CBRE profits plummet 89pc last year on weak sales
PRE-TAX profits at the property firm that recently handled the €67m sale of the Burlington hotel in Dublin plummeted 89pc last year as sales dried up.
New figures show profits at CBRE dropped from €1.7m to €196,396 last year after sales dropped 16pc to €11.48m.
CBRE boss Guy Hollis said yesterday that the performance "was a reasonable result in a difficult environment".
The Dublin-based company recently handled the sale of the Burlington Hotel to US private equity giant Blackstone and also oversaw the sale of the Morrison Hotel earlier this year.
Mr Hollis said that there would be €600m-worth of transactions in the Irish commercial property market in 2012 – almost three times the value of commercial transactions in 2011.
However, Mr Hollis pointed out that, at peak, the value of commercial property transactions was €2.6bn.
Mr Hollis attributed some of the improvement to foreign investors investing in prime Irish assets.
"The occupational market remains flat and, until we get job creation, the commercial market is going to remain under pressure," he said.
The directors' report states that property prices have fallen by about 60pc from peak, and this has had a direct impact on fee levels received by the firm in recent years.
"The board and management remained vigilant in terms of optimising fee performance and controlling all discretionary costs," the report adds.
Mr Hollis said those declines may be over in some parts of the market: "In the prime commercial market, there is evidence that property values have stopped dropping and of a slight pick up, but it is not a 'hockey stick' recovery. It is going to be very slow."
The accounts disclose that CBRE paid a dividend of €15m to its parent last year.
The figures show that the firm recorded an operating loss last year of €318,651 with restructuring costs of €203,730 contributing to the loss. However, the interest receivable of €515,047 resulted in the €196,396 pre-tax profit. The figures show that the firm also benefited from a write-back of €208,134 in the carrying amount of a subsidiary.
Remuneration for the firm's 12 directors last year dropped by 32pc from €2.59m to €1.8m.
The returns also show that there was a shake-up of the board on February 20th of this year, with six members resigning who were not replaced.
Staff costs, including directors' pay, last year dropped by 11pc from €9m to €7.9m although the average number of employees at the firm last year increased from 119 to 121.
The profits take account of depreciation of €126,125.
The figures show that the company's administrative expenses last year decreased from €13.6m to €11.4m with the firm's 'other operating income' more than doubling from €42,399 to €101,542.