CBRE Q2 EMEA revenues driven by France, UK

Real estate services group CBRE posted higher revenue in the EMEA region in the second quarter of 2013 but saw earnings fall due partly to severance costs.

The adviser saw EMEA revenue rise 9% to $270.3 mln (€204.5 mln) compared with $248.2 mln for the year-earlier period. The increase was primarily driven by improved performance in France and the UK, most notably in property, facilities and project management. Elsewhere in Continental Europe, performance remained weak.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to $11.7 mln from $15.7 mln in last year’s second quarter, while operating income tumbled to $8.3 mln from $12.6 mln for the same period in 2012.

CBRE said business performance in the second quarter reflected a shift in revenue mix towards lower-margin property, facilities and project management services as well as around $5 mln of severance costs in continental Europe and other expenses.

Michael Strong, executive chairman for EMEA, commented: ‘While the economic recovery remains uneven, we are encouraged by the first signs of improvement in real estate markets across the region. The strength of our business gives us confidence to continue developing and investing in our company through a mix of accretive strategic acquisitions, key hires and platform investments to further enhance our offering to clients.’

Overall group revenue increased by 9% to $1.74 bn from $1.6 bn in the second quarter of 2012, driven mainly by a strong performance in Asia Pacific where revenues jumped 16% year-on-year.

Excluding selected charges, group net income increased 16% to $101.8 mln from $88.0 mln in the second quarter of 2012. Excluding selected charges, EBITDA climbed 10% to $243.1 mln from $220.9 mln in the second quarter of 2012.

Selected charges in 2013 related to carried interest incentive compensation expense while selected charges in 2012 related to the integration of the acquired ING REIM businesses.

CBRE group president and CEO Robert Sulentic said revenue growth was seen across all three geographic regions. ‘This performance is especially noteworthy in light of continued weak global economic growth and heightened financial market volatility late in the quarter. In addition, as previously discussed, we also made significant incremental investments in our platform, which are designed to support future growth and better serve our clients.’