and findings from C&W’s 2012 Client Perspective Survey, indicating where many firms stand on the issue of outsourcing.
31%
30% STREAMLINING
WEIGHING PRIORITIES
Leading companies are taking steps to centralize or streamline CRE functions so they can better adapt to continuous shifts in the business landscape. Priorities include aligning real estate with company business units, centralizing decision-making and processes through corporate governance programs and focusing on the employee experience.
An effective real estate strategy must take into account long-term business growth or contraction and office relocation contingencies.
DECENTRALIZING FUNCTIONS Advanced technology offers some occupiers the ability to move certain functions to less expensive non-central submarkets, while maintaining a cohesive flow of information and communication between head and satellite offices.
Occupiers should consider how many new employees they intend to hire and also what business functions they foresee expanding or contracting. Planning must be viewed from the prism of how business forecasts may require workforce adjustments and therefore real estate needs.
DIFFERENT GENERATIONS As demographics change, the challenge is to design the right environment that supports different generations with different work habits. Flexibility has never been more important. Technology will continue to be the ultimate driver of change, influencing how and where we work.
ONE
FOUR OR MORE
How many real estate service providers does your organization use consistently on a global basis?
31%
30%
ONE
FOUR OR MORE
39%
TWO OR THREE
39%
TWO OR THREE
Which outsourcing model would be the most effective for your organization?
25%
3% OTHER
ONE PROVIDER GLOBALLY
3% 25% 8%
MARKET EXPERT ONE PROVIDER GLOBALLY GLOBAL EXPERT BY FUNCTION
3%
REGIONAL EXPERT BY FUNCTION
3% OTHER
19%
REGIONAL PROVIDER FOR ALL SERVICES
8%
19%
REGIONAL PROVIDER FOR ALL SERVICES
20
42%
REGIONAL EXPERT BY FUNCTION
MARKET EXPERT
GLOBAL EXPERT BY FUNCTION
42%
CASE STUDIES
Ramping Up Value JOHN C. SANTORA President & CEO Corporate Occupier & Investor Services
“We’re proud of our measurable performance for many of the world’s leading corporations and institutions, and of our track record of 435 million square feet in wins and renewals over the past year. Our results directly reflect the performance we are able to deliver for our clients.”
CLIENT PERSPECTIVE
“ More and more, our clients are looking for a partner that can deliver services for their networks from end to end while keeping low operational costs. With this new center, we are investing in increasing our capacities to satisfy these new demands with remote services.” RVAR HUNTING O Service Delivery Chief Ericsson
CLIENT PERSPECTIVE
“ Mexico is considered by Robert Bosch as an important market in the region.” S TEFAN HARTUNG Industry, Energy and Construction, Bosch
Major IKEA Renovation Causes Minimum Business Disruption IKEA BEIJING CO., LTD Location: Beijing, China C&W Services Used: Corporate Occupier & Investor Services In order to align with IKEA global development strategy, Cushman & Wakefield was appointed to renovate its 1.3-million-square-foot Beijing store and office. The retailer’s basic goal was to provide a comfortable updated environment for its customers and employees through the use of advanced technology.
Mexico Locations Meet Business Objectives ERICSSON TELECOM S.A. DE C.V. Location: Mexico City C&W Services Used: Corporate Occupier & Investor Services Ericsson selected Cushman & Wakefield to provide Project Management and Facilities Management Services after deciding to locate its Global Network Operation Center (GNOC) in Mexico. Currently, our Facilities Management team delivers services for Ericsson in six different sites, covering 436,000 square feet. The complexity of Ericsson’s operation includes 24/7 critical services at GNOC sites, as well as coordinated processes with North America (U.S. and Canada) and South America (Brazil, Argentina, Colombia and Chile). We assigned a regional team to coordinate efforts between countries, implemented an Integrated Workplace Management System, and relocated our professionals from other accounts to Ericsson as part of the strategy to ensure the successful delivery of services.
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CUSHMAN & WAKEFIELD
GLOBAL REACH Smart money knows no border, and at Cushman & Wakefield, our success is built on delivering a highly collaborative effort across geographies and service lines to ensure our clients get nothing but the best available advice and execution to achieve their goals.
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04 As Markets Recover, Investors Cast a Wider Net Stability and high liquidity, along with an improving business cycle, are key global occupier and investment market themes. A 14% rise in volumes is forecast for 2013, taking the global investment total back above $1 trillion for the first time since 2007. North America and parts of Asia are leading the way. Cap rates continue to compress in many gateway markets and are stabilizing at or near pre-recession levels in the top few global cities. Meanwhile, investors are prudently moving up the risk-reward spectrum in search of yield, slowly stabilizing second-tier markets in recovering economies, though the weakest markets remain out-of-favor. Lending and loan purchases also remain attractive options, along with recapitalization strategies.
2012 CROSS BORDER INVESTMENT GROWTH Investors are increasingly looking across borders for the best opportunities in our shrinking global world. Investment Share in 2012 North America APAC Latin America EMEA 0%
10%
20%
Domestic
30%
40%
50%
60%
70%
80%
90%
Cross border
Source: Cushman & Wakefield, RCA, KTI and Property Data (Deals over US$5 mn)
100%
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04
AS MARKETS RECOVER, INVESTORS CAST A WIDER NET
2013 REGIONAL FORECAST
Americas North America’s strong sale growth has been driving global totals. It will be a favored market for investment in 2013, with a 15%-20% volume increase forecast for the U.S. and Canada – the region’s key drivers. Mexico may again outperform expectations, although Brazil will see more of the spotlight as eventdriven infrastructure is developed. Construction activity is rising in multifamily and in select office and industrial markets. Investors remain focused on multifamily and gateway office markets, followed by prime retail and industrial markets. Modest cap-rate compression is anticipated, led by the better assets in second-tier markets as investor risk tolerance grows and finance availability improves with the CMB market rebound.
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EMEA Investor strategies for the U.S. are likely to include buying vacancies in top-tier markets or acquiring top-tier assets in secondary markets, with select new construction in the tightest markets. In Canada, development may be a favored route. Expect the securitization market to again become an active source of financing for large assets like malls and office towers, as well as for commodity real estate in secondary markets. With strong appetite for “B” piece buyers, CMB volume may reach $100 billion in 2013. With many peak-pricing debt maturities scheduled to occur in 2013, expect the debt markets to be active. Mezzanine financing and preferred equity growth will help “fill the gap” between proceeds available through new senior loans and existing debt.
EMEA is not out of the woods yet: growth looks likely to remain low and volatile and performance will be very diverse market by market. However, improved stability will breed greater confidence in occupier and investor markets, and activity is expected to improve, with a 5% increase forecast for investment. A lack of product and affordable finance will restrain activity in the short term, but stock from banks, the public sector and corporate owners will create more opportunities.
Asia Pacific North and West Europe will continue to outperform the South. Eastern markets will be mixed, but Russia and Turkey will see strong growth and other emerging markets will be favored by cost-conscious occupiers and yield-hungry investors. While core markets will remain in high demand, their boundaries will expand over the year. The funding gap is very slowly being filled by new lending sources (including capital from the Americas), but remains an area of opportunity for investors. Occupier markets will see limited net growth, but more replacement, improvement and consolidationdriven demand that focuses on efficient space and underpins a modest return of rental growth in under-supplied prime markets across all sectors.
Asian investment sales are almost half of global totals, driven by domestic demand and land sales. Volumes are forecast to rise 15% -20%, while stimulus measures, infrastructure investment, export growth and retail spending will drive modest rental growth and some degree of yield compression. High liquidity will boost the Asian market this year, but increased diversity between regions and sectors will remain the story, as more modest levels of growth become the new norm.
Investor demand will continue in core markets in Australia and Japan for risk-adverse foreign players, increase in China, and also broaden to other areas such as India, Malaysia, Indonesia and Vietnam for those seeking growth. As global banks follow regional banks in expanding, office demand will get a boost in major gateway cities. Retail markets will experience strong turnover growth and retail brands will increasingly be impacted by trends such as urbanization and globalization. Logistics may be the hottest sector overall, with strong demand and investment activity in key hubs such as Osaka, Tokyo, Shanghai, Hong Kong and Singapore.
