Colliers CRE sees H1 revenues slide, plans capital raise

UK commercial real estate consultant Colliers CRE saw revenues drop by 32% to £27 mln (EUR 29 mln) in the first six months of 2009 from £40 mln a year before. The company said that 'market conditions are among the most difficult faced by the industry given the virtual standstill in transactional activity arising principally out of the turmoil in financial markets.'

The broker’s operating loss widened to £7.86 mln in the first half of 2009 from £3.24 mln in the year-earlier period. The company is planning to raise £20 mln (EUR 22 mln) in a capital increase which will see FirstService Real Estate Advisors (FSREA) take a large stake in the company. Following the equity raising, FSREA will own 30% of the group's enlarged share capital.

'Our markets, investment and occupier, remained effectively frozen in the first quarter of the year, a continuation of the situation in the last quarter of 2008. There was some stabilisation in the second quarter and activity levels began to pick up noticeably in the third quarter,’ chairman John Ritblat said. ‘The group's high operational gearing has been increased as a result of the cost reduction programme and any further material upturn in activity, and thus revenue levels, will have a positive effect on profitability.'

CEO David Izett expects performance in the second half 'to be significantly better' than in the first six months of 2009 as the company benefits from the group's reorganisation.