CB Richard Ellis (CBRE) Group has reached an agreement to acquire the majority of the property investment management business of Netherlands-based financial company ING Group NV for US$940 million, making it the largest property investment manager in the world.
The deal, which almost triples CBRE’s assets under management, puts an end to an auction process that lasted more than a year and drew over 40 interested parties, including Jones Lang LaSalle (JLL), CBRE’s main rival.
By providing CBRE a larger investment management base, the transaction also gives the firm a better chance to sell its property services — property management, corporate services, sales and leasing — to the newly acquired business. “It completes the construction of a preeminent global investment management platform,” said Brett White, CEO of CBRE, in an interview with Reuters.
“We now have opportunities for investors to invest in virtually the entire risk spectrum and the entire global geography. No one’s ever done that before.”
For ING, the transaction will help it pay a portion of the balance left from its US$10 billion government bailout in 2008.
CBRE Investors, the CBRE arm which will be taking over the ING business, is a wholly owned but independently operated unit that manages individual accounts and funds that invest in property.
Its clients are mainly institutional investors based in the US, including pension funds and endowments. The deal will give CBRE Investors access to ING’s predominately European clients.
CBRE will also acquire Clarion Real Estate Securities (CRES), the US-based global property listed securities business of ING.
It will also acquire some US$55 million of CRES co-investments from ING and potentially interests in other funds managed by ING REIM Asia and ING REIM Europe.