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04
AS MARKETS RECOVER, INVESTORS CAST A WIDER NET
Sale of London Stock Exchange Headquarters MITSUBISHI ESTATE COMPANY Location: Otemachi, Japan C&W Services Used: Capital Markets Mitsubishi Estate Company (MEC) completed the sale of King Edward Court, 10 Paternoster Square, EC4 to Oxford Properties, the real estate arm of the OMERS Worldwide Group of companies, for $366 million, reflecting an initial yield of 5.3%.
Three Landmark Transactions BANK OF AMERICA Location: NY, NJ, MA, U.S. C&W Services Used: Capital Markets, Corporate Occupier & Investor Services, Leasing Bank of America (BofA) is one of the world’s largest financial institutions, serving clients in more than 40 countries. In 2012, Cushman & Wakefield cross-service teams collaborated in the completion of three top transactions on behalf of BofA in Hopewell, NJ, Midtown Manhattan and Boston.
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CASE STUDIES
Confidence Takes Hold GREGORY S. VORWALLER Executive Vice President and Global Head of Capital Markets
“We forecast that investment sales and acquisitions volumes will rise by about 15% in 2013 over last year to reach about $1 trillion globally. Looking at it by global region: in the Americas, the equity and debt markets are flush with capital in search of relative yield, which should result in a healthy transaction market, especially in the U.S.; in APAC, the resumption of the lending market in China should help bolster activity levels in the entire region; and in EMEA, we are beginning to see some bright lights with increased bidder interest for quality deals, along with an emergence of capitulation among financial owners that should result in more opportunity.”
CLIENT PERSPECTIVE
“ The acquisition of Rosengårdcentret is the biggest trade to date for ECE’s European Prime Shopping Centre Fund. The acquisition is interesting for us as it ensures the fund has an even better geographical spread of our investments. It also fits into the fund strategy to acquire leading shopping centers with the possibility of adding value.” R. VOLKER KRAFT D Managing Partner ECE Real Estate Partners
Largest Trade for ECE Shopping Centre Fund ECE REAL ESTATE PARTNERS Location: Hamburg, Germany C&W Services Used: Capital Markets Our EMEA Capital Markets team, in collaboration with Copenhagen-based Property Partners and RED Property Advisers, advised on the sale of Rosengårdcentret – the second-largest shopping center in Denmark – to ECE’s European Prime Shopping Centre Fund for $526 million. Rosengårdcentret covers 110,000 square meters and attracts almost 7.5 million visitors each year.
30 Crown Place – First Overseas Investment SAMSUNG SRA ASSET MANAGEMENT Location: London, UK C&W Services Used: Capital Markets Samsung SRA Asset Management, through Cushman & Wakefield, acquired 30 Crown Place, London EC2, on behalf of South Korean institutional investors from a fund managed by Hannover Leasing GmbH & Co. KG. The deal marks Samsung SRA’s first overseas investment and suggests that international capital flows and wealth transfer are driving a dramatic new phase of globalization. The final deal involved a German fund manager, two German banks, a North American advisor to the vendor, plus a consortium of seven Korean LP investors led by Samsung SRA.
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CUSHMAN & WAKEFIELD
RE-IMAGINED WORKPLACES Cities around the world are rapidly evolving and Cushman & Wakefield proudly plays a leading role in the growth of the world’s most exciting urban markets, thanks to our out-of-the box real estate solutions delivered to clients across the asset spectrum.
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05 Driving Urban Revival in Cities Around the World In major cities around the world, downtown revitalization and changing live-work habits have spurred leasing activity, office development and out-of-the box collaborative workplace designs. Thanks to smart urban planning, downtown markets have become magnets to educated, techsavvy people, who want to live, work and play close to home. With companies locating closer to talent, competitors and sector clusters, they’re not only responding to the needs of stakeholders, but they’re also playing a leading role in transforming their urban communities.
NEW ERA FOR WORLD CITIES URBANIZATION: Prior to 2011, suburbs in the U.S. had consistently outpaced big cities since 1920, with the rise of the automobile. Now, central areas in top cities are leading growth.
HIGHER DENSITY: 70% of 500 CRE executives surveyed by CoreNet Global indicated that the gross square feet per person in their organization would drop to 100 square feet or less over the next five years, down about 55% from the current industry average.
GLOBAL BOOM: World construction activity will accelerate by $6.3 trillion or 70% by 2025 with activity driven by rising populations in emerging economies and increasing urbanization. China, India and the U.S. will lead the surge. 29
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DRIVING URBAN REVIVAL IN CITIES AROUND THE WORLD
Sun Shining Bright on Lower Manhattan “ As co-exclusive agency broker for The Port Authority of New York and New Jersey and the Durst Organization, we are engaged in playing a central role in the success of One World Trade Center – and witnessing the transformative impact this iconic building is having on its new tenants, all of Manhattan, and you could say the world.” TARA STACOM Executive Vice Chairman, New York
ONE WORLD TRADE AT THE HEART OF CHANGE
The Lower Manhattan economy is growing more diverse, with an increase of media and other creative companies, as well as technology firms. These trends are visible in relocations, occupancy and leasing. In 2012, 17 transactions of over 100,000 square feet were completed in Lower Manhattan, nine of which were new leases and eight renewals. This includes Condé Nast signing a 133,000-square-foot expansion to take a total 1.2 million square feet at One World Trade Center. The U.S. General Services Administration also finalized a 270,000-square-foot lease in the building. This resulted in the 3-million-square-foot iconic office tower being more than 55% leased – underscoring the major contribution One World Trade Center is making to the diversity of this dynamic market. SCAN FOR VIDEO
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Lower Manhattan’s Rich Diversity Companies that have relocated to the area since 2005 represent a broad range of industries.
5%
TECHNOLOGY COMPANIES
21%
28% CREATIVE SERVICES
OTHER
22%
FINANCE, INSURANCE, AND REAL ESTATE
24%
PROFESSIONAL SERVICES
CASE STUDIES
Urban Allure Gains Traction In cities around the world, both creative-class sectors and traditional sectors are heeding the call of revitalized downtown locations. Organizations are seeking space in sustainable office buildings or retrofitted properties that offer reduced operating costs, increased density, better light and air quality, and support employee-focused occupancy strategies that attract and retain talent. A 2012 CoreNet Global survey of 500 CRE executives found that over 70% indicated that the gross square feet per person in their organization would drop to 100 square feet or less over the next five years, down approximately 55% from the current industry average. City leaders are actively encouraging downtown business growth through tax incentives, cluster strategies and infrastructure development programs. Young people, along with would-be retirees, continue to settle in central areas where jobs, housing and vibrant lifestyles are more easily accessed. Prior to 2011, suburbs in the U.S. had consistently outpaced big cities since 1920, with the rise of the automobile. Most recent census estimates reveal a changing dynamic as of July 2012. Cities with booming regional economies are growing the fastest, closer-in suburbs linked to a city with public transit or well-developed roadways are benefiting, while farther-out suburbs are seeing the lowest growth rates.
New HQ Balances Quality and Flexibility BRACEWELL & GIULIANI LLP Location: London, UK C&W Services Used: Leasing Cushman & Wakefield advised Bracewell & Giuliani on establishing a London headquarters. The team was involved in all stages of the acquisition process, with advice on space requirements for their long-term requirements, capital required and also on alternative lease structures and their impact on the firm’s P&L account. It was critical that the new HQ balanced the need for a high-quality space and flexible lease conditions.Â
Negotiation Expertise Secures Broadcast Studio NBC UNIVERSAL Location: Fort Worth, TX, U.S. C&W Services Used: Capital Markets, Leasing Cushman & Wakefield was engaged by NBC Universal to evaluate the disposition of their 64-year-old, 66,000-square-foot, owned broadcast studio on 26.5 acres in Fort Worth. After performing due diligence, NBC selected a master developer for Centreport, just south of DFW International Airport, where it purchased 8.1 acres. Cushman & Wakefield negotiated and secured significant incentives, including tax abatements with the creative solution of deeding the owned facility to the City of Fort Worth in exchange for additional incentives. The final lease concluded with a 75,000-square-foot build-to-suit including a Purchase and Sale Agreement.
