Jimmy Shan

Jimmy Shan questioned the operating leverage within real estate services, the extent of excess capacity in the organization, and whether a recovery in secondary U.S. markets would provide better future upside.

Answer

Christian Mayer (CFO) confirmed 22% operating leverage on incremental revenue in Q3 for real estate services and expects 20%+ leverage to continue. He also stated that the 4,500 productive brokers represent significant excess capacity ready to increase productivity as markets improve. Jay Hennick (Global Chairman and CEO) added that the broker count is up 15% from peak production, indicating substantial upside. Jay Hennick (Global Chairman and CEO) clarified Colliers' strong, balanced market position across major and secondary U.S. markets, emphasizing resilience despite soft times.

Jimmy Shan questioned the operating leverage within real estate services, the extent of excess capacity in the organization, and whether a recovery in secondary U.S. markets would provide better future upside.

Answer

Christian Mayer (CFO) confirmed 22% operating leverage on incremental revenue in Q3 for real estate services and expects 20%+ leverage to continue. He also stated that the 4,500 productive brokers represent significant excess capacity ready to increase productivity as markets improve. Jay Hennick (Global Chairman and CEO) added that the broker count is up 15% from peak production, indicating substantial upside. Jay Hennick (Global Chairman and CEO) clarified Colliers' strong, balanced market position across major and secondary U.S. markets, emphasizing resilience despite soft times.

Jimmy Khing Shan asked about the acquisition multiple for Round Shield and the capital allocation strategy between IM and engineering. He also questioned if Colliers' larger non-U.S. industrial leasing presence could explain its relative performance weakness.

Answer

CFO Christian Mayer disclosed the Round Shield multiple was in the 'low teens' and emphasized a balanced capital allocation approach across all segments. He also confirmed that the company's significant industrial leasing exposure in markets like Canada and Australia could be a factor in its recent performance. CEO Jay Hennick added that the company is always open to acquisitions across all business lines.

Jimmy Shan asked about the acquisition multiple for RoundShield, the outlook for IM versus engineering acquisitions, and whether the company's large non-U.S. industrial leasing business contributed to recent weakness.

Answer

CFO Christian Mayer disclosed the RoundShield multiple was in the "low teens" and affirmed a balanced capital allocation approach across all segments. CEO Jay Hennick confirmed they are always open to acquisitions. Regarding leasing, Christian Mayer acknowledged that the company's significant exposure to markets like Canada and Australia was a potential contributing factor to the performance.

Jimmy Khing Shan asked about the acquisition multiple paid for Round Shield and the future capital allocation strategy between investment management and engineering. He also questioned if the relative weakness in industrial leasing could be attributed to a larger non-U.S. business mix compared to peers.

Answer

CFO Christian Mayer disclosed that the Round Shield acquisition was priced in the 'low teens area' and affirmed the company's balanced approach to capital allocation across all three business segments. He also confirmed that Colliers' significant industrial leasing presence in markets like Canada, Australia, and Western Europe is a potential factor in its recent performance.

Jimmy Shan inquired about the acquisition multiple paid for Round Shield and the future capital allocation strategy between investment management and engineering. He also asked if Colliers' large non-U.S. industrial leasing presence contributed to the segment's relative weakness.

Answer

CFO Christian Mayer disclosed the Round Shield multiple was in the "low teens area" and emphasized a balanced capital allocation approach across all three segments. CEO Jay Hennick added they are always open to acquisitions where they see opportunity. Mr. Mayer also confirmed that the company's significant exposure to markets like Canada and Australia was a potential factor in the industrial leasing results.

Jimmy Khing Shan from RBC Capital Markets asked for the acquisition multiple paid for Round Shield and future capital allocation priorities between Investment Management and Engineering. He also questioned if Colliers' large industrial leasing presence outside the U.S. could explain its relative performance weakness.

Answer

CFO Christian Mayer disclosed the Round Shield acquisition multiple was in the 'low teens' and affirmed that capital allocation will remain balanced across all three business segments. He also confirmed that the company's significant exposure to international markets like Canada and Australia was a potential contributing factor to the industrial leasing results. CEO Jay Hennick added that the company is always open to acquisitions where it sees opportunity.

Jimmy Khing Shan asked about the acquisition multiple paid for Round Shield, future capital allocation priorities between IM and engineering, and whether a large non-U.S. industrial leasing business could explain the segment's relative weakness.

Answer

CFO Christian Mayer disclosed the Round Shield multiple was in the "low teens area" and affirmed a balanced capital allocation strategy across all segments. CEO Jay Hennick added they are always open to acquisitions. Regarding leasing, Mayer confirmed that Colliers' significant exposure to international markets like Canada and Australia was a potential contributing factor to its performance relative to peers.

Jimmy Shan asked for clarification on the strong Q1 Investment Management margin given the full-year guidance for flat to modest declines. He also requested an update on the progress of back-office and fundraising integration within the segment.

Answer

CFO Christian Mayer explained that the Q1 margin increase was a factor of lower incentive compensation, partially offset by higher headcount, and reiterated the full-year guidance for flat to slightly down margins due to continued investment. CEO Jay Hennick added that the company is focused on leveraging scale and talent to deliver performance and new ideas, with more updates to come on this one-step-at-a-time integration.

Jimmy Shan sought clarification on whether the integration of the Investment Management platform would make it easier to acquire other asset managers. He also asked if the current investments include hiring for new products and what the $5 billion to $8 billion fundraising target implies for the 2025 guidance, requesting details on the new funds being launched.

Answer

CEO Jay Hennick confirmed the integration would facilitate future M&A and that they are investing in personnel for new products, like Harrison Street's data center fund. CFO Christian Mayer affirmed the $5B-$8B fundraising target is what underpins the 2025 financial projections. Mr. Hennick added that there are five new vintage funds being launched, alongside other new products from platforms like Basalt and Rockwood.