Consolidation in Real Estate Asset Management

The demand for a professional management of real estate is higher than ever, says a study from EY Real Estate and Triuva. However, many expect a further consolidation of the industry as complexity and costs rise.

Specialists demanded
Asset managers that focus on a specific use case of real estate or on specific regions are more likely to succeed than generalists, says the study. This is due to an increasing complexity of the business and due to the fact that small- and middle-sized companies outsource a wider range of their tasks. 80 percent of survey participants expect, that a higher degree of specialisation will emerge in the industry.

Growth is limited
Although the demand for professional real estate asset management is increasing, opportunities for organic growth are limited, say the study. “Personnel resources and the lack of opportunities hinder the expansion of asset managers,” says EY Real Estate. Capital on the other hand and the raising of it is not problem for firms.

Consolidation expected
Mergers and acquisitions are thus the only change to profit from the increasing demand and the higher expectations of customers. Being in a phase of consolidation, every third asset managers has received at least one buy- or takeover offer during 2015. On the other hand, 80% of managers say they want to grow organically, while only 20% want to growth through M&A transactions.