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DRIVING URBAN REVIVAL IN CITIES AROUND THE WORLD
Behind the Building of a Great Brand and Great City
China, India and U.S. to Lead World Construction Growth World construction activity will accelerate by $6.3 trillion or 70% by 2025 with activity driven by rising populations in emerging economies and increasing urbanization, according to The Global Construction 2025 report from Global Construction Perspectives and Oxford Economics.
Deloitte¹s bold decision to consolidate multiple offices across the Greater Toronto Area will not only see all employees working together under one roof, but has also kicked off the development of a new 980,000-square-foot office tower, and will ultimately rejuvenate an entire city precinct. Once completed in 2015, this collaborative effort between Deloitte, Cushman & Wakefield and Brookfield will transform a neglected downtown core area in Toronto into a vibrant urban community.
While two thirds of global construction will be focused in China, India and the U.S., the authors noted that activity will increasingly be driven by Vietnam, Indonesia and the Philippines, which they termed the new Asian Tigers.
Cushman & Wakefield successfully negotiated complex lease terminations or extensions for existing locations to align with the timing of the consolidation. At the same time, our Strategic Occupancy service under CIS worked closely with Deloitte and the Brookfield design team to articulate the firm’s vision for a collaborative workplace, resulting in “out-ofthe-box” modifications to the property, which aims to achieve the highest LEED Platinum ranking.
Although China overtook the U.S. as the world’s largest construction market in 2010, the report still forecast healthy growth of 40% in U.S. construction by 2025, with the volume of construction output expected to grow by over 75% between 2012 and 2025.
Thanks to this joint effort, Deloitte will realize its vision to create a 419,000-square-foot “office campus” that taps into the buzz of a desirable downtown location and reinforces its commitment to its clients, people and SCAN FOR corporate responsibility objectives. VIDEO 32
“Urbanization is one of the largest challenges facing the human race. Some two billion additional city-dwellers are expected by 2050, giving rise to challenges around providing power, water, sanitation, housing, offices and transportation, as well as doing this sustainably and developing new cities of the future,” said the report, which was written by industry experts.
While any upturn in Europe is expected to be very weak, the UK construction sector was forecast to expand by almost double the average rate in Western Europe.
CASE STUDIES
CLIENT PERSPECTIVE
“ We have called Dallas home for almost two decades, and our goal was to remain in Dallas and in Deep Ellum. We couldn’t be happier to stay in the building we consider an important part of our past, and now, our future.” K YLE CLARK Reel FX Chief Operating Officer
CLIENT PERSPECTIVE
“ Bracewell & Giuliani LLP’s new launch into the London legal market was fully supported by Cushman & Wakefield from the outset. They are fast-moving, flexible and understand how law firms work, which enabled us to identify the best possible office space solution that perfectly balances location, image, quality, flexibility and cost.” J ULIAN NICHOL Partner, Bracewell & Giuliani LLP
Urban Office Deal of the Year REEL FX, INC. Location: Dallas, TX, U.S. C&W Services Used: Leasing Recognized as Dallas Business Journal’s Urban Office Deal of the Year, Reel FX Inc., an award-winning creative studio specializing in animation and visual effects, secured its footprint in Dallas’s Deep Ellum submarket in July 2012. After seven years in the building, Reel FX acquired the 73,200-square-foot property to serve as its corporate creative headquarters. Cushman & Wakefield was engaged to represent Reel FX with their requirement. There were two shortlist options, but, in the end, given the firm’s deep connection to Deep Ellum – and that the City of Dallas provided compelling incentives – Reel FX was convinced that remaining in their current location represented the very best solution.
Iconic Art Deco HQ Rejuvenates Market BROWN BROTHERS HARRIMAN Location: Boston, MA, U.S. C&W Services Used: Capital Markets, Corporate Occupier & Investor Services, Leasing Cushman & Wakefield began working with BBH’s Boston requirement in 2010 to refine its real estate objectives to maximize efficiency and minimize costs while retaining a strong Boston presence. Ultimately, BBH chose to consolidate three different offices into 411,128 square feet at 50 Post Office Square, the former New England Telephone corporate headquarters. The firm will accommodate more than 2,100 employees in a fully renovated and modernized Boston icon. BBH’s 50 Post Office Square served as the catalyst for the preservation of one of Boston’s most prized Art Deco buildings. BBH is leading the charge back into the Financial District’s towers, ultimately reducing a long-standing bulge of low-rise vacancy in Boston’s CBD.
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CUSHMAN & WAKEFIELD
ALIGNED SOLUTIONS We may not be the biggest, but Cushman & Wakefield easily ranks as the most client-centric firm in the world. Our global practice groups gain a full working knowledge of the language, operation and competitive landscape unique to select sectors to deliver nothing but the best fully customized solutions.
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06 For Specialized Sectors, It’s What We Know That Counts Managers in specialized sectors such as healthcare, legal, hospitality and data centers are faced with sets of very specific challenges. Customized, flexible real estate solutions are key to growth, investment and improvement in our rapidly changing environments. Our Specialty Practice Groups, made up of professionals across our global services lines, tailor solutions to fit the needs of specialized organizations. Our Valuation & Advisory business delivers the advantages of sector-focused expertise to clients around the world through a full range of Practice Groups.
SECTOR SNAPSHOTS HEALTHCARE: Small medical malls are not new but mixing medical into existing retail malls is a growing trend. A variety of factors make this an increasingly attractive option for both landlords and providers.
LEGAL: There can be no doubt that change is afoot in legal services across the globe. As large law firms look to gain footholds in key business and financial centers, the pace of M&A activity is expected to increase – and bring with it a host of real estate challenges.
DATA CENTERS: Despite the economic environment, data centre demand has remained steady. Power and infrastructure policies at a country level will be increasingly important and have a direct effect on data centre deployment decision-making, involving significant capital spend by enterprise customers.
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FOR SPECIALIZED SECTORS, IT’S WHAT WE KNOW THAT COUNTS
Cushman & Wakefield Specialty Groups Our Specialty Groups deliver multidisciplinary services, thought leadership and experienced expertise to meet the unique real estate requirements of highly specialized sectors.
GLOBAL SPECIALTY GROUPS
Banking & Financial Services Professional Services Legal Sector Technology & Telecom Life Sciences Media & Advertising Data Centers Energy & Resources Automotive Transport & Logistics Hospitality Government & Public Agencies
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Healthcare Practice Group AT THE FRONTLINE OF HEALTHCARE DELIVERY SERVICES The challenges faced by modern healthcare organizations are steep. Traditional cost and regulatory pressures are complicated by today’s trends in life expectancy, consumerism, patient care and technology. Tomorrow, the landscape will likely shift again. The balance between quality care, slender margins, operational complexity and patient and provider relations has never been more delicate. Real estate is integral to this balance and essential to the frontline delivery of healthcare services. Yet, despite a conspicuous footprint on the balance sheet, the real estate holdings and asset portfolios of healthcare organizations are rarely optimized. C&W’s Healthcare Practice Group (HPG) answers this call by providing strategic and transformational real estate services that deliver positive business outcomes. Our professionals have spent decades working with organizations across all healthcare sectors and asset classes. Our command of the operational, financial, regulatory and market considerations of healthcare places us in a unique position to add immediate and long-term value to these institutions.
Legal Sector Advisory Group
Global Data Center Advisory Group
FLEXIBILE WORKPLACE SOLUTIONS
GLOBAL BEST PRACTICES
For the ever-evolving competitive legal market, maintaining profit margins is a constant challenge. Controlling expenses through creative real estate solutions is paramount in meeting that challenge. Flexible workplace solutions and well-negotiated leases provide a law firm the flexibility to accommodate potential industry shifts and market changes, while supporting key objectives.
Mission critical facilities are complex assets positioned at the intersection of business necessity, risk and cost. They warrant services beyond the traditional and commoditized to ensure optimum efficiency, location, security, scalability and value.
