Colliers is a leading real estate services and investment management company. It offers advisory services to increase the value of real estate for property users, owners and investors.

The company generated 60% of its 2020 sales in America, 18% in EMEA, 16% in APAC and 6% in investment management. The company operates in 67 other countries and manages $ 40 billion in assets.

Colliers generates almost 94% of its sales with commercial real estate services and 6% with investment management services. The US accounts for 56% of CRE sales, followed by EMEA (~ 20%) and Asia (~ 18%). Colliers is highly diversified in terms of asset classes, services and regions and has an asset-light model. The asset class includes offices, industrial and logistics services, hotels, retail and residential real estate.

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Investment data

Sales growth and market exposure

With more than 25 years of professional experience, Colliers has developed a strong business model with highly diversified global operations and a higher proportion of recurring and contractual revenue streams. It manages more than 2 billion square feet of space and has successfully executed 42,000 transactions.

The company aims to further increase its stable sources of income through outsourcing, consulting and investment management. is expected to account for half of total sales from just 41% in 2018. Colliers’ revenues are valuable, recurring and contractual in nature. Recurring revenue represented 51% of total revenue in 2020.

Colliers Revenue - 2020

Colliers offers its clients outsourcing and consulting services (45% of sales in 2020), leasing (24%), capital markets (25%) and investment management (~ 6%). The majority of the company’s revenue comes from recurring and contractual outsourcing and consulting services. Colliers continues to invest in technology to stay one step ahead of its competitors. Proprietary platforms include Colliers 360 for corporate users, Colliers Office Expert for users and tenants, Colliers Indsite for industrial users, and ColliersCRM for consultants.

Colliers’ acquisition of Colliers Mortgage and Maser Consulting last year is expected to result in high quality, essential services to further diversify the business and contribute to a stable source of income. The company aims for future growth both organically and through acquisitions. Colliers’ investment management platforms, Harrison Street and Colliers Global Investors, should continue to deliver significant value to Colliers and make it one of the world’s leading alternative asset investors.

The sales of the 2020 financial year were significantly affected by the pandemic (minus 9% year-on-year). Lower leasing and capital market activities due to the pandemic led to a decline. However, sales growth of 10 to 25% is expected for the 2021 financial year. Colliers’ transaction revenues are expected to recover in the second half of the year, and outsourcing & advisory and investment management revenues are expected to remain strong throughout fiscal 2021.

Colliers - Historic sales growth

Dividends

Colliers International has an average annual return of 0.09% and a payout ratio of 60%. The company pays a dividend of $ 0.05 per common share every six months. A dividend increase is long overdue at Colliers International. Most recently, the dividend was increased by 25% in 2016. Colliers’ EPS has grown 19% + CAGR over the past five years.

The company also has a share buyback program and announced a new NCIB that will allow the company to buy back up to 3 million shares in the twelve months ending July 2021.

The real estate services and engineering services markets are huge, with more than $ 340 billion in opportunities. Colliers has good growth potential as the five largest companies only have a market share of ~ 30%. The company can benefit from massive consolidation opportunities and diversify into social and other horizontal infrastructures.

Colliers has an asset-light model with strong cash flow and balance sheet, as well as extensive access to capital. About 60% of AEBITDA occurs again in nature. Additionally, there are modest CapEx requirements that support strong EBITDA into free cash flow conversion. The AEPS for the 2020 financial year was affected by the pandemic.

However, Colliers has a history of strong operating cash flow and low capital costs. The company has taken significant steps to align costs across all service lines and has achieved cost savings of $ 150 million for 2020. Colliers is forecasting an increase in AEBITDA of 10 to 25% for the 2021 financial year.

competition

Colliers operates in a highly fragmented, growing industry. It competes with companies like Altus Group Ltd., Brookfield Property Partners, Tricon Capital Group, FirstService Corp. etc. The Altus Group is a leading provider of software, data solutions and consulting services for the global commercial real estate industry.

It is the leader in CRE core practices and is known for its large global blue chip customer base. FirstService Corporation is a leading real estate services company in North America and the largest manager of shared apartments.

Bottom line

Colliers’ focus on professional real estate with high added value as well as recurring and diversified income offers a broad competitive advantage. As one of the top five global companies, Colliers is well positioned to capitalize on potential market share opportunities, consolidation and value-added services in a highly fragmented, growing industry.

The company should also benefit from increasing retail, e-commerce, and industrial demand in the post-COVID world.

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