HFF’s UK plans revealed

US real estate services provider HFF further demonstrated its intentions to make inroads into the UK property advisory market this week by poaching two senior directors from CBRE. Jamie Pope, executive director and managing director of London investment business at “the green machine”, is joining as one of the co-heads of HFF’s new London office. John Starkie, a senior director in CBRE’s London capital markets team, is also making the leap. Both are on six months’ garden leave. HFF made its entry to the UK last week when it agreed a deal to buy Leon Partners, the firm established in July last year by former Bank of America Merrill Lynch duo David Church and Raj Somchand (see box). Pope and Starkie and the Leon Partners team were brought together separately by HFF, having been seen to have complementary skill sets. The firm’s strategy to eat up market share from its rivals will involve splitting the business into three areas: investment banking and corporate finance, to be led by Church; investment agency, to be led by Pope; and debt advisory, to be led by Michael Kavanau, head of HFF’s Chicago office, who is relocating to London. Its geographical focus will initially be on London and Church’s native Ireland but also UK regional markets. No push into Europe is expected. As the fourth-largest investment adviser in the US over the first half of the year, HFF will aim to bring over pension funds, public companies and private equity clients from the US. HFF is looking to create a hybrid of large advisory firms and boutique investment banks. This will draw comparisons with US rival Eastdil Secured, the property investment banking arm of Wells Fargo, which has had success building a business in Europe since it too crossed the pond in 2012. The company hopes to differentiate itself from some of its rivals by being independent and conflict free – HFF is listed on the New York Stock Exchange – as well as by avoiding “bundling” services when advising clients, which other large advisory firms and boutique banks have previously been accused of doing. It is also hoping to win business from banks that see property as an area of the market that is too small to justify retaining specialist staff.  HFF has been considering a move into the UK since 2007, approaching a number of niche businesses such as GM Real Estate over the years, but has only now been able to find a match. EG first revealed that it was close to setting up in the UK last month. Leon and HFF first met in April through a headhunter in London. The impetus from the HFF side was led by Kavanau and senior managing director Riaz Cassum and a deal was agreed following extensive due diligence on both sides. The takeover is due to complete in around two months following regulatory approvals.  Although HFF is a listed company, it labels itself as a partnership and has a flat structure. It encourages a “player/coach” model, in which bosses are expected to be involved in deals. There is no fixed number that the company is looking to grow to from its current staff of 10 but it is understood to be looking to leave Leon’s current Queen Anne Street location in Marylebone, W1, and move to a nearby office of around 4,000 sq ft. Leon Partners’ 2016 Deals Client: Lone Star/Quintain Sold Grafton Advisors, the adviser to the West End of London Property Unit Trust, to GreenOak Real Estate. Client: British Land Sold a £191m portfolio of three retail assets in the north of England to BMO Real Estate Partners. Client: Tetrach Capital/PIMCO Sold six-asset €140m (£125m) Ulysses and Millennium Park Irish office portfolio to ESB. • To send feedback, email david.hatcher@estatesgazette.com or shekha.vyas@estatesgazette.com and tweet @hatcherdavid @ShekhaV or @estatesgazette