JLL Earnings: Capital Markets and Equity Losses Weigh on Results, but Outsourcing Remains Strong

Narrow-moat JLL’s fourth-quarter results were mixed as weaker capital markets and equity losses within the JLL technologies segment weighed on overall results. However, the outsourcing business surprised to the upside. The company reported that global investment sales were down 24% during the fourth quarter, with the Americas down 30%, EMEA down 25%, and Asia-Pacific up 1%. The decline in investment sales was broad-based and affected all sectors in the Americas and EMEA. Given our macroeconomic outlook and high-interest rates, we think the pressure on the capital markets business will continue in the near term. It was encouraging to see that the global office leasing volumes were up 4% in the fourth quarter compared with the fourth quarter of 2022. In the industrial sector, gross leasing volumes in the U.S. and EMEA were down significantly on a year-over-year basis. Still, net absorption in Asia Pacific was above the five-year average, supported by a wave of new supply and ongoing demand from e-commerce.