Colliers earnings dip following ‘soft second half’

The timing of five large deals was behind a decline in real estate agency Colliers International’s revenue and profit last year, chief executive Mark Synnott said.

The New Zealand operations of the Colliers business recorded revenue of $65 million in 2017 compared with $71m the year before.

Colliers’ profits are published because overseas-owned companies must provide the financial results of local operations. Colliers’ parent company is based in Canada.

‘‘It was partly due to the market and market share in a softer second half of 2017. We put it down to banks tightening up funding especially for residential developments, and there was the [general] election,’’ Synnott said.

‘‘It’s the first year since 2009 we haven’t increased revenue.’’

But Synnott said he expected said 2018 to be be a bigger year than each of the past two because of the lag in the five large deals being settled.

One of those deals was the $209m sale of Central Park at Ellerslie, Auckland, on behalf of Goodman Property Trust late last year to a joint venture led by property syndicator and fund manager Oyster Group. The deal is awaiting approval from the Overseas Investment Office.

The profit from $65m revenue came to $5.3m after tax, compared with the previous $6.8m profit. The main expense to the company was

$47m in employee payments. Synnott said the accounts of Colliers’ New Zealand business didn’t reflect the total earnings of all Colliers branches.

Most offices outside the Auckland region were separate companies owned by franchisees.

The franchise operations contributed another $43m in revenue, and they paid franchise fees to the Auckland-based company.

Meanwhile, rival Bayleys is a New Zealand company and does not publish its accounts.

The other main commercial player, CBRE, reported $55m revenue in the year ending December

2017 and $2.8m profit after tax. Employee expenses took $40m. In

2017 CBRE had revenue of $46m and a profit after tax of $1.9m.

The last available figures for JLL were for 2016, when it reported

$27m in revenue and a loss of

$39,000 after tax. In 2015 revenue was $26m and the after-tax profit

$167,000.

SUPPLIED Colliers’ chief executive in New Zealand, Mark Synnott, says 2018 is going to be better for company earnings than each of the past two years.