ING has agreed to sell the majority of its ING Real Estate Investment Management business (ING REIM) in two separate transactions for a combined price of approximately USD 1 billion to CB Richard Ellis Group. Both ING REIM and CBRE are present on the Romanian market. ING REIM is present in Romania and owns the Felicia Shopping Center in Iasi (in picture). CBRE took over local real estate agency Eurisko in 2008.

The ING REIM operations will become part of CB Richard Ellis’ Global Investment Management segment (CBRE Investors).  ING expects the sale to bring it a gain of approximately EUR 500 million, after taxes.

In addition, as part of the overall transactions, ING has also agreed to sell up to approximately USD 100 million of its equity interest in existing ING REIM funds. In the transaction with CB Richard Ellis, ING Insurance has agreed to continue its asset management mandate with CB Richard Ellis as the new manager of the funds. ING Bank will continue to have an equity interest in some REIM funds in Europe, Asia, the US and Australia.

ING REIM Europe, ING REIM Asia and CRES, subjects of the transaction, have EUR 44.7 billion in combined assets under management as of end- 2010. ING Real Estate Development and ING Real Estate Finance are not impacted by the transactions and will continue to be part of ING Bank. The transaction is expected to close in the second half of 2011 and is subject to approvals by stakeholders and regulators.

CB Richard Ellis plans to finance the acquisitions with cash on hand and borrowings under its secured credit facility. CB Richard Ellis ended 2010 with more than USD 500 million of cash on its balance sheet, approximately USD 650 million undrawn on its revolving credit facility and a USD 800 million unutilized accordion facility, according to the company.

editor@romania-insider.com