City & Corporate: Agencies vie for real estate briefs

Two lucrative real estate accounts are up for grabs, despite the commercial property market slump.

One of the world's largest commercial property investors, GE Real Estate, has put its pan-European financial PR account out to pitch. At the same time, the government-owned property developer of Dubai's man-made palm islands is searching for PR support.

GE Real Estate's multi- national account is thought to be worth a significant six- figure sum. The company has $87bn invested globally and has a portfolio of EUR9.6bn of European assets.

FD is the incumbent agency and is repitching on a short-list that is also understood to include Cubitt Consulting, whose partner Cubitt Jacobs & Prosek has a relationship with parts of the General Electric business in the US. Pitches were due to take place as PRWeek went to press.

GE Real Estate recorded a 28 per cent compound annual growth rate since 1993, but is unlikely to have faced a hostile market environment before.

On Monday, the Royal Institution of Chartered Surveyors predicted that the UK commercial property market will fall at least 16 per cent in capital values in 2009 and another 10 per cent in 2010.

Tony Langham, CEO of Lansons Communications, noted that property investment firms are forced to regularly revalue their portfolio, meaning the falling market is causing balance sheet losses at a time borrowing is becoming increasingly constrained.

He said: 'Much of the sector comms work is trying to minimise the amount of bad news getting into the public domain, while communicating with shareholders as openly and honestly as possible.'

But it is not just Europe and the US that are suffering - the booming property market of the Middle East that has attracted so many finance and comms outfits is also finding itself on shaky foundations. Speculation is rife that the Dubai property bubble has burst, with investment firm EFG-Hermes predicting values to fall 15 to 20 per cent in 2009.

Fighting against this backdrop, Nakheel, the government-owned property developer of Dubai's man-made palm islands, is planning a multi-billion dollar IPO and is searching for PR support.

City stalwarts such as Citigate Dewe Rogerson, Brunswick, FD, Tulchan and Capital MS&L are thought to be on the pitch list for the $15bn transaction. However, one senior agency source remained unconvinced that the IPO would come to speedy fruition because of current fractious market conditions.

HOW I SEE IT - IAN PURVIS, Chief executive, Porterfield PR

The turmoil that affected the commercial property investment market started in the summer of 2007. Now the rest of the economy has caught up it is having an impact on occupation levels and not just valuations. The bulk of PR has traditionally been geared up to keep investors abreast of new vehicles and products, but comms has changed and it is now far more defensive.

The sector should not just see PR as a way of publicising good news because managing media relations and speaking with stakeholders remains vital in a tough market. It is essential that if rumours spread they can be quashed.

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