CBRE Group ties up with Excellerate after Break-up with Broll
Global commercial real estate services firm CBRE Group (NYSE:CBRE), entered into partnership with Excellerate Property Services within a week after it ended its four-year alliance with Broll Property Group.
CBRE, last week announced that it had formed a joint venture with Excellerate to meet the growing demand for real estate services in Africa and the Middle East.
Meanwhile, Broll said it had ended its affiliate partnership with the US-based firm in order to pursue its transformation goals and become a black majority owned business.
Jonathan Broll, Chairman of the Board at Broll, said it was time the company made an effort to improve transformation in SA. He said the decision to end the relationship with CBRE was amicable.
“After a protracted period of negotiations to be acquired by CBRE, it became apparent that an agreement satisfying this condition would not be reached. I believe that events have therefore unfolded to the advantage of all parties,” said Broll.
The company entered into an affiliate agreement with CBRE in 2014 to service the US organisation’s clients in regions where it had no presence: SA, Nigeria, Ghana and the Indian Ocean islands. In terms of the contract, CBRE had the right of first refusal to acquire Broll and expressed an interest in doing so.
“During this time, we committed ourselves in earnest to transformation and began seeking a suitable BEE partner capable of carrying the business forward with the aim of finalizing a transaction by the end of 2018,” relays Malcolm Horne, Broll’s Group Chief Executive Officer.
“We have engaged with a suitable party and are now free to conclude a transaction which should see Broll as a proudly South African majority black-owned business with increased geographic reach and a substantial increase in size,” he said.
Both sets of negotiations ran concurrently but, by November 2018, Broll had decided to prioritise the BEE transaction to fast track its transformation to a black-owned business.
CBRE was to relinquish its right of first refusal by November 30 but chose not to do so.
“CBRE informed us at close of business on December 5 that it had decided not the relinquish these rights but rather to end the affiliation,” said Horne.
CBRE and Excellerate will merge CBRE’s facilities management operations in Africa and the Middle East with several of Excellerate’s businesses, including corporate real estate services, facilities management, valuation and project management services as well as property management services outside of South Africa.
Ian Entwisle, CEO Global Workplace Solutions, EMEA, said: “International corporations are increasingly looking for full service real estate solutions across Africa and the Middle East. Excellerate is the ideal partner to help us deliver these services.”
Gordon Hulley, CEO, Excellerate Holdings, said: “Our partnership with CBRE aligns with our core values and by structuring our relationship as a joint venture, rather than an alliance, we will pool our respective skills and expertise and foster intense collaboration, which will drive superior client outcomes.”
Marna van der Walt, CEO of Excellerate Property Services, agrees. “The joint venture partnership with CBRE will allow us to provide seamless coverage across the region and services that meet the highest global standards. It is a privilege to partner with an organisation of CBRE’s calibre, and we look forward to growing and strengthening our business.”
CBRE Group, which is based in Los Angeles, is the world’s largest commercial real estate services company.