CBRE acquired a 20% stake in the company, then Ikoma Shoiji, in 1999, along with an option to acquire a majority stake. CBRE upped its stake in Ikoma to 22.8% in 2003. With this latest transaction, it now owns 51% of the company. In each of the transactions, the sellers were Ikoma senior executives, with the largest shareholder being company president Tatsumi Hanaya.
Ikoma has 800 employees in 20 offices, making it the largest nationwide player in Japan. Last year, it completed leasing and investment transactions valued at approximately $885 million and had about nine million sf under management. Rob Blain, the head of CBRE's Asia Pacific region, tells GlobeSt.com that from a property services and capital investment perspective, Japan is the emerging market alternative to New York and London.
"The majority of the property sector has been very much controlled by larger Japanese banks and asset management companies, going back to the non-performing loan days when the Loanstars and Goldmans [of the world] came in and took out tranches of non-conforming loans, of which a huge component are properties," Blain tells GlobeSt.com. "Those assets are now coming out [to market] and we have an abundance of in-bound capital; we believe the timing is perfect."
CBRE's cost to gain a majority stake in the company was not released by the parties involved and not otherwise immediately available. According to SEC filings, CBRE invested $2.52 million in the company the year it acquired its 20% interest. It has invested more and more in the company each year; as of the end of 2004, it had invested about $26 million in the company, according to SEC filings.
Japan, China and India are the three core geographic areas in CBRE's greater Asia strategy. Blain says the company's business in Japan will see "mammoth growth" in the next three to five years that will put it on par with the kind of business being generated out of New York City and London.
CBRE's UK revenue has more than tripled over the past few years, from $95.9 million in 2002 to $294.9 million in 2004, according to the company's 2004 annual report. In the US, revenues have about doubled during the same time period, from $849.5 million in 2002 to $1.61 billion in 2004. For the Asia-Pacific, revenues were $80.9 million in 2002 and $151 million in 2004.
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