Property firm’s profit slumps 88%

Pre-tax profits at the property firm that recently handled the €67m sale of the Burlington hotel in Dublin plummeted last year by 88.5% to €196,396.

CBRE is one of Ireland’s largest property firms and new figures show that profits at the firm dropped from €1.7m to €196,396 in the 12 months to the end of December last.

The firm sustained the sharp drop in profits after revenues decreased by 16% last year from €13.63m to €11.48m.

Chief executive of the Dublin-based firm, Guy Hollis, said yesterday the performance “was a reasonable result in a difficult environment”.

CBRE recently handled the sale of the Burlington to US private equity giant, Blackstone and also oversaw the sale of the Morrison Hotel earlier this year.

Mr Hollis said there will 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 the 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.

He said: “The occupational market remains flat and until we get job creation, the commercial market is going to remain under pressure.”

The directors’ report states that property prices have fallen by circa 60% from peak and this has had a direct impact on fee levels received by the firm in recent years.

Mr Hollis said: “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.