CB Richard Ellis, the world’s largest property services firm, has completed its acquisition of the Asia business of Dutch real estate fund management business, ING Real Estate Investment Management Asia.
The transaction is the latest part of CBRE’s wider takeover of ING REIM’s European, Asian and US real estate securities business, in a deal valued at approximately $940 million. The three platforms are being merged with CBRE's own real estate investment management business, CBRE Investors.
So far it has already completed the purchase of ING REIM’s US real estate securities business. It will complete the purchase of ING REIM's European business this quarter, it said in a statement yesterday.
The sales come as Dutch bank ING, parent to ING REIM, looks to exit from the real estate investment management sector completely. ING REIM's US direct business ING Clarion was sold off separately to its own management in partnership with New York-based private equity firm Lightyear Capital. Meanwhile, its Australian fund management business has been exited fund by fund to various buyers.
Richard Price, ING REIM Asia’s chief executive officer, who will assume the same role at CBRE Investors, told PERE prior to the transaction that the integration of the two businesses in Asia would more straightforward than the other components of the transaction as there was little market overlap. While CBRE Investors has numerous funds in Europe and the US, its Asia exposure extended only to one fund, namely the $400 million Strategic Partners Asia II fund, a value-added vehicle with investments in China and Japan.
The addition of that fund to ING REIM’s current portfolio brings the platform’s assets under management to a valuation of approximately $5.5 billion spread across operations in Hong Kong, Shanghai, Seoul, Singapore, Taipei and Tokyo.
While no sales price for the Asia platform was offered CBRE said it had also bought $17.2 million of co-investments by ING REIM made to its Asia funds.
Price said following the transaction: “Our ability to originate sound, market-based ideas is now greatly enhanced, and this will be critical to our mission of achieving the best possible performance for our clients through market cycles.”
Matt Khourie, global president of CBRE Investors, said: “This acquisition is a milestone that significantly enhances our talent, resources and market insight in Asia. We now have the ability to offer investors an expanded array of investment programs across the risk-return spectrum in the dynamic markets throughout the region.”
CBRE’s acquisition of most of ING REIM was agreed in February after parent company ING Group determined last year to sell the business as part of a wider strategy to separate its banking and insurances arms. In October last year, the financial services giant said it would focus on its core banking operations following pressure from the European Commission over the €10 billion of state aid it received. ING REIM was placed in its investment management division – then part of the insurance business to be hived off.
After the transaction was agreed the ING REIM divisions have been sold to CBRE piece by piece starting with the sale of ING Real Estate Securities in July. The final sale of the European platform is expected to close this quarter, CBRE said. The sale of ING REIM Asia brings CBRE’s total assets under management to $63.6 million, a figure expected to grow to nearer the $100 million mark once ING REIM’s European business is concluded.