DTZ (DTZ)

Property services firm DTZ knows only too well that its market is shrinking. Last week, its Money into Property report predicted that global property investment transactions would fall 30 per cent in 2008. Such deals generated nearly a third of DTZ's 2007 revenues, and the downturn has already resulted in two

In poor times property advisers take comfort from so-called 'tenant rep' - being retained to advise large corporate clients on their real-estate strategies. With the advent of globalisation, such contracts have become lucrative worldwide mandates. So, in a downturn, plenty of work can be found helping corporate clients to manage their existing portfolios.

The trouble is, DTZ looks as though it is losing out to bigger competitors. For major corporate property investors, it is vital that their advisers can provide advice across the world, and can market properties internationally. This has resulted in two key trends: property services becoming a global industry in its own right, and increasing consolidation as companies spread their reach around the world.

In 2007, perhaps 50 small- to medium-sized practices worldwide were gobbled up by the giants of property services, CB Richard Ellis and Jones Lang LaSalle. The US has been the chief battleground for such deals. Richard Ellis spent $1.12bn (£56m) acquiring Trammell Crow in 2006. And, ominously, last month DTZ's eight-year-long deal-sharing alliance with US corporate advisory specialist Staubach was severed when Jones Lang LaSalle swooped to acquire the firm for $613m (£312m).

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