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JLL lands CBRE investment banking team

Posted on 18 Mar 2010 | Comments Off

Team arranged US$20b of debt and equity transactions in last 10 years

Jones Lang LaSalle Inc (JLL), the second-biggest publicly traded commercial property broker, has hired an investment banking team from larger rival CB Richard Ellis Group Inc (CBRE), as it prepares for US real estate sales to rebound.

Thomas J Melody, 48; Michael J Melody, 47; and Thomas O Fish, 47, started their new jobs this week, Chicago-based Jones Lang said in a statement. The Melody brothers worked at Houston- based LJ Melody & Co when it was sold to CB Richard Ellis in 1996 and went to work for the acquiring company. Mr Fish joined them later that year.

The men, who Jones Lang said arranged US$20 billion of debt and equity transactions in the last 10 years, will lead their new employer’s US real estate investment banking unit. The division handles commercial property sales and arranges financing for transactions. In 2009, it generated about a third as much revenue as a similar unit at CB Richard Ellis.

‘Our desire is to be a market-leading business,’ Jay Koster, president of Jones Lang’s Americas capital markets group, said in an interview before the announcement. ‘That means taking on all of our competitors in that space.’

The new hires will be based in Houston, Jones Lang said.

‘Mike and Tom Melody and Tom Fish are fine producers,’ said Robert McGrath, a spokesman for Los Angeles-based CB Richard Ellis. ‘We wish them the best.’

The decision to leave was ‘very tough’, Mr Fish said in a telephone interview. ‘CBRE’s debt and equity-finance platform is an established one,’ he said. ‘Tom, Mike and I wanted to be in a position of helping to grow a platform.’

Jones Lang LaSalle generated US$203 million in revenue last year from selling real estate and arranging financing for transactions, the smallest share from any of its units, according to a February company presentation.

About US$38 million came from the US, where commercial property values have fallen 41 per cent since peaking in October 2007.

‘Our capital markets business is not a contributor at this point in time,’ Jones Lang’s CFO Lauralee Martin said of the division in a Feb 3 conference call.

CB Richard Ellis reported US$569.8 million in revenue from global capital markets in 2009, according to a February investor presentation.

The number combines revenue from property sales and the commercial mortgage brokerage businesses, Mr McGrath said.

Jones Lang’s new hires have known each other for 30 years. They grew up in Houston, attended college together at the University of Texas at Austin and each belonged to the Kappa Alpha fraternity, said Paige Steers, a Jones Lang spokeswoman.

Shares of Jones Lang LaSalle have fallen 44 per cent from their July 2007 peak to close at US$68.82 in New York Stock Exchange composite trading on Tuesday. CB Richard Ellis slid 65 per cent from its July 2007 peak, closing on Tuesday at US$14.42.

Source : Business Times – 18 Mar 2010

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Sales of private homes up 130%

Posted on 18 Mar 2010 | Comments Off

Singaporeans are the main drivers of surge last year

The 91-unit Newton One condo. Singaporeans accounted for 76 per cent of private property purchases last year. –ST PHOTO: CHESSA LIM

DOWNTURN? What downturn?

Private home transactions – for both new and resale homes – jumped by more than 130 per cent last year, despite the downturn. Singaporeans were the main drivers of the surge: There was an overall rise of 144 per cent in private property transactions by them last year – 23,516 compared with 9,649 in 2008.

In the non-landed segment, Singaporean purchases rose almost 159 per cent. The rise in landed property purchases was nearly 83 per cent.

But comparatively lower prices here as a result of the credit crunch, the influx of expatriates and the attractiveness of Singapore property also led to more purchases by foreigners.

The number of purchases by foreigners, including permanent residents (PRs), rose 114 per cent overall last year – 6,798 compared to 3,176 in 2008. The bulk of the increase was in the non-landed segment, which rose from 3,036 purchases in 2008 to 6,610 last year – a jump of 118 per cent.

Landed properties showed a year-on-year rise of 34 per cent.

In terms of overall private property transactions, Singaporeans accounted for 76 per cent of all purchases. Foreigners and PRs made up about 22 per cent, with the rest going to companies and others, according to figures from the Urban Redevelopment Authority and DTZ Research.

Checks by The Straits Times showed that among the foreigners, Malaysians, Indonesians, and Chinese and Indian nationals were the most active in the property market. In particular, the proportion of Chinese and Indian nationals has shown a steep hike.

In 1999, they made up 6.6 per cent of total transactions by foreigners and PRs. That proportion grew to 27.3 per cent last year.

Experts said the rising number of purchases by foreigners could also be due to home prices here being more attractive than in cities like Hong Kong and Tokyo.

Ms Christine Sun, senior manager of research and consultancy at Savills Singapore, said: ‘The opening of the integrated resort and the strength, resilience and stability of Singapore’s economy during the recent downturn could also be plus points.’

She added that the boom came despite a poor economy. ‘The market sentiment in the earlier part of 2009 was rather bullish. Many locals were buying due to pent-up demand, and PRs and foreigners could have ridden on the positive market sentiment and bought in as well.’

Mr Jeffrey Hong, executive director of HSR Property Group, said another reason for the rise in transactions was simply that there are more foreigners here.

Latest figures from the Department of Statistics showed there were 533,200 PRs and 1.25 million foreigners in Singapore as of last year, up from 449,200 PRs and one million foreigners in 2007.

Another reason foreigners are buying more homes is that to many, it makes more sense than renting.

Australian Justin Kwan, 26, a doctor who has lived here for more than a year, bought a Newton One condo unit last December. He did not want to go on paying $3,000 in rent, and said property prices were affordable.

Source : Straits Times – 18 Mar 2010