LONDON-The executives in charge of Jones Lang LaSalle’s takeover of the locally-based King Sturge, which took effect Wednesday, say that the union was the combination that both firms needed to compete on the new global stage. Chicago-based JLL paid $159 million to initially close the deal, and will pay another $160 million during the next five years to rename and reposition 43 offices and business in Europe, mostly in the UK.

Former King Sturge partner Richard Batten, now UK executive chairman for the merged company, and local JLL CEO Andrew Gould talked with GlobeSt.com’s Robert Carr Thursday about the year-long effort at consolidation. The joining now makes the company the largest commercial real estate services provider in the UK over rival CB Richard Ellis, both men say, but the outlook was wider than that.

“From our perspective, we were a European firm looking to find a global platform to take advantage of the financing that’s become available, especially in the Far East, as well as corporate occupier access, which is for the UK almost completely driven by the US firms. JLL had both of these,” Batten says.

Gould says moving further into European markets has been a target of JLL, especially in the UK. “Europe presents different markets,” he says. “Germany is very strong right now, at about 3% GDP growth, and Central and Eastern Europe are also strong. There’s been some stress along southern Europe, and even in the UK, you’ve got the strongest program of public spending cuts now having an impact on consumer spending. But in the past 18 months the UK has been the number one target of global real estate capital, creating many new opportunities that this type of joined firm can capitalize on.”

Even market analysts approved of the move. Ross Smotrich and Michael Lewis with Barclays Capital said in a report that the deal will be a “long-term positive” and makes sense in a strategic sense. “(The merger) enhances JLL’s presence in London, other parts of the UK, and Central and Eastern Europe. It also helps balance the company’s business line weightings a bit, as King Sturge has a large capital markets business, while JLL is weighted heavily toward leasing,” they said in a joint report Wednesday. King Sturge brings annual revenue of roughly $259 million, with an operating margin north of 10%, the two men said.

The merger brings another change for King Sturge, which now bows out of a 17-year cooperating relationship with commercial real estate organization CORFAC International. Batten says there wasn’t a major breakup in the relationship with CORFAC, emphasizing that both sides “will remain friends.” “I think that if you’re going to make the corporate piece work than you need common ownership to drive the client base through the global environment,” he says. “The CORFAC association has worked tremendously well for us, but we came to realize, and they did doo, that there is a need to have more common ownership of client base to make it work for the benefit of all.”

 Chicago-based Steve Podolsky, managing principal of Podolsky Northstar – CORFAC International and one of the founders of the organization, agreed that the friendships will remain. “Despite the departure of a 17-year ally, many of us believe that there is significant upside to new opportunities that will emerge from this change, foremost among them the ability for CORFAC to globally align with independent entrepreneurial firms and brokers that are more like CORFAC, and with a clearer focus on owner/occupier work, tenant and landlord representation, and corporate services work,” Podolsky said in a statement.

On Thursday, CORFAC International President Charles Sevier announced that the group has launched three initiatives to expand its global reach. The organization hired a new executive director, Susan Newman, has taken steps to join the Paris-based International Real Estate Federation and has formed an International Affiliation Task Force to identify and recruit prospective affiliates in key international markets.

Both Gould and Batten say that the breakout of the recession will likely bring similar consolidations. On Wednesday, Kennedy Wilson announced plans to take over the property management division of the Bank of Ireland, and there’s rumors that Saint Georges Participation could make an offer for London-based DTZ plc. CresaPartners recently joined forces with Savills to create a mutually-exclusive global network.

“Commercial real estate is now an incredibly fragmented industry, much like the accountancy and legal professions, and I suspect there will be continued consolidation as the industry drives toward global services going forward,” Batten says.