CBRE full-year earnings drop on interest rate woes
CBRE has posted a decline in its latest full-year earnings as interest rate and debt availability pressures continued to hurt revenues in some of its divisions, including its capital markets business.
However, the group ended the year on a more upbeat note after recording operating profit growth across all of its segments during Q4.
Core EBITDA dropped by 23.7% to $2.2bn (£1.7bn) for the year ended 31 December 2023, even as total revenue grew by 4.1% to $31.9bn. Core adjusted net income plunged by a third (33.9%) to around $1.2bn.
CBRE has posted a decline in its latest full-year earnings as interest rate and debt availability pressures continued to hurt revenues in some of its divisions, including its capital markets business.
However, the group ended the year on a more upbeat note after recording operating profit growth across all of its segments during Q4.
Core EBITDA dropped by 23.7% to $2.2bn (£1.7bn) for the year ended 31 December 2023, even as total revenue grew by 4.1% to $31.9bn. Core adjusted net income plunged by a third (33.9%) to around $1.2bn.
The firm did not share full-year comparisons for its business segments. In the capital markets arm, global sales revenue declined by 20% in Q4 compared with the same period in the previous year, with the EMEA business down by 16%. CBRE said its sales revenue declines were “less pronounced in industrial and retail than in multi-family and office, supported by healthier fundamentals”.
CBRE said that despite a “difficult year”, it nonetheless delivered the third-highest full-year earnings in its history.
An uptick in activity during Q4 meant that CBRE ended the year on a better footing. Total revenue was up by 7.7% to nearly $9bn in Q4, compared with the same quarter in 2022. Earnings also improved, with core EBITDA rising by 6.8% to $737m and core adjusted net income up by 3.2% at $426m.
CBRE said the most resilient parts of its business underpinned its earnings performance. These included the entire Global Workplace Solutions segment, loan servicing, valuation, property management and recurring asset management fees in the investment management business.
Bob Sulentic, CBRE’s chair and chief executive, said: “We ended 2023 on a high note, with fourth-quarter year-over-year operating profit growth across all three of our business segments.
“Even though 2023 was a difficult year for commercial real estate, we delivered the third-highest full-year earnings in CBRE’s history, as our resilient businesses continued their strong growth. This partly offset market-driven revenue declines in businesses that are sensitive to interest rates and debt availability.”
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