According to a report published in the ‘Property Week’ – a U.K.-based business-to-business magazine which reports on the worldwide commercial and residential property market, Jones Lang LaSalle Incorporated (JLL) is currently under negotiation to acquire the London-based real estate broker King Sturge LLP, one of the largest international property consultancy firms.
With the acquisition, Jones Lang is expected to become the largest commercial real estate (CRE) broker in the U.K. in terms of sales. Sources familiar with the transaction expect the purchase price to be approximately $260 million. However, both the participating companies have remained non-committal on this issue and refused to neither comment nor divulge the details of the prospective deal.
Chicago-based Jones Lang is a premier full-service real estate investment trust (REIT) that provides corporate, financial, and investment management services to corporations and other real estate owners, users, and investors worldwide. A broad real estate product and service range, and extensive knowledge of domestic and international real estate markets enable the company to operate as a one-stop provider of real estate solutions.
With about 185 corporate offices across the globe, Jones Lang operates in more than 1,000 locations in 60 countries. Jones Lang is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the largest and most diverse in the real estate sector with over $43 billion of assets under management.
Jones Lang continually invests in industry-leading research to identify emerging trends and anticipate future conditions to respond to the shifting market and business trends of its clients. This enables the company to develop new investment products and services tailored to the specific investment goals and objectives of its clients, thereby maintaining profitable long-term relationships during challenging market conditions.
However, given its international presence, Jones Lang often faces unfavorable foreign currency movements, impacting its top-line growth. The Real Estate Services business segment is also cyclical in nature and experiences fluctuations in revenue and operating margins. This in turn could negatively affect the long-term earnings expectations of the company.
We maintain our ‘Neutral’ rating on Jones Lang, which presently has a Zacks #3 Rank that translates into a short-term ‘Hold’ rating, indicating that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Grubb & Ellis Company (GBE), a competitor of Jones Lang.
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