C&W’s Legal Sector Advisory Group is attune to the unique drivers and issues law firms face. In our experience, a critical element of the real estate evaluation process is a clear understanding of the operational, business and financial drivers of the firm. These drivers, combined with the unique generational and cultural issues that are inherent to each firm, interconnect – and directly impact – long-term real estate decisions. Armed with the latest insight on the industry trends and challenges facing this competitive market, our professionals provide viable, scalable and tailored solutions to some of the most successful legal service providers in the United States and around the world. The group comprises more than 100 brokers, specializing in strategizing and implementing real estate solutions on behalf of law firms.
C&W’s Data Center Advisory (DCA) Group comprises a global team of professionals that specializes in the delivery of precision real estate solutions for data center users and owners. The DCA Group is geographically diverse, covering relevant markets in North America and partnering with technical property specialists in Europe, Asia and South America. The Group is also multi-disciplinary, including brokerage professionals, business consultants, project and facility managers and appraisers. Our model is both collaborative and networked, offering value through economies of scale. Our clients are able to leverage the best practices, technical expertise, and market intelligence of our entire global team.
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FOR SPECIALIZED SECTORS, IT’S WHAT WE KNOW THAT COUNTS
Strategic Advisory Services Deliver Healthy Results STEWARD HEALTH CARE SYSTEM Location: Boston, MA, U.S. C&W Services Used: Capital Markets, Leasing Community hospital network Steward Health Care System engaged Cushman & Wakefield to address the significant capital needed for various efforts including base building and life safety systems enhancements. Steward’s lease and acquisition activities were reactionary, not strategic, therefore resulting in higher costs to the system and misguided real estate decisions. The final transactions allowed Steward to extract strategic capital from its real estate holdings while maintaining tenancy and control.
Record Data Center Expansion in Canada EQUINIX INC. Location: Toronto, Canada C&W Services Used: Leasing Looking to quickly expand, Equinix Inc. found itself running out of space in its existing multi-tenant Telecom Hotel. With a vacancy rate of only 4%, the finanical core had run out of suitable space and land sites were limited. Our Global Data Center Advisory group mounted an intensive search for sites not yet on the market. We located a former rental car site, owned by a family trust, which had once housed Upper Canada’s first Parliament Buildings built in 1778 that were destoyed during the War of 1812. A sudden bid to preserve the site by The City of Toronto required us to negotiate a land swap for a parcel of land across the street. Our team succesfully negotiated a 15-year lease for a 220,000-sq.-ft. designbuild Tier III data center with up to 20 megawatts of power. This ranked as the largest third-party data center transaction to be completed in Canada.
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CASE STUDIES
Our Edge JOHN BUSI Executive Vice President Global Head Valuation & Advisory
“Our greatest advantage is working with a seasoned staff of professionals who’ve experienced how cycles and markets behave. We’re also advantaged by having access to deal professionals who are calibrating the collective consciousness of the buyers and sellers, lessors and lessees, owners and operators – and we’re processing that intelligence into meaningful analytics.”
ALUATION & ADVISORY V PRACTICE GROUPS
Valuation & Advisory’s Practice Groups deliver specialized real estate strategies and solutions to clients in industries and sectors with unique operational, technical and business requirements. • Agribusiness, Natural Resources & Energy • Appraisal Management • Automobile Dealership • Dispute Analysis & Litigation Support • Financial Reporting • Gas Station & Convenience Store • Golf • Government • Hospitality & Gaming • Industrial • Manufactured Housing • Mission Critical Facilities • Multifamily • Office • Portfolio Services • Property Tax • Residential Development • Restaurant • Retail • Self Storage • Senior Housing / Healthcare • Sports & Entertainment
Valuation of Diverse Portfolio ROUTE INN JAPAN CO., LTD. Location: Japan C&W Services Used: Valuation & Advisory With a diverse portfolio ranging from budget, full-service and resort hotels, to golf courses, residences and offices, our Valuation & Advisory team in Japan provided the valuation for all of Route Inn Hotels’ owned assets. Cushman & Wakefield helped to simplify the process of using multiple valuers, which was creating an inconsistency in cap rates and cash flow analyses, and causing a problem for loan restructuring. This was solved by appointing our team as the required valuer for loan monitoring. Having completed the hotel valuations for six years, we were familiar with Route Inn’s hotel assets. This knowledge enabled our team to complete desktop valuations, both a time- and cost-saver for the company.
Cross-Border Valuation for Global Portfolio LASALLE INVESTMENT MANAGEMENT Location: London, UK C&W Services Used: Valuation & Advisory LaSalle Investment Management is the investment manager for Plaza Global Real Estate Partners (Plaza). Formed in 2012, Plaza invests in large real estate assets around the world. With leverage, Plaza had $1 billion worth of initial buying power and targeted quality long-term investments in excess of $100 million located in the world’s premier real estate markets. Their maiden purchase was the 103,000-square-foot mixed-used trophy building at 23 Savile Row, London, UK, which was followed by the acquisition of a 49.5% interest in 521 Fifth Avenue from SL Green Realty Corp. Managed centrally through Valuation & Advisory in London and utilizing our global platform, our team provides Plaza with quarterly, external valuations for regulatory purposes.
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CHAIRMEN’S PERSPECTIVES
Great Strides and Great Challenges
Almost two years into my role as Chairman of the Board after having served as CEO of EXOR, our majority shareholder, it is pleasing to reflect on the progress made in the execution of our strategic plan, which was approved by the Board of Directors in December 2010. Our strong performance in 2012 underscores the determination and commitment of our leadership teams, the wealth of talent within Cushman & Wakefield, and the positive changes and investments made over the past 18 months. Notably, our strong performance in 2012 also enabled us, for the first time in five years, to pay a dividend to our shareholders. We remain focused on executing our plan, which is critical to growing our business and delivering highquality, value-added services to our clients.
CARLO BAREL DI SANT’ALBANO Chairman of the Board and CEO, EMEA London
The world we are operating in is changing rapidly, presenting unique challenges and great opportunities for a firm like Cushman & Wakefield. Against a backdrop of macroeconomic instability across many parts of the globe, companies are searching for ways to streamline their operations at a time when workforce demographics are also profoundly influencing how organizations are managing and investing for the future. Technological advancements are transforming how companies connect with their employees and customers in ways that were unimaginable a decade ago. As well, International capital flows, wealth transfer and technology will drive a dramatic new phase in globalization. Cushman & Wakefield is a truly global brand with the great talent and unparalleled real estate and sector knowledge needed to help our clients navigate such change. Although we have made great progress in integrating our business across the globe, we must ensure that we work efficiently and creatively across service lines and regions. This will ultimately differentiate us from other service providers and ensure SCAN that we deliver the very best in class FOR VIDEO services that our clients deserve.
MESSAGE
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96 Years of Unwavering Client Focus
This impressive performance was largely driven by sustained growth in our global Corporate Occupier & Investor and Valuation & Advisory business lines, and led by the Americas region. It’s a testament to our global reach that in Brazil, alone, we now have 155 million square feet under management and 2,500 employees servicing our clients. Through 2012 and early 2013, our tradition for providing client-centric service resulted in the completion of some of the largest real estate assignments in the world including: the largest industrial lease in the UK in the last two years (one million square feet for Sainsbury); the largest H&M store in the world (589 Fifth Avenue, NYC); the largest office lease in San Francisco in a decade (Salesforce.com), and two of the largest sales in Hong Kong (Monterey Court in Jardine Lookout and Kowloon Commercial Center).
JOHN C. CUSHMAN III Co-Chairman of the Board Los Angeles In the course of a year, I see a good deal of the world, traveling regularly to markets in all three regions – the Americas, Asia Pacific and EMEA – where Cushman & Wakefield does business. This gives me a unique perspective on market trends and economies, and also on our people – and the motivations that drive them. By far, the most consistent message I hear – in every corner of the globe – is that Cushman & Wakefield is a firm built for our clients – and that we have a reputation for getting things done. For 96 years, our core values have remained steadfastly focused on: • Integrity and respect; • Collaboration and trust; • Confidence and mentorship. The name Cushman & Wakefield – unlike any other in the industry – has endured the test of time for two reasons: we have put our clients’ needs first and we always put the right people and platforms in place to provide the services our clients need. For these reasons – and despite global economic uncertainty – in 2012, Cushman & Wakefield posted the second highest gross revenue in its history at $2.05 billion.
