JLL's Revenue And Office Leasing Jump By Double Digits

JLL's headquarters in Chicago.
Jll's Headquarters In Chicago

JLL ended the second quarter with a 12% spike in revenue compared to last year's figure, led by a pickup in deals and strong returns in workplace and project management.

Revenue grew by 19% for the brokerage's workplace management arm and by 13% for the project management sector in the second quarter. All told, JLL brought in $5.6B across its service lines.

The Chicago-based brokerage's revenue also grew year-over-year in capital markets and property management.

"We have a long runway for growth in these business lines," CEO Christian Ulbrich said on an earnings call Tuesday.

Global office leasing volume improved by 10% year-over-year, and U.S. office leasing activity went up 19% due to improving economic conditions and the stabilization of hybrid work, Ulbrich said.

The volume of large office deals being signed is still well below prepandemic levels. Ulbrich said new groundbreakings have fallen to the lowest level on record in the U.S. and Europe, and supply is expected to shrink into 2025.

JLL didn't see improvement across every business line, as revenue from its Spark Technologies fund and investment management arm were down 7% and 27% from Q2 2023 figures, respectively.

Chief Financial Officer Karen Brennan said a decline in incentive fee activity with LaSalle compared to the year before and a $12M increase year-over-year in carried interest expense from JLL Technologies were notable contributions to losses for the quarter.

Brennan said investor confidence is improving, but the shift is tenuous.

"We see signs of improving investor sentiment, which bodes well for higher growth rates in the second half of 2024," she said. "However, as we've seen in the recent past, factors that impact transaction activity, such as the interest rate outlook and geopolitical risk, can shift quickly and influence field timing and closing rates, particularly in the near term."

Following the call, JLL's stock price rose 3% in Tuesday trading. Its adjusted diluted earnings per share rose from $2.12 the previous year to $2.55 in Q2.

Similarly to JLL, CBRE reported strong returns from workplace operations, leading to a 9% increase in revenue in the second quarter. Colliers recorded a 6% bump in revenue and also saw an uptick in office leasing activity. Cushman & Wakefield's results were less positive, reporting a 5% year-over-year drop in revenue in the second quarter.

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