Cushman & Wakefield Excellent Recovery in First Half of 2021

a boom in the commercial real estate services industry since the nadir of the real estate-driven global financial crisis of 2007. As the third-largest player in the space by market cap, Cushman & Wakefield has benefited disproportionately from various tailwinds that have underpinned an impressive run of growth. Key to this success has been the company’s industry-leading brand reputation and a platform that melds complementary business lines in areas such as property sales, leasing, project management, and outsourcing to serve its corporate and institutional clients.

Although Cushman & Wakefield nominally reports its segments on a regional basis, it also discloses the amount of revenue coming from each business line. Among these, the property, facilities, and project management business is the largest and also the most stable, providing contractual revenue from corporate customers. This business line, which contributes around 54% of companywide revenue, is where Cushman & Wakefield provides many of the services needed by corporations that occupy real estate.

Finally, the company’s valuation and other business line include several services for corporate and institutional clients, which include appraisals that are used for various purposes. The leasing business line is Cushman & Wakefield’s second largest, contributing around 23% of companywide revenue. In this business line, the company’s brokers work with owners and occupiers of commercial real estate during the leasing process, primarily by executing lease agreements. Similarly, the capital markets business line, which contributes around 14% of companywide revenue, is where brokers facilitate the sale and purchase of commercial real estate property.

Financial Strength

Cushman & Wakefield has somewhat concerning financial health. Commercial real estate is highly cyclical and is subject to significant volatility during downturns, meriting a more cautious approach. Cushman & Wakefield’s higher level of leverage is the result of an aggressive acquisition strategy that has helped cement the firm’s position as a global provider able to compete effectively with CBRE and JLL. In response to the corona virus crisis, Cushman & Wakefield announced it would issue $650 million in senior notes, bringing further attention to its borderline precarious financial situation.

Bull Says

As one of the largest of only a few truly international one-stop shops, Cushman & Wakefield is poised to continue taking share from competitors in a growing industry that increasingly rewards scale.

The trend of corporate outsourcing represents a significant opportunity and area of growth for Cushman & Wakefield.

Cushman & Wakefield is emerging as an authority on the topic of workplace protocols amid the corona virus era of social distancing, which will allow it to win new outsourcing contracts with major clients.

Company Profile

Cushman & Wakefield is the third largest commercial real estate services firm in the world with a global headquarters in Chicago. The firm provides various real estate-related services to owners, occupiers and investors. These include brokerage services for leasing and capital markets sales, as well as advisory services such valuation, project management, and facilities management.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.