Our Capital Markets group executed many high-profile assignments including: the $230-million senior mortgage loan for 100 Church Street in Manhattan; the 99-year, triple-net lease to RXR Realty at 75 Rockefeller Plaza in NYC; the $610-million sale of 100 Federal Street Tower in Boston on behalf of Bank of America and the 302 million sale of a Junction LP’s UK retail portfolio. CIS increased revenue 6.1% globally and 16.7% in the U.S. while adding nearly 100 million square feet to its managed portfolio, which now stands at 902 million square feet. CIS gained major assignments globally and regionally on behalf of some of the world’s largest corporations and institutions, including The Crown Estate in the U.K. Valuation & Advisory, as well, had some stellar wins in 2012, with marked growth particularly in the Americas. V&A’s retail sector business in the U.S. increased by 17% and, recently, its government practice was named global vendor for a Department of State contract spanning over 130 countries. As well, in order to deliver specialized client solutions across borders and services, V&A established a Global Accounts team consisting of 57 professionals in more than a dozen countries. On a company wide basis, Cushman & Wakefield continued to invest in targeted acquisitions and key hires as part of our strategic plan. Overall, SCAN in 2012, our firm hired more than FOR VIDEO 1,700 professionals worldwide.
MESSAGE
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FINANCIALS
Steady Growth from 2009 – Positive Effects of Strategic Plan
MICHAEL J. BARTOLOTTA Executive Vice President & CFO New York It is my pleasure to offer my perspective on Cushman & Wakefield’s financial performance in 2012. This represented our second full-year of execution of key initiatives of our long-term strategic plan, including a focus on balancing the global platform to deliver high quality service and a consistent service mix across markets on behalf of our clients, with a specific emphasis on increasing market share in key markets across the globe and continued targeted expansion into key locations to fill out strategic service line and regional needs. Under difficult market conditions and while still investing in the firm’s growth initiatives, we were able to complete 2012 with an increase in year-over-year gross revenue and substantial EBITDA growth. Our management team remains focused on executing our strategic plan and enhancing market share in key markets around the globe and looks forward to taking advantage of our strong brand and the optimism for further economic recovery in 2013. From a top-line perspective, our 2012 gross revenue of $2.05 billion, which was up almost 5% over last year when adjusted for currency, represents the second highest gross revenue in Cushman & Wakefield’s 95-year history – second only to 2007, which came in at just about $2.1 billion. Our commission and service fee revenue was up almost 4% excluding the impact of foreign exchange to $1.6 billion for the year ended December 31, 2012. With our solid revenue performance for the year and continued discipline on cost, we were able to drive EBITDA to almost $128 million for full-year 2012, a 14.9% increase following a 19.7% increase in 2011 over 2010. In addition net income improved $28.3 million to $43.2 million and net debt to EBITDA was a healthy ratio of 0.8. 42
If we look at the 2012 results in a little more detail we see that gross revenue, which includes reimbursed costs – managed properties and other costs, increased $54.4 million, or 2.7%, or 4.7% excluding the impact of foreign exchange, to $2,050.1 million, while commission and service fee revenue, which excludes reimbursed costs – managed properties and other costs, increased $24.7 million, or 1.6%, or 3.8% excluding the impact of foreign exchange, to $1,597.0 million for the year ended December 31, 2012, despite the slow transactional activity due to the continued global economic uncertainty that existed throughout 2012. The growth in commission and service fee revenue and the reduction in operating expenses partially offset by an increase in cost of services sold and slightly higher commission expense drove a year-over-year increase in C&W’s EBITDA of $16.6 million to $127.7 million, as compared with $111.1 million in the prior year. This positive growth and a reduction in interest expense, other expenses and income tax expense led to an improvement in the income attributable to owners of the parent of $28.3 million to $43.2 million for the full-year 2012, as compared with $14.9 million for the prior year. Commission and service fee revenue experienced positive growth across all regions, even including the negative impact of foreign exchange movements, with the exception of EMEA, which reported a decline, primarily due to the ongoing challenging economic and market conditions. From a service line perspective, the year-over-year growth in commission and service fee revenue was driven by continued CIS performance throughout 2012, with the largest increase in the Americas, where revenue increased by $21.2 million, or 11.4%, continued growth in the V&A business, also led by the Americas region, which increased $10.1 million, or 8.4%, modest growth in Leasing and essentially flat revenues in Capital Markets. In addition to the solid P&L performance in 2012, we also continued to maintain a strong balance sheet. As of December 31, 2012, the Company’s net debt position was $99.6 million. With the full-year 2012 EBITDA of $128 million, the net debt to EBITDA ratio is only 0.8 – a strong indicator of C&W’s ability to service its debt obligations.
2012
cific 2012
GR 5.8%
2012 V&A
2012 cific
GR 5.8%
1.0 0.6 CAGR 7.3%
0.5 0.3
CAGR 17.3%
0.3 0.2
2009 2010EMEA 2011 Asia Pacific 2012 Americas
GROSS REVENUE ($BILLIONS) GROSS GROSS REVENUE REVENUE ($BILLIONS) ($BILLIONS) EBITDA ($MILLIONS)
Americas 2009 2009
EMEA 2010 2010
Asia Pacific 2011 2012 2011 2012
CAGR 9.4%
1.0 0.4 0.6 60 CAGR 7.3% CAGR 17.3%
CAGR 5.8%
2009 2010 2011 Asia2012 2012 Leasing CIS EMEA Capital V&A Americas Pacific 2009 2010 2011 Markets
GROSS REVENUE ($BILLIONS) HEADCOUNT (THOUSANDS) EBITDA NUMBER($MILLIONS) OF TRANSACTIONS (THOUSANDS)
2009 Americas Americas
2010 EMEA EMEA
2011 2012 Asia Pacific Pacific Asia
7 CAGR 9.2% 35 CAGR 9.4% 0.8 120 6 30
CAGR 4.5% CAGR89.2% 11.2% CAGR
NS)
HEADCOUNT (THOUSANDS) TRANSACTIONS – TOTAL SQ FT (MILLIONS) NUMBER TRANSACTIONS (THOUSANDS) VALUE OFOF TRANSACTIONS ($BILLIONS)
EMEA EMEA EMEA EMEA
840 800 $100
2012 V&A 2012 2012
AsiaPacific Pacific Asia Asia Pacific Asia Pacific CAGR 17.3% CAGR 22.4% CAGR 4.5% CAGR 11.2%
735 700
2010 EMEA EMEA
Am $150 40 35 120 30
420 0.4 315
20 60 15
CAGR 7.3%
CAGR 17.7%
1 0.0 00
CAGR 17.3%
210 0.2
2 0.3 30
Americas 2010 2009 2009 2010 EMEA2011 2011
Asia2012 Pacific 2012
EBITDA ($MILLIONS) NUMBER OF TRANSACTIONS (THOUSANDS) TRANSACTIONS – TOTAL SQ FT (MILLIONS)
Americas Americas
EMEA EMEA
2010 2010 2010
2011 2011 2011
EMEA EMEA
40 $100 1000
2012 2012 2012
Asia Asia Pacific Pacific CAGR 22.4% CAGR CAGR11.2% 6.8%
35
CIS 2010 2010
Americas Americas
EMEA EMEA
Capital 2011 2011 Markets
0
V&A 2012 2012
0 2
NUM VALU
AsiaPacific Pacific Asia CAGR 4.5% 17.3% CAGR 22.4% CAGR
7 700 680 600
NUMBER OF TRANSACTIONS (THOUSANDS) VALUE OFFEET TRANSACTIONS ($BILLIONS) SQUARE MANAGED (MILLIONS)
Americas Americas
Leasing 2009 2009
8 800 $100
10 200 30 00 0 2009 2009 2009
5
HEADCOUNT (THOUSANDS) TRANSACTIONS – TOTAL SQ($BILLIONS) FT (MILLIONS) VALUE OF TRANSACTIONS
Asia Pacific Pacific Asia CAGR 17.3% CAGR89.2% 11.2% CAGR
3010
CAGR 5.8%
15 0.0 00
Am Am 40 $100 35 80 30
5 500 60 4 400
25 60 20
340 300
40 15
