In its annual membership survey of some of Europe’s top industrial & office agents, the Society of Industrial & Office Realtors (SIOR) has revealed widespread concerns over fee erosion across the European market.
While the majority (68%) of respondents predicted that their business revenues in 2020 would increase on 2019, they also revealed coming under increased pressure to reduce fees. When asked about the most immediate threats to their business, over a third of members stated fee erosion ahead of other issues such as global economic slow-down, AI or Brexit.
Paul McDowell, president of SIOR Europe, said: “While macro-economic factors tend to dominate the headlines, it is clear that the main issue concerning our members is much closer to home. For the most part, the biggest challenge facing our profession, particularly in Europe, is educating clients that premium advice cannot be delivered against a backdrop of dwindling fee levels.
With respondents to our survey ranging from sole practitioners to the leaders of large international consultancies, it was interesting to see this level of consensus on a single issue”.
Perhaps unsurprisingly, the most positive sentiments come from those operating in the industrial sector, citing the continued growth of e-commerce through Continental Europe as a key driver for their market.
Members based in France were most bullish about their domestic market, citing positive economic factors as a reason for more growth and deal-flow in 2020. While UK respondents were largely positive about achieving some clarity at last on Brexit, however, concerns still loom over its eventual impact.
Members in Germany were most cautious about their domestic market, with their manufacturing-led economy one of the most vulnerable to the dual threats of Brexit and a potential escalation of the trade war between the US and China.
All members expected to see increased levels of cross-border transactions among their SIOR network, with average deal volumes per member currently averaging at 4.85 per annum.