CBRE to Hire Hard-to-Lure Tokyo Property Brokers as Sales Tripleby and
Property brokerage plans to hire five to 10 people annually
Real estate transactions poised to increase this year: CBRE
CBRE Group Inc., the world’s largest property services company, plans to boost hires for its real estate brokerage business in Tokyo by five to 10 people on an annual basis for the next “several years” as it seeks to expand market share and foreign investors remain bullish on the market.
CBRE employs about 70 real estate brokers in Japan, up about 20 percent from the end of 2010, while sales have more than tripled in that period, according to Yukihiro Ogasawara, an executive managing director at CBRE in Tokyo who oversees local capital markets. Ogasawara declined to specify the sales amount. CBRE, whose deals include office buildings, warehouses, retail and residential properties, has nine offices around Japan and may add brokers outside of the capital too, he said.
“It is a huge market and there is plenty of room for us to increase our presence,” said Ogasawara at the company’s Tokyo office in an interview this week. “It feels like deal opportunities are picking up.”
CBRE will be competing for talent with local rivals, who typically have an advantage over foreign firms when it comes to hiring. Ogasawara said that relationships with clients matter a lot more than prospective hires often appreciate.
“Many people involved in the Japanese property brokerage business tend to believe that they can succeed because of their company and its trustworthiness,” said Ogasawara. “From the clients’ perspective, this is a people’s business and they actually put a lot of importance on relations with the individual.”
CBRE forecasts that Japanese property transactions will rise 15 percent this year to about 4 trillion yen ($35.6 billion) after a 59 percent drop in the final quarter of last year, when deals in excess of 100 billion yen declined. Transactions will probably increase in 2016 as some Tokyo investors sell properties to lock in profits after three years of Prime Minister Shinzo Abe’s inflationary policies and as more deals in cities outside the capital take place, said Hiroshi Okubo, head of research at CBRE in Tokyo, in the same interview.
Prime Tokyo office properties offer investors an average spread over local government debt of about 300 basis points, compared to 100 basis points to 200 basis points in cities in the U.S. and elsewhere in Asia, according to Okubo. With the introduction of negative interest rates by the Bank of Japan last month, the rate of return investors may be willing to accept for Tokyo office property may fall, CBRE said in a report in this month.