2 200 20 1 100
10 20 5
0
00 2009 2009
2010 2010
2011 2011
00
2012 2012
TRANSACTIONS – TOTAL (MILLIONS) SQ FT (MILLIONS) SQUARE FEET MANAGED
Americas Americas
EMEA EMEA
800 1000
VALU
Asia Pacific Pacific Asia
Am $100
CAGR 17.3% CAGR 6.8%
700
680 600 30
80 800 30
800 600
80
525 500 60 420 400
25 60 600 20
500 600 400
60
340 300 15
40 400 15
400 300
40
210 200 20 15 100
10 20 200 5
200 200 100
20
012 2012
000 0 2009 2009 2009 2009
NS)
TRANSACTIONS – TOTAL (MILLIONS) SQ($BILLIONS) FT (MILLIONS) SQUARE FEET MANAGED VALUE OF TRANSACTIONS
Americas
2010 2010 2010 2010
EMEA
2011 2011 2011 2011
2012 2012 2012 2012
Asia Pacific
00
2009 2009
2010 2010
2011 2011
2012 2012
VALUE OF TRANSACTIONS ($BILLIONS)
Americas
EMEA
Asia Pacific
0 0
2
EBITD NUM
2011 2012 Asia Pacific Pacific Asia
CAGR 4.5% CAGR 11.2% 735 CAGR 9.2% CAGR 9.4% 0.8 630
5 100 2011 Capital 2011 2011 Markets
0.0 0
2012 2012 V&A
4
20 400 60 15 300
2010 CIS 2010 2010
2011 2011 Capital Markets
9025
4 20 0.4 60 3 15
00 0.0 0 2009 Leasing 2009 2009
2009 Americas Americas
2011Asia Pacific 2012
CAGR 4.5% CAGR 89.2%
35 700 120 30 600
CAGR 5.8%
2010 2010 CIS
525 0.6
25 90 500
CAGR 17.3%
2009 2009 Leasing
5 0.9 90
5 25 0.6 90
2 10 0.2 30 1 5
0.0 0 0.0
0.3 30
CAGR 5.8%
$1.0 840
$15040 800
8 $1.0 $150 40
Americas Americas Americas Americas
2010 EMEA
CAGR 17.3%
0.5 30 0.2
GROSS REVENUE ($BILLIONS) HEADCOUNT (THOUSANDS) (THOUSANDS) NUMBER OF TRANSACTIONS
CAGR 9.8%
0.6 60 3
CAGR 17.7%
0.0 0.0 0.0 0
Pacific CIS EMEACapital AsiaV&A Markets
7 1.2 120 6
CAGR 89.2% CAGR 9.7%
1.5 0.6 0.9 90
0.5 0.2 0.3 30
2009 Americas $1.5 $150 8
CAGR 9.2%
Americas Leasing
GROSS REVENUE ($BILLIONS) EBITDA ($MILLIONS) HEADCOUNT (THOUSANDS)
CAGR 9.8% $2.5 $1.0 $1.5 $150
2.0 0.8 1.2 120
0.0 0.0
CAGR 5.8%
CAGR 17.7%
CAGR 17.7%
0.0 0.0
0.6 60
CAGR 7.3%
012 V&A
cific ific
1.0 60 0.4
0.6 0.4
2009 2009
2010 2010
2011 2011
SQUARE FEET MANAGED (MILLIONS)
Americas
EMEA
0
2012 2012
Asia Pacific
43
WORLD REGION LEADERSHIP PERSPECTIVE
AMERICAS
Clients Focus Stands Behind Solid 2012
Overall, Cushman & Wakefield delivered solid results in the Americas, posting a strong year-end finish and revenue growth in all service lines. The Americas continue to be the largest revenue region in the world for our firm. Building upon that, we hired more than 670 professionals throughout the Americas last year – and we continue to expand our footprint in the region. In addition, we executed the strategic acquisition of Cousins Properties’ services group in Dallas and Atlanta. This move alone added 122 talented professionals to our organization, while enhancing our project management and leasing capabilities in these two important markets. We also continued to grow our Specialty Practice Groups, including Healthcare, Data Center and Legal Sector Advisory, as well as our Financial Consulting and Business Consulting Groups. Our investments in these groups reflect our continued commitment to our clients to be the leading “thought and solutions leader” in the real estate industry today.
JAMES UNDERHILL CEO, Americas
CUSHMAN & WAKEFIELD GLOBAL REACH
60 COUNTRIES 253 OFFICES
At the same time, we continue to build our Alliance Program with new partnerships in Nevada, Idaho, North Carolina, California, Minnesota, Nebraska, Peru and Waterloo, Canada – further balancing our platform and service mix. By every measure, Cushman & Wakefield is creating tremendous value for our clients in the Americas and we are committed to driving even greater results in the years ahead.
AMERICAS
1 0 COUNTRIES 81 FULLY OWNED AND OPERATED OFFICES 81 ALLIANCE OFFICES 2 JOINT VENTURES EMEA
3 4 COUNTRIES 34 FULLY OWNED AND OPERATED OFFICES 19 ALLIANCE OFFICES ASIA PACIFIC
44
16 COUNTRIES 29 FULLY OWNED AND OPERATED OFFICES 7 ASSOCIATE OFFICES
SCAN FOR VIDEO MESSAGE
EMEA
Broadening Demand
2012 was clearly a challenging year across the region. Overall, our EMEA 2012 gross revenues were down marginally by 2.4% on 2011 to US$424 million. Despite the macro economic challenges, we remained focused on executing our strategy in the region. We made significant investments in core markets such as London, Germany, Russia and Turkey, bringing in top talent and restructuring leadership teams. Across EMEA in 2012, we recruited a total of 306 employees. Our strongest performing countries were The Netherlands, Belgium, Czech Republic and Sweden, with France and Italy also putting in a robust performance. We continue to invest in and perform strongly in Valuation & Advisory and Corporate Occupier & Investor Services, which saw gross revenues increase 5.7% and 3.5% respectively (at local currency levels). Leasing remained on par with 2011, as the office sector continued to experience weaker demand, whilst retail performed well in both the UK and France compared to the previous year.
CARLO BAREL DI SANT’ALBANO Chairman of the Board and CEO, EMEA
ASIA PACIFIC
Focus on Global Delivery
Our Capital Markets performance remained flat through 2012. There were nonetheless signs of a broadening in demand as investors began to seek out more opportunities. Generally, we got off to a strong start in 2013, notably in the UK. Whilst we remain cautious, we are already reaping the benefits of the SCAN significant changes made to our business last year, and we FOR VIDEO remain focused on driving growth in line with our plan. MESSAGE
Asia Pacific is the fastest growing economy in the world – a focus area for most global companies today. Growth in this dynamic region is also being driven by our expanding domestic economies and demographic advantages. In the real estate space, companies are increasingly demanding more value and an integrated approach to minimize risk and enhance delivery efficiency. Our focus is now on global delivery and collaboration as opposed to taking a more traditional geographical view. We have successfully created a matrix organization where there are global and regional service lines that offer seamless and integrated solutions to our clients across countries. Over the last two years, we significantly expanded and restructured our regional leadership team and we added close to 700 people throughout Asia to core services lines. As a result of this renewed approach and the successful implementation of our strategic plan, our revenue has grown by approximately 65% in the last three years.
SANJAY VERMA CEO, Asia Pacific
We are now able to provide multi-country and multi-service line solutions with far greater ease and speed – a valued capability given the diversity and complexity of Asian markets. In 2012 alone, our Corporate Occupier & Investor Services team won more regional mandates than in the last five years put together from global occupier clients to provide transaction management, project management and facilities management services. Similar inroads are also being made by our Capital Markets, Brokerage and Valuation SCAN FOR & Advisory service lines. These are truly exciting times for VIDEO our clients and our firm. MESSAGE 45
SERVICE LINE LEADER MESSAGES
CAPITAL MARKETS
Confidence Takes Hold
Despite the uncertainty last year, Cushman & Wakefield successfully completed some of the most noteworthy transactions in each of our three regions. The common denominator in all of our “wins” is the highly collaborative effort we offer our clients across geographies and service lines, ensuring the delivery of best-in-class advice and execution. Our Capital Markets leadership remains focused on delivering key aspects of our strategic plan, and I’m proud to say that last year we added approximately 50 professionals to our team in the U.S. and Canada, South America, Asia Pacific and EMEA.
