CBRE Group plans to acquire Telford Homes Plc, London-focused multifamily residential and mixed-use property developer, with a development in-process portfolio (total project cost) of $1.66 billion (£1.32 billion) to expand its Trammell Crow Company real estate development business.
Founded in 1948, Trammell Crow Company (TCC) has developed or acquired more than 2,700 buildings totaling 590 million square feet with a value of over $65 billion. TCC is the largest commercial real estate developer in the U.S. with $9.7 billion in active projects in process, and an additional $2.8 billion in the pipeline as of March 31, 2019.
Telford is focused on opportunities to develop middle-market build-to-rent properties, a fast-growing component of the London housing sector.
Telford generated approximately $446 million (£354 million) of revenue and $50 million (£40 million) of pre-tax profit for the 12 months ended March 31, 2019.
Under the terms of the planned transaction, Telford shareholders will receive $4.41 (£3.50) per share in cash, valuing Telford at $336.9 million (£267.4 million).
“Telford gives us a compelling opportunity to build on the success of Trammell Crow Company.The UK is in the early stages of a secular shift toward institutionally owned urban rental housing, similar to what we have seen in the US over the last two decades. Telford is well positioned to lead this trend, and their more than 300 talented professionals operating in London are a great addition to our company,” said Bob Sulentic, president and chief executive officer of CBRE.
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“Being part of Trammell Crow Company will allow Telford to enhance its growth in the build-to-rent / multifamily market in London. Our management team have found that Trammell Crow Company is aligned with both our culture and our current strategy and its platform will give Telford access to far greater resources, improved technology and wide-ranging expertise,” said Jon Di-Stefano, chief executive officer of Telford Homes Plc.
Upon completion of the acquisition, which is expected in the third quarter of 2019, Telford will operate as part of the Trammell Crow Company and its financial results will be reported within CBRE’s Real Estate Investments business segment.
