The history of real estate consulting in Brazil: The British contribution to the real estate sector

Perhaps many do not know, but, before the American global influence, there was the British global influence, which, in addition to acting in the areas of subdivision (Companhia City, for example), railroads, engineering, finance and football, also stood out in the area of real estate consulting. The effects of this are still reflected today in how companies such as Ocupantes provide real estate consulting services.

Half a century ago, two major British companies were globally prominent: Richard Ellis, with origins dating back to 1773, and Jones Lang Wootton, founded in 1783. Quite old, right? One was always followed by the other. Our partner and CEO, Bruce Lorimer, began his career at Richard Ellis, now CBRE, and I worked at Jones Lang Wootton, now JLL. 

The global presence of these companies aimed to serve corporate clients in a standardized manner in countries that had not yet reached the same standards as the United Kingdom.

They established a strong presence in locations such as Australia, Japan, Hong Kong (and later China), the Middle East, several Asian countries, and also in Europe. Soon, they also became consultants for investors and developers in these countries. 

It is worth noting the “consulting” approach of these companies, which sought to differentiate themselves from traditional real estate brokers by offering a more in-depth and participatory approach in guiding clients.

To achieve this, they recruited professionals with university backgrounds in engineering, appraisal, property management, finance, and administration.

Britain was one of the first countries to offer university courses in “Real Estate Management,” and the excellence standards introduced by them are internationally recognized.

For example, the “International Valuation Standards,” to which Brazil is a signatory, was primarily based on the real estate valuation standards established in the essential and fundamental appraisal manual “Red Book” by the RICS (Royal Institution of Chartered Surveyors), of which I am a member.

I had the privilege of being one of the volunteer translators of the Red Book into Portuguese and founding the Brazilian chapter of RICS. The University College of Estate Management, where I graduated, was founded in 1919 by RICS itself.

However, in the United States, the British failed to establish a dominant presence. With the growth of the American economy, American real estate firms became powerful but focused on the immense domestic market.

Only in the 1990s did the British and Americans realize that the combination of one’s economic power with the other’s international presence would bring mutual advantages, and so the mergers began.

Anticipating this movement and seeking a better bargaining position against the Americans, some British companies expanded within the UK and the rest of the world, adding services such as Facility Management and engaging in mergers and acquisitions.

For example, in 1993, the company Debenham Tewson & Chinnocks acquired Bernard Thorpe (where I worked in condominium administration and appraisals when I was younger) and also made agreements with the French Jean Thouard and the German Zadelhoff, resulting in the acronym DTZ – Debenham Thouard Zadelhoff.

For a few years, DTZ became the largest global real estate services company, including the strong Asian company CY Leung. However, it faced financial problems, and after being acquired by the Australian UGL, which already had a presence in the US (and adopted the better-known DTZ brand), DTZ only completed a major merger in 2015 with Cushman & Wakefield, another well-known name in Brazil, and the DTZ brand was dropped. C&W had already taken its own expansion steps in the 1990s with the acquisition of the British firm Healey & Baker.

The current CBRE was formed in 1997 when the powerful American real estate company CB Commercial acquired the international arm of Richard Ellis. The British arm came later, after passing through ownership by an investment group.

Witnessing the history of real estate consulting in Brazil

And in Brazil?

Richard Ellis arrived in Brazil in 1979 under the leadership of Anthony McVeigh, a member of RICS.  But, before him, came Brian Busson, who is mentioned in the Financial Times in 1976 for his work at the helm of Mackenzie Hill in Brazil.

Mackenzie Hill was a British developer that launched, in particular, two office buildings in Rio de Janeiro (Flamengo and Botafogo) and the renowned building on Eusébio Matoso Bridge, where Itaú Unibanco is located, the first truly “corporate” building outside downtown São Paulo due to its large floor size.

After the death of owner Charles Mackenzie Hill, Brian Busson acquired the brand in Brazil, focused on consulting services, and their signs were seen in many office buildings.  

Anthony McVeigh introduced the concept of “Net Internal Area” and “Usable Area” [Read article: What is the difference between BOMA Area and Private Area? What impact can it have on the rental price?] in Brazil, which measured, in a clearer way, the actual usable space for a tenant. Interestingly, CBRE itself recently introduced the American concept of BOMA area.

Richard Ellis, in conjunction with the American developer Trammel Crow, propelled the development of Chácara Santo Antônio in São Paulo, with what was called “SPOP – São Paulo Office Park,” a name that has been lost over time. Buildings currently occupied by Accenture (“SPOP-IX”), Profarma (“SPOP-X”), and Teleperformance (“SPOP-II”) were part of this small boom that brought companies to the southern zone of São Paulo, preceding the development of the Berrini area. Richard Ellis was also responsible for putting the first buildings by Rafael Birmann on the map.

Skills that stand out

Another RICS member who came to Brazil in the 1980s was Raymond Smith, in my opinion, the most complete appraiser and real estate professional in Brazil. I’m biased because he was my mentor.

He has expertise in various types of properties, from gas stations to shopping centers, resorts, and farms. This broad skillset is the result of the requirements for RICS membership, which include two years of supervised experience in various real estate areas (after accredited university education), with at least six months in the appraisal field. The idea is that those who do not understand where value of properties arises from will not understand the real estate market.

These British professionals introduced concepts and standards that did not exist in the real estate market in São Paulo and Brazil, an influence that lasts until today. The legacy left by our mentors is reflected in the more in-depth and consultative approach adopted even by Ocupantes.

---