GREGORY S. VORWALLER Executive Vice President, Global Head, Capital Markets
CORPORATE OCCUPIER & INVESTOR SERVICES
Aligned to Our Clients’ Needs
We forecast that investment sales and acquisitions volumes will rise by about 15% in 2013 over last year to reach about $1 trillion globally. By global region: in the Americas, the equity and debt markets are flush with capital in search of relative yield, which should result in a healthy transaction market, especially in the U.S.; in APAC, the resumption of the lending market in China should help bolster activity levels in the entire region; and, in EMEA, we are beginning to see some bright lights with increased bidder interest for SCAN FOR quality deals, along with an emergence of capitulation among VIDEO financial owners that should result in more opportunity. MESSAGE
We’re proud of our measurable performance for many of the world’s leading corporations and institutions, and of our track record of 435 million square feet in wins and renewals over the past year. Our results directly reflect the performance we are able to deliver for our clients. Customized solutions and tools help real estate leaders create value for the C-Suite. Whether a growing bank needs new branches to build both clientele and brand strength or a multinational conglomerate is seeking to implement a competitive new workplace strategy, we work closely with our clients to develop and apply exciting new standards, while also carefully managing change. For investors, we approach each asset as if we were the owner, positioning properties and operating them to maximize the investment strategy. Through the integration of our top talent in asset and property management, landlord representation and our Capital Markets teams, we manage income and expenses to create both immediate and long-term value.
JOHN C. SANTORA President & CEO, Global Head, Corporate Occupier and Investor Services
46
Our diverse teams are well known for our informed perspective and command of global best practices. But what really sets us apart is our ability to listen and respond. CIS teams work with clients to delve into specific corporate priorities. We respect client cultures. We keep what’s working, and SCAN find inventive solutions when change is needed. FOR VIDEO MESSAGE
LEASING
Global and Street-Level Perspective
In 2012, our professionals completed more than 33,400 leasing transactions globally, valued at more than $46.4 billion. In addition to acting as exclusive leasing agent for many of the most prestigious properties worldwide, we also arranged the most significant and high-profile leases signed last year, including the largest industrial lease in the UK in the last two years (one million square feet for Sainsbury), the largest H&M store in the world (589 Fifth Avenue, NYC), and the largest office lease in San Francisco in a decade (Salesforce.com). In 2012, we further strengthened our leasing services in our three regions of the Americas, EMEA and Asia Pacific. Our clients looking to expand operations across borders found value in our new International Desk, offering coordinated access to focused research and knowledgeable professionals in markets around the world. Likewise, our globalized Retail Services leadership structure, with a global head of retail and three regional heads, provides added value to our retail clients who are seeking to locate in new and emerging markets. Across all asset classes, we are dedicated to providing our clients with full local, regional and global knowledge and support.
VALUATION & ADVISORY
Minimizing Value Uncertainty
There’s no durability in something that’s constantly in a state of change, and change has been the only constant in property valuation over the past decade. Markets move, cycles ebb and flow and valuations will reflect market sentiments of the day. At Cushman & Wakefield, we understand all of the uncertainty embedded in the valuation process and while we can’t eliminate it we’re doing our best to contain it. What we’re also learning as the world flattens is that global real estate investment is fostering a focused singularity in a multidimensional world. While we all share the same sun, the same moon and the same stars, we don’t share the same resources, market transparency or valuation standards. So we’re minimizing uncertainty in how we approach our practice in these key areas: • Technology – We’re deploying global technology platforms that align our deliverables and create access to global intelligence. • Competencies – We’re pushing out asset-class specializations across geographies.
JOHN D. BUSI Executive Vice President, Global Head, Valuation & Advisory
• E xperience and Bench Strength – Our greatest advantage is working with a seasoned staff of professionals who’ve experienced how cycles and markets behave. We also access deal professionals who calibrate the collective consciousness of buyers and sellers, lessors and lessees, SCAN owners and operators – and we process that intelligence FOR VIDEO into meaningful analytics.
MESSAGE
47
HIGHLIGHT CASE STUDIES
AMERICAS
Three Landmark Transactions
Iconic Art Deco HQ Rejuvenates Market
Record Data Center Expansion in Canada
NY, NJ, MA, U.S.
BROWN BROTHERS HARRIMAN
EQUINIX INC.
C&W Services: Capital Markets, Corporate Occupier & Investor Services, Leasing
Boston, MA, U.S.
Toronto, ON, Canada
C&W Services: Capital Markets, Corporate Occupier & Investor Services, Leasing
C&W Services: Leasing
Consolidation Launches Office Tower & Transforms Toronto’s Financial Core
Mexico Locations Meet Business Objectives
One-Million-Square-Foot Blend/Extend
DELOITTE
ERICSSON TELECOM S.A. DE C.V.
Fort Worth, TX, U.S.
Toronto, ON, Canada
Mexico City
C&W Services: Leasing
C&W Services: Corporate Occupier & Investor Services, Leasing
C&W Services: Corporate Occupier & Investor Services
V&A Appraises Largest Retail Deal in the United States in 2012
New England’s Largest Build to Suit
BANK OF AMERICA
GOLDMAN SACHS BANK AND GOLDMAN SACHS MORTGAGE CO. Brooklyn, NY, U.S. C&W Services: Valuation & Advisory
48
GREEN MOUNTAIN COFFEE ROASTERS INC.
GENCO
One of Mexico City’s Largest Land Sales GRUPO LAR
Burlington, MA, U.S.
Mexico City, Nuevo Polanco, Mexico
C&W Services: Capital Markets, Leasing
C&W Services: Leasing
Acquiring Stores Across the World
Innovative Tenant for Emerging Tech Corridor
Cross-Border Valuation for Global Portfolio
Global
HUDSON PACIFIC PROPERTIES, INC.
C&W Services: Leasing
San Francisco, CA, U.S.
LASALLE INVESTMENT MANAGEMENT
C&W Services: Leasing
London, UK
H&M HENNES & MAURITZ AB
C&W Services: Valuation & Advisory
Bringing Toys Back to the Toy Building
Negotiation Expertise Secures Broadcast Studio
Urban Office Deal of the Year
New York, NY, U.S.
NBC UNIVERSAL
Dallas, TX, U.S.
C&W Services: Leasing
Fort Worth, TX, U.S.
C&W Services: Leasing
LEGO SYSTEMS, INC.
REEL FX, INC.
C&W Services: Capital Markets, Leasing
Facilities Management for 13 Sites
Strategic Portfolio Optimization for Rona Canada
Growth Requirements Spur Downtown Expansion
Multiple locations in Mexico
RONA INC.
SALESFORCE.COM
C&W Services: Corporate Occupier & Investor Services
Toronto, ON, Canada
San Francisco, CA, U.S.
C&W Services: Leasing
C&W Services: Leasing
ROBERT BOSCH MEXICO
49
HIGHLIGHT CASE STUDIES
Golden Square Shopping Mall
Strategic Advisory Services Deliver Strategic Results
New Location Supports Mission and Potential Growth
Sﾃ｣o Paulo, Brazil
STEWARD HEALTH CARE SYSTEM
SUTTER HEALTH
C&W Services: Capital Markets
Boston, MA, U.S.
Northern California, U.S.
C&W Services: Capital Markets, Leasing
C&W Services: Leasing
Measurable Savings Through Good Communication
Portfolio Valuation Completed in Record Time
Rapid Response for Critical Properties
SYMANTEC CORPORATION
TELEFﾃ年ICA S.A.
Indianapolis, IN, U.S.
Mountain View, CA, U.S.
Sﾃ｣o Paulo, SP, Brazil
C&W Services: Corporate Occupier & Investor Services
C&W Services: Valuation & Advisory
C&W Services: Corporate Occupier & Investor Services
New HQ Balances Quality and Flexibility
Facilitating Expansion for Luxury Retailer
Sophisticated Understanding Wins Global Data Center Mandate
BRACEWELL & GIULIANI LLP
BURBERRY
CONFIDENTIAL CLIENT
London, UK
London, UK
Global portfolio
C&W Services: Leasing
C&W Services: Leasing
C&W Services: Leasing
SQUARESTONE BRASIL
WELLPOINT, INC.
