Changing faces

The name of King Sturge, a company with a history that can be traced back to the 1760s, is to finally disappear from the real estate market. The takeover of the company by Jones Lang LaSalle is yet another significant result of the crisis which continues to choke the global economy. Many similar transactions are taking place at the moment, and specialists are in no doubt that further mergers and acquisitions lie ahead of us. For analysts and financial experts this is a normal, cyclical phenomenon. But it also signifies a worrying trend. As analysts point out, it is generally only the biggest global corporations that can currently count on securing financing. With the big money only going to the largest companies, hard times are on the cards for the smaller players. Nevertheless, the representatives of such acquisitive companies insist that the changes are good for their clients: global platforms are being created that will be more effective and better able to satisfy the needs of companies operating on an international scale. However, doesn't this also mean less competition? The latest transactions provide evidence that corporations in an expansive mood are buying out smaller, regional companies more and more often, hoovering up almost every revenue-generating segment. This may be understandable considering the state of the economy; however, it leaves the future uncertain in a number of ways - especially for the many people made redundant by the companies that have been taken over. Adding to the general insecurity are the increasingly acute economic problems in Europe and the USA. It seems that nobody has any idea how to rescue Greece, which is drowning in debt, while Ireland, Portugal and Spain look like being the next to go under. The turmoil has even brought into question the survival of the European currency itself. Only a few months ago it seemed that the economy was finally emerging from its stagnation, but now many voices can be heard warning that we are in fact about to be hit by the second wave of the crisis. If this chilling scenario turns out to be true, what would be the scale of this? And how is it going to impact the property market? Nobody seems to know - and this just ratchets up the feeling of insecurity even further. However, those who are acquiring companies are looking at the future with more optimism. Convinced that we have brighter future ahead of us, they argue that the consolidation in the sector is necessary and will enable better management. Let's just hope that they are right. The only one thing we can say with any certainty at this point is that changes are on the way, big ones. In a year or two the face of the real estate market will be very different from how it is today.