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CBRE Teams up With Excellerate for Africa and Middle East JV


CBRE Group, Inc. CBRE banks on tie-ups and in-fill acquisitions to widen its geographic coverage as well as expand and reinforce its service offerings. In sync with such efforts, the company recently announced that it agreed to collaborate with Excellerate Property Services to form a joint venture named CBRE Excellerate in Africa and the Middle East. It will help the company capitalize on the increasing demand for superior real estate services in the region.

Based in Johannesburg, Excellerate offers property services for property investors and occupiers across sub-Saharan Africa and the Middle East. The company has a decent history in integrated facilities management and specialist technical solutions. Further, more than thirty countries come under its coverage. That makes CBRE’s collaboration with Excellerate a strategic fit.

Particularly, the joint venture will merge CBRE’s facilities management operations in Africa and the Middle East with numerous businesses of Excellerate. These include corporate real estate services, facilities management, valuation and project management services as well as property management services outside South Africa. Expected to be completed in the first half of 2019, this joint venture is subject to customary closing norms and nods from the government.

However, Excellerate’s property management operations in South Africa and its soft-services business will be excluded from this joint venture. Further, CBRE will carry on operating a wholly-owned advisory services business in the Middle East and North Africa.

Notably, CBRE’s extensive real-estate product and service offerings, improving leasing and outsourcing business, in-fill acquisitions, transformational deals, and healthy balance sheet are expected to be conducive to long-term results. Particularly, the latest collaboration with Excellerate is likely to be accretive to its top line as it will help to capitalize on the increasing trend of international corporations, seeking full-service real estate solutions across the region. However, with a shift toward a comparatively lower margin business, CBRE’s margin is likely to be affected in the near term.

Currently, CBRE carries a Zacks Rank #2 (Buy). The company’s shares lost 8.1%, which was narrower than its industry’s decline of 10.6%.

Other Key Picks

Investors interested in the real estate industry can consider some other top-ranked stocks like Colliers International Group Inc. CIGI, HFF, Inc. HF and Jones Lang LaSalle Incorporated JLL. While Colliers International currently flaunts a Zacks Rank of 1 (Strong Buy), HFF and Jones Lang LaSalle carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Colliers International’s Zacks Consensus Estimate for 2018 earnings moved 6.7% north to $3.99 in two months’ time.

The Zacks Consensus Estimate for 2018 earnings for HFF has increased 1.5% to $2.67 over the past two months.

The current-year earnings estimates for Jones Lang LaSalle have climbed 5.6% over the past two months to $10.81.

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