CBRE boosts income locally but loses it globally
CBRE’s local revenue from advisory services jumped 13 per cent year on year in the March quarter – in stark contrast to the 7.3 per cent decline the agency suffered across its global advisory business – as demand for valuation services rose and commercial landlords invested in tenant engagement as part of the return-to-office push.
Australia’s buoyant residential market and surging demand for e-commerce facilities that pushed industrial leasing volumes to a 20-year high also boosted performance, said CBRE, which provided no further local numbers.
New York-listed CBRE said the decline in its global advisory services revenue to $US1.7 billion ($2.2 billion) reflected the mixed fortunes of how the pandemic was playing out across the world.
“In Advisory Services, the effects of COVID-19 eased somewhat but continued to hamper lease and sales activity,” the company said.
“While overall revenue declined, strong performance in international markets, coupled with the benefit of cost actions in 2020 and higher gains on servicing rights for government-sponsored enterprise mortgages, led to roughly flat segment operating profit in the first quarter.”
But all in all, the company said the first quarter marked a strong start to the calendar year – also its reporting year – with the $US5.9 billion revenue its highest-ever first-quarter revenue and that the expected improvement in global office markets would strengthen its results.
“Our outlook for 2021 and beyond envisions strong growth even with continued pressure on the office market,” chief executive Bob Sulentic said.
“Clearly, that pressure remains very acute right now, particularly in densely populated gateway cities, and will remain challenging for some time to come.
“However, we strongly believe the pressures on office will recede from today’s extreme levels, as vaccine rollouts continue and companies settle into new normal work regimes.”
CBRE’s Australian head, Phil Rowland, said smaller tenants were leading the return to office locally.
“These occupiers are typically seeking fitted-out office suites that they can move into immediately and landlords have been swift to act, developing an inventory of suitable office stock,” he said.
Separately, CBRE has acquired infrastructure and development services company Thelem Consulting.
Thelem provides development planning & feasibility services, design management, construction planning, contract, commercial and strategic procurement services. Its 40 professional staff across Sydney, Melbourne and Brisbane will boost CBRE’s project management group to 165.
Terms of the deal were not disclosed.
