New Delhi: Global property consultant Jones Lang LaSalle and domestic player Trammell Crow Meghraj decided on 12 June to merge their operations in India and said the new entity targets a revenue of $100 million by 2009.
The merged entity, Jones Lang LaSalle Meghraj, will have about 2,800 employees in India, with offices in 10 cities and 44 million sq ft under management across India.
The merger would enable Jones Lang LaSalle, an integrated global real estate services firm and money management firm with 160 offices in 50 countries, to increase its scale in India, while TCM would gain global clients.
“It’s a merger of equals. We both are bringing equal amount of business and margin in the combined entity,” Jones Lang LaSalle Meghraj chairman and country head Anuj Puri told reporters here.
Puri said both JLL and TCM would bring equity in the new company, but declined to divulge any financial details.
He also claimed a 35% market share in India, which is estimated at Rs1,200-1,500 crore ($300-375 million), for the merged entity, contributed equally by both JLL and TCM.
The new entity could have an edge over rival real estate consultancy firms such as CB Richard Ellis, Cushman and Wakefield and DTZ.
The combined turnover of both the companies in 2006 was about $45 million, he said, adding that the revenue was projected at $70 million in the 2007 fiscal.
“Jones Lang LaSalle Meghraj has aggressive growth plan. By 2009, we expect to exceed $100 million in revenue and aim to establish offices in five more cities,” JLLM’s new CEO Vincent Lottefier said.
The new entity would introduce additional services including a full service hotel division, corporate capital markets, debt and derivatives, asset management and specialist mall management, Lottefier said.
Lottefier said the headcounts of the new company would be increased by 25-35% by 2009 from the present 2,800.
Puri said TCM had the right to buy back 30% stake from Trammell Crow Company (TCC), which it has exercised. TCC was last year acquired by US-based CB Richard Ellis, the world’s largest commercial real estate services firm with over 24,000 employees and more than 300 offices.
Commenting on the Indian property sector, he said the country’s property sector was likely to receive foreign direct investment amounting to $10-12 billion in 2007.
The private equity route would be the source of funding in the current year, he said, adding that alternative investment market (AIM) was the preferred place to raise money last year.
The private equity investment could be at an entity level or in project development, Puri said.
On the property prices, Lottefier said overall the market would remain stable, corrections could take place at micro level but not at macro level.