GUEST COMMENT: The new real estate hiring landscape
Despite the numerous challenges encountered in the UK real estate market over the past eighteen months, stability seems to be returning.
After an initial flurry of 'trawling' by clients just before the summer, people are genuinely starting to hire. Recruitment is taking place, albeit at lower volumes than two years ago.
So who's being hired?
Property debt restructuring bankers
On the corporate banking side, demand for property debt restructuring bankers remains high. Up until now, the big institutions have been redeploying their front office loan origination and relationship management teams into debt restructuring. However, more recently we've started to see the same institutions hiring externally to complement their internal recruitment efforts. We expect this trend to continue.
Interestingly, we're also beginning to see some hiring in property debt relationship management again - and not only by the German banks who have continued to lend throughout the credit crunch. Some banks closer to home are hiring here too.
Investment analysts
On the buy-side, a shortage of good quality assets for sale has limited the activity of most real estate private equity firms and funds over the past eighteen months, despite attractive asset values. The decision by banks not to foreclose on loans is causing further frustration. This has resulted in a lack of hiring by these firms and in some cases, redundancy programs. However, recent high profile transactions such as Broadgate Circus and Birmingham Bullring are a sign of a return to market liquidity. As banks look to reduce their exposure to property and start off-loading assets, it is hoped there will be more buying opportunities. In anticipation of this, we are seeing demand again for high calibre investment analysts among our buy-side clients.
Ex-real estate investment bankers
An interesting dynamic in the property market over the past twelve months has also been the emergence of the property "corner shop," usually set up by high profile ex-investment bankers. The function of these outfits is to provide fundraising, restructuring or debt advisory services to clients. The most high-profile example is Alpha Real Estate Advisers. This was set up by John Carrafiell, former co-head of real estate investing at Morgan Stanley and recently advised Songbird on its equity capital raising. We know of at least ten such firms that have been set up in the last twelve months or so and are recruiting ex-real estate bankers for a number of them.
Staff for the Big Four, property agencies and turnaround houses
The big property agency/advisory firms have had their fair share of problems over the past eighteen months and have all been through cost cutting exercises, including redundancy programs. They are starting to hire again, particularly in the areas of debt advisory, special servicing and restructuring advisory. The Big Four accounting firms have recently bolstered their ranks in the real estate corporate finance space and Ernst & Young continue to hire managers for their London business. There is also evidence of US boutique restructuring/turnaround houses looking to set up real estate platforms here in Europe. This is creating hiring opportunities at all levels and we expect this to grow in 2010.
Whilst recruitment levels are nowhere near 2007, real estate is definitely becoming more active. In 2010 we are expecting things to get even better.
