Accounting firm KPMG has followed rivals EY and PwC into the real estate arena, setting up a property advisory division to service its existing clients and provide advice to other corporates and government agencies.
EY was the first of the big three accounting firms to make a significant splash in property, luring former Colliers International agency director Brett Wilkins in 2012 to head up its real estate advisory practice.
PwC caused a stir in the market earlier this year when it was appointed by the Insurance Commission of Western Australia to handle the sale of an $800 million portfolio, which includes three suburban shopping centres and three CBD office buildings.
Mr Arundell told Business News the division would provide strategic real estate advice to clients in the areas of cost optimisation and value enhancement, infrastructure analysis, portfolio and asset management, transactions and finance, as well as advisory and valuation.
He described the establishment of a real estate advisory arm as a logical step for KPMG in its efforts to provide an enhanced service for its existing clients.
“It’s coming back to that service offering within the firm, where you can capture value across all aspects of the value chain,” Mr Arundell said.
“Probably what was lacking in that value chain was corporate property advice.
“Every company has a real estate piece in it, whether that’s a leasing piece or an ownership piece, every company touches property.
“But it’s not always their core competency; so with that in mind, if we can provide them independent advice with regards as to how that real estate piece fits into their puzzle, from our point of view we’re adding value.”
Mr Arundell said KPMG would not necessarily set out to compete with the big six commercial real estate agencies – Colliers International, JLL, Knight Frank, CBRE, Savills and Burgess Rawson – but instead offer a more independent service.
“We see a differentiation in ourselves from other real estate firms in that we’re not conflicted in any way, shape or form,” he said.
“We won’t be there pushing a barrow in relation to a leasing engagement or a valuation engagement or a sales engagement.
“We’ll be providing an independent strategic overview, so from that point of view we see that as the most important piece.”
Mr Arundell said he expected that independent offering would be in high demand, in a market where commercial tenants had a number of options in front of them and attractive terms to move.
“There are a lot of things you have to take into account. While people might be showing you a 40 per cent incentive, the question is ‘is this the location you want to be in?” he said.
“When you look at amenity for your staff, transport links, lunch options and things like that, you have to be able to weigh up those criteria a little bit differently to what the financial incentive is.”