CBRE's Pacific arm takes 10pc revenue hit as deals slow
The slowdown in major property deals weighed on earnings for commercial real estate agency CBRE’s Pacific business, which recorded a 10 per cent decline in gross revenue in 2020 compared with the previous year.
Overall, CBRE reported a 41 per cent slide in its global earnings to $US752 million ($950 million) as the COVID-19 pandemic put a brake on sales and leasing activity.
Closer to home, Phil Rowland, who heads CBRE’s Asia-Pacific business, said that while earnings overall fell across the region as a result of fewer transactions, revenue from the agency’s valuations, property management and finance arms picked up.
Those results showed the “heightened requirement for client support during the pandemic”, he said.
“A standout was CBRE’s property management business line, which was on the front line during 2020 and lifted revenue as customers focused on providers who could efficiently and effectively deliver products and services oriented towards their current and future needs.
“This included the continued rollout of CBRE’s Host workplace experience platform.”
The growth in the agency’s valuations business line was mostly due to its work in the residential sector, where its market share rose, along with higher valuation volumes coming through as new buyers entered the market and there was an increased focus on property refinancing.
There was nevertheless a “significant decline” in transactional activity in 2020, Mr Rowland said.
However, given the current levels of optimism and the pace of economic recovery expected in Australia this year, CBRE is anticipating transaction levels to improve in 2021, especially in the capital markets sector.
“Sydney and Melbourne are our largest markets, so we’ve placed a significant emphasis on building our talent in these areas, particularly in our capital markets and leasing businesses,” Mr Rowland said.
As well, Mr Rowland said the relative outperformance of the industrial and logistics sector had also been noteworthy. The volume of lease transactions brokered by the agency improved in the fourth quarter, on a year-on-year basis, “highlighting the resilience of this asset class during the pandemic”, he said.
