Cushman & Wakefield, the world’s largest privately held commercial real estate services firm, yesterday (Tuesday) reported positive earnings performance.
As the company continues to execute “strategic growth initiativesˮ and expand its platform, consolidated gross revenue was up 3.2 percent and consistent with prior year quarter.
Despite continuing uncertainty in global economic environment, operating income and earnings before interest grew 5.9 percent. And net income improved $4.6 million to $6.8 million.
“In the first half of 2012, we made significant progress in executing our long-term strategic plan, investing in quality talent and positioning ourselves for growth within key markets and service lines,” said Glenn J. Rufrano, president and CEO of Cushman & Wakefield.
“We remain focused on delivering meaningful value to our clients, advising on how to best leverage their real estate to achieve their business goals, particularly in this challenging economic climate.”
Cushman & Wakefield, which is majority-owned by EXOR S.p.A., the investment company controlled by the Agnelli family, reported that second-quarter 2012 gross revenue decreased less than 1%, or increased 3.2% excluding the impact of foreign exchange, to $503.7 million, as compared with $504.4 million for the second quarter of 2011.
Second quarter 2012 commission and service fee revenue declined 6.1%, or 2.6% excluding the impact of foreign exchange, to $381.6 million, as compared with $406.3 million for the prior year quarter. The slight decline reflected a slowdown in transactional activity resulting from the continuing uncertainty impacting the global economic environment, according to the company.
However, these declines were partially offset by continued growth in the Corporate Occupier & Investor Services (CIS) business, a major component of the firm’s strategic growth plan, as Cushman & Wakefield continues to focus on enhancing its recurring revenue streams. CIS business revenue increased 4 percent globally and 29.1 percent in the U.S, while the number of current client engagements increased 21% and the size of the managed portfolio increased by almost 10%.
Operating income increased $1.2 million, or 5.9%, to $21.4 million for the second quarter of 2012, as compared with $20.2 millionfor the second quarter of 2011, largely driven by a decrease in certain operating expenses, which offset the reduction in commission and service fee revenue.
Cushman & Wakefield acted as exclusive leasing and sales agent for several prestigious properties worldwide in the past year.
Highlights included advising on two of the largest property sales in Hong Kong (Monterey Court in Jardine Lookout and Kowloon Commercial Center in Kowloon); arranging the $610 million sale of 100 Federal Street Tower in Boston on behalf of Bank of America, the largest investment sale in the U.S. this year; representing Salesforce.com in the largest long-term office lease signed in San Francisco in a decade; arranging the largest U.S. suburban build-to-suit on record on behalf of Green Mountain Coffee; and representing luxury retailers Burberry and Tom Ford in establishing flagship stores in Hong Kong and the UK, respectively.