October 5, 2011
By Barbra Murray, Contributing Editor
CBRE Group Inc., formerly CB Richard Ellis Group Inc., has taken a big step toward the completion of its $940 million acquisition of substantially all of ING Group N.V.’s securities and management businesses. The commercial real estate firm — already the largest in the world in terms of 2010 revenue — just closed the purchase of ING Group’s real estate investment management operations in Asia, or ING REIM Asia. The procurement of ING REIM Asia marks the second stage of the nearly $1 billion transaction. Two down, one to go.
CBRE Group is in the process of incorporating ING REIM Asia into its existing Global Investment Management division in the region, which functions through company subsidiary CBRE Investors. The new entity’s operations span such leading global metropolitan destinations as Hong Kong, Shanghai, Seoul, Singapore, Taipei and Tokyo.
“This acquisition is a milestone that significantly enhances our talent, resources and market insight in Asia,” Matt Khourie, global president with CBRE Group and head of the firm’s Global Investment Management business, said. “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.”
During the first six months of 2011, CBRE Group’s revenue from its Global Investment Management business, which consists of operations in the U.S., Europe and Asia, totaled nearly $107.9 million, marking a substantial increase from the $86.3 million in revenue during the first six months of 2010.
ING Group’s European real estate investment management operations, ING REIM Europe, will be brought into the fold before the end of the year; CBRE Group anticipates a closing during the third quarter. When all is said and done, the firm will have relied on $400 million of new term loans and cash on hand to finance the REIM Asia and REIM Europe purchases. CBRE Group had raised $800 million of bank debt for the three-phase ING transaction, and spent the other $400 million to finance the first phase of the three-part deal, the acquisition of ING Clarion Real Estate Securities, which closed at the end of the second quarter.