Cultural factors made CBRE preferred buyer: White

CB Richard Ellis was the buyer of choice for ING REIM's management team for a number of reasons, making the US brokerage group the clear winner in the takeover of the fund manager's European and Asian operations, CEO Brett White of CBRE Group said in a conference call to analysts on Tuesday.

'When they looked at the available buyers that they could end up with, they believed that based on our culture, based on our platform, based upon the way we compensate people, CB Richard Ellis would be their preferred home,' Brett said. His comments followed the announcement earlier on Tuesday that CB Richard Ellis Group, acting for its investment arm CBRE Investors, is acquiring the bulk of the real estate investment management business of Netherlands-based ING Group for $940 mln (EUR 696 mln) in cash.

In total, CBRE Investors is taking control of approximately $59.8 bn of assets under management (AUM), including $29.5 bn in Europe, creating a giant with nearly $100 bn of AUM. CBRE Investors currently has AUM of $37.6 bn. The merged company will become the world's biggest real estate investment manager, ahead of AXA REIM. Pieter Hendrikse, CEO of ING REIM Europe, will be the new European CEO of the mammoth combine, whose European headquarters will be based in The Hague where ING REIM is currently located.

It also emerged from the conference call that ING will continue to maintain close ties with CBRE Investors following the deal. The two parties have agreed that CBRE will manage ING Group's real estate investments on an exclusive basis for the next 10 years. This agreement will apply both to existing and future investments.

According to Jim Groch, chief investment officer of CB Richard Ellis Group, ING's insurance arm holds an interest of around 12% in the $59.8 bn in property assets managed by ING REIM for third parties, making it a key client for the new combine. ‘We have a 10-year exclusive agreement on all of their existing real estate assets under management, and we also have an exclusive on new allocations to real estate during that period of time,' Groch said.