Alarm bells for property sector as DTZ is forced to make 50 redundant

By James Dow and Stewart McIntosh

THE dreaded word “redundancies” has arrived in the commercial property sector with the revelation that DTZ has told staff that up to 50 of them are to lose their jobs across the UK.

Early indications from other agencies are that they will not be cutting jobs in Scotland, although the impression is that fingers are crossed.

A number of agencies, as well as commercial property lawyers, have however already cut back at lower levels in the hierarchies.

The DTZ exercise has already been completed in Scotland. James Thomson, the company’s managing director north of the Border, said that five posts here out of a total of 190 had been affected. “It is disappointing, but it is what any prudent business would undertake when things get tougher,” he added.

With its high exposure to the residential sector, Knight Frank might be expected to be carefully considering its staffing requirements. However, Scottish chief Drew Oswald would say only that “we have no major plans for redundancies – anything that does happen would have happened anyway. But that doesn’t mean we can afford to be complacent; we’ve got to stay focused on the situation.”

In the commercial property sector, he says that non-transactional activities, such as valuations and consultancy, remain strong. “The real problem is the state of the investment market. The occupier market remains strong – but I’m a wee bit worried that the investment downturn will eventually trickle into the occupier sector.

“A lot of people are worried that there will be a shake-out in financial services, with a consequent impact on demand

for accommodation, but I’m glad to say that things are holding up well, so far. It’s worth reminding ourselves that in Scotland we don’t get the boom – but we don’t get the bust either.”

David Murdoch, an investment specialist with Drivers Jonas, is cautiously optimistic about the rest of this year. He said: “We’re doing OK. We’ve just had a presentation on our plans for the next 12 months and, like everyone else, we’re going to be very careful with the money. But we do see some areas for expansion this year; we do see some opportunities out there – although these are limited.”

Among other responses, Bob Fisher, of Colliers CRE, said: “The situation is in line with the national economy and there will be some job lay-offs in the agency business. I don’t think we are anticipating anything in Scotland but I suspect national firms will be looking at any surpluses.

"It is fair to say that in Scotland when some people moved on to new jobs last year we did not replace them.”

Chris MacFarlane, of King Sturge, commented: “I think most people have been looking at costs. In any business you have to cut your cloth accordingly – uncomfortable as it is, everyone has to look at costs. We have grown steadily rather than in big chunks, so we are OK.”

A spokesman for Atisreal, which has started a review of its UK business to streamline and re-organise poorer performing departments, said: “We have no plans for consultations or redundancies in Scotland and are looking to continue expanding our successful business in key areas.”

And an upbeat Jamie Thain of James Barr said: “We have just opened an office in Newcastle – we could not be further away from redundancies.”