Deloitte to divest transactional property teams by 31 May after conflicts with audit operation
CONFLICTS between Deloitte’s real estate arm and its auditing division has seen the Big Four firm divest the transactional side of its property offering after a review lasting more than four months.
It’s understood the US Securities and Exchange Commission governing the independence of auditors had stymied potential business for the real estate team, while it also fell foul of caps on fees to auditors for non-audit services.
Property agents Knight Frank, Gerald Eve and Savills have all acquired portions of the team which was set up in 2010.
The 48-strong asset and property management team has been transferred to Knight Frank. The West End and City leasing teams, the lease advisory team, and the dilapidations team were snapped up by Gerald Eve in a move involving 20 staff, while the City investment team of four, along with partner Jamie Olley, are to go to Savills. The transfers are expected to conclude by 31 May.
The firm added it is “still exploring” options its national investment team and its lead partner John Rogers and will announce the outcome in due course.
The remaining professional portion of Deloitte Real Estate will continue to bring in around £130m a year in revenue.
Nigel Shilton, managing partner for Deloitte Real Estate, who will remain with the company, said: “Deloitte Real Estate has gone from strength to strength over the past few years with resounding successes. However, the strategic review has suggested that it is no longer in the best interests of our clients or people for us to retain these parts of our real estate business. Our priority now is to ensure a smooth transfer process for the teams and their clients.
“Our Deloitte Real Estate business will continue to be a strong player in the market through our core real estate services in tax, audit, consulting, financial advisory, construction, planning & development and occupier advisory and these services will now be the primary focus for our future investment and growth.”