Jones Lang LsSalle Earnings: Significant Declines in Global Transaction Volume in Brokerage Business

Narrow-moat-rated Jones Lang LaSalle's, or JLL’s, first-quarter results were impacted by significant declines in global transaction volume. The company reported that global direct investment sales were down 54% in local currency during the first quarter, with the Americas down 61%, EMEA down 53%, and Asia-Pacific down 28%. Global office leasing volumes were also down 18% in the first quarter compared with the first quarter of 2022. In the industrial sector, gross leasing volumes in U.S. and EMEA were down significantly on a year-over-year basis and were also below their five-year historical averages. Industrial net absorption in the Asia-pacific region remained strong and was considerably above the five-year historical average. For context, the office and industrial sectors contribute approximately 85%-90% of leasing revenue. We think that the pressure on the brokerage business will intensify further this year given our macroeconomic outlook and rising interest rates.