Global property broker DTZ has pulled the plug on financial support for its subsidiary in Russia and the business is expected to close in the near future. DTZ said the closure of the Russian office was a direct result of the severe economic conditions in the Russian market and was part of DTZ's strategic review of its operations.
Global property broker DTZ has pulled the plug on financial support for its subsidiary in Russia and the business is expected to close in the near future. DTZ said the closure of the Russian office was a direct result of the severe economic conditions in the Russian market and was part of DTZ's strategic review of its operations.
Like its peers, DTZ is working to cut costs through redundancies and pruning operations in order to cope with the global economic crisis and the related downturn in real estate. The Russian real estate market is suffering from the lack of debt financing. Developers are struggling to get funding for projects and there have been very few major real estate transactions this year.
DTZ said the closure of the Russian subsidiary would not have a significant financial impact in the current financial year and is expected to enhance earnings thereafter.
The losses attributable to DTZ Russia in the year to April 2009 were £6 mln (EUR 6.5 mln). Its gross assets at end-April were £3 mln.
'DTZ believes that the ongoing needs of its clients in Russia will be best served through a franchise, and has therefore signed a franchise agreement for the Russian market with its existing franchise partner in Kazakhstan, TOO DTZ Kazakhstan,' the firm said.
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