Colliers posted a 16% jump in revenue as growth in the global real estate services firm’s burgeoning engineering business helped offset a first-quarter decline in leasing.
Toronto-based Colliers said revenue climbed to just over $1.1 billion in the first three months, overcoming a 5% drop in leasing revenue.
The firm's fast-expanding engineering and design division that provides such services as architecture, consulting, project management and civil engineering to public agencies and business clients generated revenue of $378 million, a 61% jump over the prior-year quarter, Colliers Chief Financial Officer Christian Mayer told investors during the company’s earnings call Tuesday.
Colliers — Canada's largest real estate services firm and the world’s fourth-largest ranked by revenue — joined such rivals as CBRE and Newmark in taking a guarded approach to the rest of the year.
The company, like Cushman & Wakefield, said clients are making real estate decisions in the face of U.S. tariff concerns.
“We continue to carefully monitor our clients for potential tariff or government policy-related impacts, but to date, are not aware of any significant issues,” Mayer said.
Still, "international trade tensions and interest rate volatility could impact our clients and our businesses,” Mayer said, prompting the firm to take a cautious stance in setting a revenue forecast.
“We currently expect transactional revenue choppiness to continue in the second quarter but see an improvement in operating conditions in the back half of the year,” Mayer added.
Leasing revenue dipped in part due to especially strong activity in the prior-year quarter, when Colliers closed a couple of large data center deals. The company expects deal activity to rebound in coming months, driving mid-single-digit growth in leasing revenue for the full year.
Colliers also saw 10% growth in global property sales and other capital markets activity, with gains across all the company’s property types and regions. Debt financing activity picked up, driven by growing multifamily loan refinancing volume in the United States.
Shifting business
The company has shifted a big chunk of its focus to engineering and investment management and other services that provide stable revenue streams.
The move has made Colliers less vulnerable to dips in the economy that typically affect the amount of transaction fees it earns from representing clients.
Over the past year, revenue from engineering and other recurring services made up 72% of the company’s earnings, "highlighting the strength and resilience of its highly diversified business model," Colliers said in its earnings statement.
The engineering division, which has grown to more than 9,000 professionals and posted $1.5 billion in annualized revenue, is now “one of the top global [engineering] players in the industry, with additional opportunities for growth,” CEO Jay Hennick told investors.
Colliers this week announced its latest acquisition: Terra Consulting Group, a Chicago area-based engineering firm with 70 employees that specializes in telecommunications infrastructure. In the past two months, Colliers announced plans to acquire Toronto-based real estate services firm Triovest and added Australia-based urban planning firm Ethos Urban.
JLL and Marcus & Millichap, the last of the publicly traded brokerages to report first-quarter financial results, are scheduled to release earnings on Wednesday.