CBRE Buys Majority Interest in Tokyo Firm, Creating $100M Enterprise

CB Richard Ellis Inc. will be Japan's biggest international brokerage firm after combining its Tokyo operations with affiliate IKOMA CB Richard Ellis K.K., the company announced today. After almost seven years of minority ownership in IKOMA, CB Richard Ellis will increase its holdings to 51 percent and create a $100 million enterprise in the rapidly improving Japanese marketplace, CB Richard Ellis' Asia-Pacific operations president Robert Blain told CPN this afternoon.

Based in Hong Kong, Blain (pictured) explained that CB Richard Ellis' current office in Tokyo focuses on international business. But with IKOMA's 20 offices in Japan and nearly 800 employees, CB Richard Ellis' Japanese entity will be able to bring a tremendous amount of international capital into the entire Northern Hemisphere operations, he said. IKOMA will also take on the CB Richard Ellis brand name.

"Tokyo is a very highly rated market (at) the moment. One thing it's not lacking in the global market is capital," he explained. "What it's lacking is obtaining investment stock. With the new entity and business structure?we are in a very strong position to service that inbound capital from a global perspective."

Nearly every U.S.-based brokerage firm is expanding internationally, and China and India in particular have been the industry's golden eggs. After Japan's notorious banking and real estate crashes, some industry hesitation to reenter the market there could exist.

But Blain noted that Japan's gross domestic product is still twice that of China's, and privatization, improving economics and the country's deep wealth make it ideal for international investment. "Things are changing, things that five to 10 years ago would never (have been expected) to change," he said, referring to economic trends as well as to nonperforming assets that were snatched up by overseas investors after the crash. Since then, these properties have been remodeled, refurbished and repositioned.

"We've been working on the Japan strategy for one and a half to two years. It blends into the whole greater Asia strategy," Blain said. "We're sort of joining the jigsaw for the geographic region of three billion people."