EMEA
50
Largest Trade for ECE Shopping Centre Fund
Portfolio Valuation for Residential Developer
Acquiring Stores Across the World
ECE REAL ESTATE PARTNERS
Global
Hamburg, Germany
GROUP LSR (JOINT STOCK COMPANY)
C&W Services: Capital Markets
Saint Petersburg, Russia
H&M HENNES & MAURITZ AB C&W Services: Leasing
C&W Services: Valuation & Advisory
Acquiring Luxury Flagship Stores
Supply Chain Acquisition
JIMMY CHOO
JOHN LEWIS PARTNERSHIP
Europe
Buckinghamshire, UK
C&W Services: Leasing
C&W Services: Leasing
Cross-Border Valuation for Global Portfolio LASALLE INVESTMENT MANAGEMENT London, UK C&W Services: Valuation & Advisory
Sale of London Stock Exchange Headquarters
Strategic Advice Across Europe
MITSUBISHI ESTATE COMPANY
Europe
SAMSUNG SRA ASSET MANAGEMENT
Otemachi, Japan
C&W Services: Leasing
London, UK
C&W Services: Capital Markets
PRIMARK STORES LTD
30 Crown Place – First Overseas Investment
C&W Services: Capital Markets
51
HIGHLIGHT CASE STUDIES
Measurable Savings Through Good Communication
Successful U.S. Embassy Relocation
SYMANTEC CORPORATION
London, UK
WINCANTON PLC / POUNDLAND
Mountain View, CA, U.S.
C&W Services: Corporate Occupier & Investor Services
Hoddesdon, Hertfordshire, UK
Sophisticated Understanding Wins Global Data Center Mandate
Portfolio Valuation Across China
C&W Services: Corporate Occupier & Investor Services
U.S. GOVERNMENT
Disposal Leads to Acquisition Appointment
C&W Services: Leasing
ASIA PACIFIC
Ideal Location for First Flagship Store BURBERRY Cheongdam, Seoul, South Korea
CONFIDENTIAL CLIENT
COSMOS MACHINERY ENTERPRISES LTD.
C&W Services: Leasing
Global portfolio
Hong Kong and various locations in the PRC
C&W Services: Leasing
C&W Services: Valuation & Advisory
Major IKEA Renovation Causes Minimum Business Disruption
Tailor-made Solutions Help Complete Valuation of Healthcare Asset Portfolio
Global
IKEA BEIJING CO., LTD
C&W Services: Leasing
Beijing, China
RELIGARE HEALTH TRUST TRUSTEE MANAGER PTE. LTD.
Acquiring Stores Across the World H&M HENNES & MAURITZ AB
C&W Services: Corporate Occupier & Investor Services
52
India C&W Services: Valuation & Advisory
Measurable Savings Through Good Communication
C&W Helps Major Pharma Secure Space
SYMANTEC CORPORATION
TEVAPHARM INDIA PVT. LTD.
Mountain View, CA, U.S.
Sanand, Gujarat, India
C&W Services: Corporate Occupier & Investor Services
C&W Services: Capital Markets
53
CUSHMAN & WAKEFIELD GIVES BACK
Giving back to support communities and those less fortunate is a priority at the heart of our brand, fueling the passion of our people around the world.
54
55
CUSHMAN & WAKEFIELD LEADERSHIP
Board of Directors
CARLO BAREL DI SANT’ALBANO
MICHAEL J. BARTOLOTTA
JOHN C. CUSHMAN III
ALESSANDRO NASI
JOHN C. SANTORA
SHAHRIAR TADJBAKHSH
Chairman of the Board & CEO, EMEA London
Executive Vice President & CFO New York
Co-Chairman of the Board Los Angeles
Managing Director EXOR Italy
President & CEO, Global Head Corporate Occupier & Investor Services New York
Chief Operating Officer EXOR Torino, Italy
World Regions
Global Service Lines
JAMES UNDERHILL
SANJAY VERMA
CARLO BAREL DI SANT’ALBANO
GREGORY S. VORWALLER
JOHN C. SANTORA
JOHN D. BUSI
CEO, Americas
CEO, Asia Pacific
Chairman of the Board & CEO, EMEA
Executive Vice President Global Head Capital Markets
President & CEO, Global Head, Corporate Occupier & Investor Services
Executive Vice President, Global Head, Valuation & Advisory
Global Corporate Departments
56
CELINE T. CLARKE
MICHAEL J. BARTOLOTTA
JOYCE M. PHILLIPS
GENE BOXER
Executive Managing Director, Corporate Communications, Global Head
Executive Vice President & CFO New York
Executive Vice President, Human Resources, Global Head
Executive Vice President, Global General Counsel & Secretary
WORLD HEADQUARTERS Cushman & Wakefield, Inc. 1290 Avenue of the Americas New York, NY 10104 1-212-841-7500 T CANADA HEADQUARTERS Cushman & Wakefield 33 Yonge Street, Suite 1000 Toronto, Ontario M5E 1S9 Canada 1-416-862-0611 T 1-416-359-2613 F MEXICO HEADQUARTERS Cushman & Wakefield Mexico Corporativo Arcos Norte B Paseo de los Tamarindos No. 60, 2o.piso Col Bosques de las Lomas Mexico, D.F. 05120 Mexico +5255-8525-8000 T +5255-8525-8091 F SOUTH AMERICA HEADQUARTERS Cushman & Wakefield South America Building Berrini 500 Praca Jose Lannes, 40 – 3 fl. São Paulo 04571-100, Brazil +5511-5501-5464 T +5511-5501-5144 F EUROPE, MIDDLE EAST, & AFRICA HEADQUARTERS Cushman & Wakefield LLC 43/45 Portman Square London W1A 3BG England +44-20-7935-5000 T +44-20-7152-5360 F ASIA PACIFIC HEADQUARTERS Cushman & Wakefield 9/F St. George’s Building 2 Ice House St, Central Hong Kong, China +852-2956-3888 T +852-2956-2323 F
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Idaho Boise
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Illinois Chicago Chicago Suburban
South Carolina Charleston* Greenville/ Spartanburg*
Maine Portland Maryland Baltimore Bethesda Massachusetts Boston Michigan Detroit* Grand Rapids* Holland*
Austria Vienna*
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Bahrain Manama
Spain Barcelona Madrid
Washington Bellevue* Seattle*
Bulgaria Sofia*
Wisconsin Milwaukee* CANADA Alberta Calgary Edmonton* British Columbia Vancouver Victoria Manitoba Winnipeg* New Brunswick Fredericton* Moncton* Saint John* Newfoundland St. John’s* Nova Scotia Halifax* Ontario Kitchener Waterloo London Newmarket Ottawa* Toronto – Central Toronto – East Toronto – West Prince Edward Island Charlottetown*
MEXICO
Puerto Rico San Juan*
Kentucky Louisville*
Slovakia Bratislava
Oregon Portland
Hawaii Honolulu
Alisa Zotimova Head of Alliance Program & New Markets, EMEA T +44.20.7152.5136 Alisa.zotimova@eur.cushwake.com
EMEA
Quebec Montréal Central Montréal Suburban
Georgia Atlanta Savannah*
Indiana Bloomington* Indianapolis*
Virginia Fredericksburg* Lynchburg* Newport News* Norfolk/Virginia Beach* Richmond* Roanoke* Tysons Corner Williamsburg
Oklahoma Oklahoma City* Tulsa*
Pennsylvania Harrisburg Philadelphia Philadelphia-Sub Pittsburgh*
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Belgium Brussels
Sweden Stockholm
Channel Islands Jersey*
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UAE Dubai
England Birmingham London – City London – West End Manchester Thames Valley Finland Helsinki* France Paris Germany Berlin Düsseldorf Frankfurt Hamburg Munich Greece Athens* Hungary Budapest Ireland Cork* Dublin* Israel Tel Aviv* Italy Milan Rome
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