U.K., Asian Real Estate Markets Are Recovering, DTZ Chief Says

July 21 (Bloomberg) -- The British and some Asian commercial real estate markets are starting to revive, according to Paul Idzik, chief executive officer of London-based property broker DTZ Holdings Plc.

Property in continental Europe will take longer to bounce back because markets lag behind the U.K. and prices are still falling, Idzik, 48, who took over as head of the company in November, said in an interview today.

“We are seeing all the stimulus that has been put into parts of the Asian market bearing fruit,” Idzik said after DTZ reported a wider annual loss. “Selected parts of the U.K. are starting to show signs of life.”

Commercial real estate markets have been hit by the global financial crisis, forcing some property companies to raise cash from shareholders and others to cede ownership of offices and stores to their bankers to cover loans they can’t repay.

DTZ, whose revenue slumped 18 percent to 364 million pounds ($597 million) in the year to April 30, is counting on lenders selling those property holdings and spurring the market. DTZ has offices in 162 cities in 45 countries around the world.

“We are hopeful that we will start to see U.K. and continental banks start to take action on many of their loans related to commercial property,” said Idzik. “We haven’t seen much working out taking place at all.”

Seeking Buyers

Lenders including Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc have been saddled with losses on billions of pounds of real estate loans. They have been affected by the slump in commercial property values, which have fallen 44 percent in the U.K. since peaking in June 2007.

“Even if they start taking these things out at lower prices the issue for the market is the lack of willingness on the buy side,” said Idzik.

DTZ’s loss for the fiscal year ended April 30 widened to 87.3 million pounds, or 82.75 pence a share, from 4.26 million pounds, or 7.65 pence, a year earlier, the company said in a statement earlier today.

One-time charges accounted for 44.6 million pounds of the loss, including the cost of reducing its workforce and a loss on the sale of its 50 percent stake in a U.S. business. The broker cut 1,500 jobs, or 21 percent of its directly employed staff, during the year.

In addition to previously announced annualized cost savings of 30 million pounds, DTZ said it had identified 20 million pounds of cuts that it will make this year.

SAS Saint George Participation, the French investor that bought a majority stake in DTZ in January, has provided 15 million pounds of credit since the fiscal year ended, allowing DTZ to renegotiate banking agreements, the broker said.

DTZ shares were unchanged at 43.75 pence at 12:28 p.m. in London trading, giving the company a market value of 116 million pounds. The shares have surged 62 percent this year.