Purchaser of HOK plans to expand in Republic

The British property group that has taken over auctioneer Hamilton Osborne King (HOK) for €50 million says it will look for opportunities to buy other Irish businesses in the future.

Jeremy Helsby, chairman and chief executive of Savills, said his group intended to increase its slice of the Irish market.

"We're sitting on a lot of capital in the UK and we have the firepower," he said. "We will be looking to expand, either through acquisition, if it's the right thing to do, or organically. But we intend to get this ) bedded down first."

The deal means that HOK's 20 directors, who own the company, and senior managers, will share the bulk of the €50 million. But chairman, Aidan O'Hogan, said yesterday that all staff would get a substantial bonus from the sale proceeds.

HOK's 20 directors have varying shareholdings of different classes of shares held through different holding companies. The biggest beneficiaries of the deal are likely to be Mr O'Hogan, managing director Paul McNeive and director Graham Slater.

According to 2004 filings with the Companies' Registration Office (CRO), Mr McNeive held around 10 per cent of the company, while Mr O'Hogan and Mr Slater held in the region of 8 per cent.

However, it was not possible to establish yesterday if these stakes had increased or decreased since then.

In the 12 months to the end of September 2005, HOK had a turnover of €35.7 million and made pre-tax profits of €7.8 million, before a once-off charge of €4.7 million, which it attributed to "non-recurring remuneration". On September 30th it had assets of €22.1 million.

Mr McNeive said yesterday that the firm had more than doubled fee income, its main revenue source, in the three years to the end of September 2005.

Savills has 125 offices in 22 countries and a foothold in North America through a partnership with TrammellCrow.

Over the last five years it has increased its turnover to £373.9 million sterling (€547 million) from £235.4 million.

Pre-tax profits have grown to £58.6 million from £21.6 million.

Mr Selsby said yesterday that one of the main attractions of HOK for Savills was that it would allow the group to get a portion of the capital that's flowing out of the Republic and into property in Britain and the rest of Europe.

"Over the last five years, Irish people have invested €15 billion in property in the UK and the rest of Europe, and €11 billion of that was in the UK," he said.

"Last year, the Irish were the biggest foreign investors in property in all European countries."

He also made it clear that Savills did not believe that the Irish market itself had peaked. He argued that the economic fundamentals and demographics indicated that it would keep growing.

Mr O'Hogan said that Savills would open up further opportunities for HOK outside the Republic.

The auctioneer is already working with developers operating in Britain, including Ballymore Properties, or seeking to enter that market.

HOK already has a property portfolio in Britain with a rent roll of €14 million. It is also active in North America. In the Republic it manages a portfolio worth over €4 billion, which delivers an annual rent roll of more than €85 million.

The takeover will not result in any job losses or management changes at HOK and the company will maintain its brand for the time being.

Management believes the deal could result in the need to hire more staff rather than letting anyone go.