Real estate services firm Colliers posted a loss from buying an architecture, design and engineering business, while revenue grew 15% from higher property sales.
Toronto-based Colliers, the world's fourth-largest commercial property services firm, said revenue grew to $1.31 billion in the first quarter from the prior-year period.
Colliers reported growth across all business segments in what executives said was a strong quarter, led by a 43% revenue jump in global property sales and financing and a 23% increase in the firm’s expanding division that provides clients property engineering and design services.
“We have made solid progress in a still uneven market, supported by continued strength in our resilient businesses and improving activity in commercial real estate,” Chief Executive Jay Hennick told investors.
Despite the revenue boost, the firm posted a $24 million loss for the quarter, higher than the $4.3 million loss reported in the year-earlier period, in part due to one-time expenses tied to the acquisition of Ayesa Engineering, and a higher-than-expected tax rate related to operations in Europe.
Colliers, the first of the large commercial property services firms to post a loss this year, joined Newmark and larger rivals CBRE and JLL in expecting strong earnings growth and deal activity as a rebound in dealmaking that started last year picks up steam.
Engineering growth
Colliers expects the $700 million purchase of Ayesa, a major Spanish firm based in Seville, to close by mid-year as it aggressively expands its engineering business to diversify its revenue stream.
"The acquisition of Ayesa will accelerate our momentum in engineering even further by expanding our geographic reach, adding in-demand capabilities, and extending our growth runway into new markets," Hennick told investors.
The firm's engineering and design division also provides services such as consulting, project management and civil engineering to public agencies and business clients.
The acquisition of Ayesa followed Colliers' purchase in January of Bestech Canada by Englobe, a Colliers subsidiary, at the start of the year.
Colliers is also seeing gains from commercial real estate. That's its largest business and includes global property sales and financing, leasing, mortgage servicing, advisory and property and project management. Revenue rose more than 13% to $841.2 million for that segment.
Global property sales and other capital markets activity led the segment with a 43% revenue jump, driven by gains in the U.S. and parts of Europe. Leasing revenue rose 9%, with U.S. industrial property transactions leading the growth.
Colliers stuck with its full-year outlook issued in February that it expects revenue growth percentage in the mid-teens, led by a more than 25% revenue increase in its engineering business.