CBRE plans to combine its project management business with Turner & Townsend, the United Kingdom-founded global cost consultancy and project management services provider that it took a 60% stake in for $1.3 billion (£960 million) in 2021.

In a statement, CBRE said it will own 70% of the combined Turner & Townsend and CBRE's project management business, with the Turner & Townsend partners holding the remaining 30%. CBRE said that since it bought the first stake, Turner & Townsend has increased revenue at a compound rate of more than 20%.

The business provides cost consultancy, project management and advisory consulting services for clients from 118 offices in 50 countries operating across three segments: real estate, infrastructure and natural resources. The 75-year-old business has over 3,900 employees in the United Kingdom, working from 16 offices across England, Scotland and Northern Ireland.

CBRE, the world's largest brokerage, has been making major acquisitions in recent years as the Dallas-based company diversifies its service lines, particularly reducing its exposure to transactions-based businesses with the commercial real estate industry in some countries dealing with higher interest rates, elevated inflation and economic uncertainty. The company spent more than $2 billion in 2022 on mergers and acquisitions.

The project management business, including Turner & Townsend, produced net revenue of approximately $3 billion in 2023. Since 2021, combined net revenue has grown at a double-digit annual rate with an approximately 15% net profit margin, the firm said.

It expects net synergies from bringing the two businesses together to generate $0.15 of incremental run-rate core earnings per share by the end of 2027. The cost of its incremental investment in Turner & Townsend and CBRE project management is circa $70 million excluding deal costs, CBRE said.

In its most recently published annual report, CBRE said it is planning to add new capabilities to its firm through an active mergers and acquisitions pipeline this year.

"You should expect us to continue to build the business through M&A," Bob Sulentic, CBRE’s chairman and chief executive, told investors. "We aren't going to do deals that we don't think are smart either financially or they are too hard to integrate. We won't force M&A. We'll do M&A where we think we can grow our business the way we want to grow it in areas with secular tailwinds. It will likely be over the long term our No. 1 use of capital."

Sulentic said in a statement about the increased investment: "Unifying our project management business will create an offering that is unmatched for its scale and breadth of capabilities, with more than 20,000 employees serving clients in over 60 countries. Powerful secular trends, particularly increased spending on infrastructure, green energy, and employee experience, are growth catalysts for this business and we are well positioned to capitalise on this significant opportunity."

The combined business is set to be led by Vincent Clancy, Turner & Townsend’s chairman and chief executive, who will continue to report to a board controlled by CBRE and comprised of senior executives from both CBRE and Turner & Townsend.

Clancy said, "Our revenue and profit have grown significantly in the last three years."

CBRE plans to appoint Clancy to its board on completing the deal.

Beginning in 2025, CBRE intends to report project management results in a new segment separate from Global Workplace Solutions to provide increased transparency for investors, the broker said.