Colliers expects ‘muted’ deal activity for rest of this year
The chief executive of Colliers expects deal activity to remain depressed for the rest of this year, leading to the agency revising its full-year revenue guidance downwards.
Announcing the agency’s results for the first quarter, Jay Hennick (pictured) said the market had suffered from higher interest rates and “challenging debt markets” since the firm last offered an outlook.
“Now with the additional stress on the banking system and increasing limitations on debt availability, there is more uncertainty around property valuations,” Hennick added. “Until interest rates stabilise, and financing of real estate transactions becomes more predictable, we expect transaction activity to remain muted.”
The chief executive of Colliers expects deal activity to remain depressed for the rest of this year, leading to the agency revising its full-year revenue guidance downwards.
Announcing the agency’s results for the first quarter, Jay Hennick (pictured) said the market had suffered from higher interest rates and “challenging debt markets” since the firm last offered an outlook.
“Now with the additional stress on the banking system and increasing limitations on debt availability, there is more uncertainty around property valuations,” Hennick added. “Until interest rates stabilise, and financing of real estate transactions becomes more predictable, we expect transaction activity to remain muted.”
The agency now expects full-year revenue to come in at between $4.4bn and $4.6bn (£3.5bn and £3.6bn), down from earlier guidance of $4.6bn to $4.8bn.
“Lower transaction volumes are now expected to persist for the remainder of the year,” the firm said. “Capital markets revenues are expected to be down 30-40% for the second quarter versus the prior year period, with year-over-year comparisons becoming more favourable in the third and fourth quarters.”
For the first quarter, revenue of $965.9m was about 3.5% lower than a year ago, with adjusted EBITDA down 14% at $104.6m. GAAP operating earnings were roughly halved at $22.1m, with a diluted net loss per share of $0.47.
By segment, the greatest growth was seen in investment management, where revenue was 40% ahead year-on-year at $120.7m. outsourcing and advisory revenue were up 10% at $454.9m, while leasing was flat at $238.4m. Capital markets revenue slumped by some 42% to $151.8m
Hennick, said: “Our shareholders know that Colliers has a history of seizing its greatest opportunities during challenging times. We believe that higher interest rates and tighter access to capital give us a tremendous advantage in completing acquisitions, recruiting key talent and scaling in our newer growth engines that will translate into additional value for shareholders.”
In EMEA, revenue fell by 6% to $143.4m, driven by a fall in capital markets. The division made a $11.3m loss.
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