NEW YORK: Jones Lang LaSalle Inc, one of the world's largest real estate services companies, said earnings rose nearly 62 percent, boosted by a rebound in commercial property sales and leasing, easily beating Wall Street's forecast.
Commercial property, which was battered by the credit crisis and global economic downturn, has staged a rebound, most recently in the US. Global sales of commercial property priced US$10 million or more rose 44 percent to US$582.0 billion, with the number of individual sales up 40 percent, according to Real Capital Analytics on Feb 1.
U.S. commercial property sales recorded the strongest performance in three years. Sales of property in the US more than doubled to US$134 billion, but was still just 29 percent of deal activity seen in 2007, according to Real Capital Analytics.
Jones Lang LaSalle reported fourth-quarter net income of US$84 million, or US$1.91 per share, up from US$52 million, or US$1.19 per share, in the year earlier quarter.
Adjusting for US$2 million of restructuring and noncash charges, Chicago-based Jones Lang LaSalle's profit was US$86 million or US$1.94 per share, easily beating the US$1.66 per share analysts on average had forecast according to Thomson Reuters I/B/E/S.
Jones Lang LaSalle's brokers bring together -- for a fee -- buyers and sellers of buildings as well as tenants and landlords. Those fees typically generate the greatest profit margins. It also arranges financing for those sales.
Results for the company and its chief rival, CB Richard Ellis Group Inc, have been improving as the sector has rallied since the 2009 fourth quarter, making the comparison for the 2010 fourth quarter more difficult.
"For JLL and likely CB, this proves that there's not much slowing of growth," JMP Securities analyst Will Marks said.
Jones Lang LaSalle's fourth-quarter revenue reflected the recovery, as revenue rose 17 percent to US$956 million. Leasing revenue rose 25 percent and sales-related revenue was up 50 percent. In the Americas, leasing jumped 30 percent and sales revenue soared 156 percent.
Additionally, Jones Lang LaSalle oversees the property needs of global companies and manages individual properties. It also has a wholly owned investment management subsidiary, LaSalle Investment Management, which has more than US$41 billion of assets under management.
Jones Lang LaSalle shares hit a 12-month intraday high of US$93.29 and closed up 4.6 percent, or US$4.07, at US$92.71. Shares were unchanged in after-hours trade.-Reuters
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