Listed real estate agency CBRE recorded an all-time high for both revenue and earnings in 2017, driven by occupier outsourcing and leasing fee revenue.
Global revenue hit $US14.2 billion ($18 billion), an increase of 9 per cent, with CBRE’s Pacific business reporting a record revenue result in the fourth quarter after a 9 per cent increase in revenue compared with the previous corresponding quarter.
CBRE’s president and chief executive for the Pacific, Ray Pittman, said the strong performance was driven by both brokerage and professional services teams.
“It was a particularly strong quarter for our Capital Markets – Office and Capital Markets – Industrial and Logistics teams, who transacted some of the region’s most significant deals, including 1 Castlereagh Street in Sydney and 205 Queen Street in Auckland,” Mr Pittman said.
However, APAC sales revenue fell 7 per cent compared with a very strong fourth quarter of 2016, when sales surged 42 per cent.
Among the capital markets businesses, global property sales revenue was flat, consistent with the decline in market volumes globally.
The big contributors globally to the record high global revenue were occupier outsourcing which saw growth of 19 per cent and leasing revenue which grew 13 per cent.
Globally, revenue for the fourth quarter totalled $US4.3 billion, an increase of 13 per cent.
Global chief executive Bob Sulentic said the overall business’s performance “significantly exceeded the expectations we discussed on our third quarter earnings call”, and was led by occupier outsourcing and leasing fee revenue growth.
“We regard the macro environment as a supportive backdrop for our business, and we continue to operate within an industry poised for long-term growth,” Mr Sulentic said. “This is due to the growing acceptance of outsourced commercial real estate services, the increasing capital allocation to commercial real estate.”
For full year 2018, CBRE expects to achieve adjusted earnings per share in the range of $US3.00 to $3.15 representing an increase of 13 per cent at the midpoint of the range. About 8 per cent of this was attributable to EBITDA growth while about 5 per cent would be attributable to the “combined net effect of a lower expected tax rate due to US corporate tax reform”.