Capital Markets And Engineering Contracts Drive Colliers' Q4 Growth

Colliers reported broad revenue growth in the fourth quarter as the company grows through acquisitions, particularly in the engineering industry. The Canadian firm ended the year with $4.8B in revenue, up 11% from 2023. 

Revenue growth in the firm’s capital markets and engineering services propelled the company’s $1.5B in fourth-quarter revenue, the brokerage announced Thursday morning. 

Colliers expects activity to continue to accelerate across its business lines into this year, and is projecting percentage revenue growth to be in the high single-digit to the low teens and slightly stronger growth in its earnings per share. 

“Colliers is hands down the third-most recognized firm in the world,” Colliers CEO Jay Hennick said, referencing leading CRE brokerages. “We have leading market positions in every major market around the world, and we have a platform that continues to grow market for market, despite the headwinds that this industry is under.”

The firm’s revenue beat expectations, but its $2.26 EPS in Q4 missed analysts' targets, and Colliers’ stock was trading down by more than 9% Thursday.

“Weakness in the bottom line will likely push shares lower, although we continue to be encouraged by the growth in Colliers’ recurring profit streams and the early indications of transactional activity recovering, especially in capital markets” Stephen Sheldon, an analyst at William Blair, wrote in an investment note Thursday morning. “We remain highly confident in Colliers’ multiyear growth outlook.”

Fourth-quarter revenues were up 22% from a year earlier, considerably higher than the 12% annual increase in the third quarter. Recurring revenue accounted for 71% of Q4 earnings. 

The company continues to target strategic acquisitions after it boosted its revolving credit facility by $500M in December and added an additional $1.3B in capital commitments during the fourth quarter. Colliers estimates its capital expenditures in 2025 to be between $100M and $115M.

Capital markets led Colliers’ revenue growth in its real estate services segment, up 23% year-over-year in Q4 with transaction activity rebounding globally, particularly in Europe and the United States, while China, Hong Kong and South Korea lag. 

“Capital markets business is showing cyclical recovery as interest rates and asset valuations stabilize, albeit slower than we expected,” Hennick said. “Our significantly larger scale now positions us extremely well to deliver even stronger results in the future as the market recovers.”

Leasing momentum is also accelerating, with Colliers closing multiple large office and industrial deals in Q4, the brokerage said. 

Investment management operations were up a modest 6% year-over-year at $136.6M for the quarter. In all, Colliers’ real estate services segment saw $3.1B in revenue in 2024, up 8% from the prior year. 

The firm’s engineering segment saw revenue grow 61% year-over-year to $421M, driven by recent acquisitions. Colliers completed four engineering acquisitions in the fourth quarter, including the December tuck-in of Seattle-based design firm MG2, and the firm now has more than 8,000 employees in its engineering segment. 

“We're company building right now,” Hennick said. “And we believe, coming out of this, we will have an exceptional platform that will be positioned beautifully to continue to accelerate its growth.”

Real estate services accounted for 63% of Collier’s fourth-quarter revenue, while engineering contracts captured 28% of revenue, up seven percentage points from a year earlier. The remaining 9% of revenue came from investment management, with Colliers’s $99B in assets under management up slightly from the prior quarter.  

The investment management division is entering a new fundraising cycle, which Chief Financial Officer Christian Mayer said would strengthen revenue streams in the segment.

Colliers is targeting between $5B and $8B in additional capital raised for 2025 and is looking at midmarket investments, where Hennick believes the firm has a competitive advantage.  

“This is a building year with a new fundraising cycle starting, and we expect fundraising to pick up meaningfully into late 2025 hopefully and certainly in 2026,” Mayer said. 

Growing uncertainty around tariffs and trade will weigh on Colliers’ bottom line in 2024, Hennick said. The Toronto-headquartered firm expects exchange rate fluctuations to impact margins by between two and three percentage points, but Hennick said it was hard to model the impact of new trade policies from President Donald Trump’s administration.

“There's a lot of factors that could change,” he said. “But when it changes, it could make a material positive impact on our numbers for 2025 and beyond.”