Number crunching: Nabarro’s real estate
14 October 2013 | By Kate Beioley
27 March 2014
21 November 2013
1 April 2014
13 January 2014
30 September 2013
Real estate continues to be the key money spinner for Nabarro, which has always been known for its work in the UK property market, (although) last year results were up across the firm.
While Nabarro has yet to climb back to its 2004/05 and 2007/08 revenue highs – the highest profit per equity partner soared to £980,000 in 2007/08 – last year saw a considerable leap in revenue and profit after years of flat performance. Average profit per equity partner (PEP) soared by 30 per cent, from £332,000 to £430,000, and total turnover was up by 2.6 per cent, to £116.3m.
There is no doubt that real estate work had a role to play in that boost, accounting for 31 per cent of total turnover. As the real estate markets cranked back into action in the UK following a dampened 2011/12 the firm made off with good deals from investor, occupier and developer clients, while snaring more complex financial work.
On the firm’s high-profile client list was Google, which instructed Nabarro on its acquisition of a King’s Cross HQ in January. The firm won a competitive pitch for the purchase of the 750,000sq ft office space – soon to be a ‘groundscraper’ with a swimming pool and running track on the roof.
It also acted on several retail and residential deals with clients such as UK developer Hammerson buying a 25 per cent stake in a South London shopping centre for £65m and Hermes Fund Managers, which selected the firm for a panel place in 2007 on a £90m development in Bromley.
The mixture of deals on Nabarro’s books meant it turned over £36.1m in real estate revenue in 2012/13, a rise of £800,000 on the previous year – up 2.4 per cent. Property has accounted for a significant proportion of the firms’ revenue for years, sticking at 31 per cent of turnover for the past two after a 2009 dip to 28 per cent.
The firm has never quite made it back to the bumper numbers of 2007/08 when it turned over £45.62m in real estate – 32 per cent of a total £142.6m revenue. Average PEP also soared that year to £547,000, with a top bracket of £980,000. The following year saw a step in the opposite direction, with total turnover down to £126.5m and real estate also generating a lower proportion of total revenue – almost £10m less, at £35.4m.
However, in recent years, stability has been the name of the game. The firm has kept real estate turnover around the £35m mark, with the previous three years seeing only slight rises from £34.9m in 2010/11, £35.2m in 2011/12 and £36m in 2012/13.
Profits across the firm have also held steady, creeping up from £28m in 2010/11 to £31.6m in 2012/13.
Despite its small number of overseas offices, Nabarro’s client list boasts UK property developers as well as UK work generated from overseas investors, keeping it busy as the UK endures tough market conditions.
Nabarro and the City
Nabarro has taken a lead role in several deals around London’s ‘Silicon Roundabout’ technology cluster, and advised on headquarters deals in Central and East London.
Google led the tech-trek in the capital and Nabarro took the lead on its new headquarters acquisition. In January Google struck a deal with Kings Cross Central Limited Partnership, comprising developer Argent and landowners London & Continental Railways and DHL, gaining a 999-year lease.
The firm also advised AXA on its £230m office space deal at 20 Gresham St, and was instructed by Hammerson on the £176m sale of 60 Threadneedle St to St Martins Property Investments.
Nabarro deals in key property sectors, 2012
Office The firm advised German fund KanAm on the £500m sale of two City office properties – One Exchange Square and 90 High Holborn – to Malaysian Investment fund Permodalan Nasional Berhad in 2012.
Retail Acted on the disposal of 50 per cent of Sheffield’s Meadowhall shopping centre for London & Stamford – an asset value of £1.5bn. Also advised on the £280m sale of Festival Place in Basingstoke for Grosvenor Fund Management to US pension fund TIAA CREF.
Funds and Reits Nabarro acted on the first Reit retail bond issue by Primary Health Properties. The firm was also involved in closings for funds, including ones managed by AXA, Aviva, Cordea Savills, Mansford and Rockspring.