Colliers (CIGI) Q3 2025: Engineering Revenue Jumps 36% as Platform Scale Fuels Global Growth
Colliers’ third quarter saw engineering revenue surge, powered by acquisitions and organic expansion, while real estate services and investment management both contributed to a diversified growth profile. Margin headwinds from integration and recruiting costs were offset by strong operating leverage and a robust fundraising pipeline. Investors should watch for continued engineering expansion, investment management integration progress, and capital deployment as key drivers into 2026.
Summary
- Engineering Platform Expansion: Acquisitions and organic growth are positioning Colliers as a top-tier global engineering player.
- Integrated Asset Management Push: Harrison Street unification brings margin pressure but aims to unlock scale and client value.
- Capital Markets Recovery: Broad-based rebound is underway but remains below historical highs, signaling future upside potential.
Performance Analysis
Colliers delivered consolidated revenue of $1.46 billion, up 23% year over year, with engineering and real estate services leading the gains. Engineering, which now generates over $1.7 billion in annualized revenue and employs more than 10,000 professionals, saw net revenue rise 36%, driven by seven acquisitions and 6% internal growth. Real estate services grew 13%, with capital markets up 21% and leasing up 14%, both benefiting from a broad-based recovery across geographies and asset classes. Outsourcing revenues increased 8%, led by valuation and advisory services.
Operating leverage remained strong, with real estate services segment margin up 180 basis points to 11.3%, aided by higher transactional revenues. Engineering margin dipped slightly to 15.2% due to service mix, while investment management margin declined to 42.3% as integration costs weighed. Year-to-date fundraising in investment management reached $4.4 billion, with $9 billion in dry powder poised for deployment. Management expects to meet its consolidated full-year outlook, with potential outperformance in engineering and real estate services offsetting modest shortfalls in investment management.
- Engineering Acceleration: 36% net revenue growth and mid-to-high single-digit organic gains signal sustained momentum.
- Real Estate Services Rebound: Capital markets and leasing both posted double-digit growth, with pipelines solid into Q4.
- Margin Dynamics: Integration and recruiting costs pressured segment margins, but strong revenue growth drove operating leverage above 20%.
Colliers’ diversified model is delivering across cycles, with engineering and real estate services offsetting temporary margin drag in investment management. The company’s balance sheet remains healthy, with leverage expected to fall below two times by year end.
Executive Commentary
"In just five years since entering the engineering sector, we have established a significant multi-discipline global platform. This business now generates over 1.7 billion in annualized revenue and employs more than 10,000 professionals. Our unique partnership philosophy and decentralized operating model sets us apart and enables us to continue to capitalize on compelling growth opportunities in this rapidly expanding industry."
Jay Hennig, Global Chairman and Chief Executive Officer
"Our third quarter revenues were $1.46 billion, up 23% year over year. Our engineering and real estate services segments led the increase from a combination of internal growth and recent acquisitions. Segment net margin was 11.3%, up 180 basis points year over year, on solid operating leverage from higher transactional revenues, partly offset by continued investments to strengthen our geographic and asset class capabilities."
Christian Mayer, Chief Financial Officer
Strategic Positioning
1. Engineering as a Global Growth Engine
Engineering has become Colliers’ largest organic and acquisitive growth lever, with year-to-date organic growth at 8% and a clear path to further scale in the U.S., Canada, Australia, and Europe. The company’s decentralized model and partnership philosophy attract industry leaders, enabling Colliers to fill geographic and sector “white space” efficiently. Management targets doubling engineering revenue and profitability over the next few years, highlighting the segment’s centrality to the long-term strategy.
2. Investment Management Integration and Capital Deployment
The ongoing integration of investment management under the Harrison Street Asset Management (HSAM) brand is creating near-term margin headwinds, but management emphasizes the long-term value of a unified platform. Over 85% of funds are long-dated or perpetual, providing stable earnings. $9 billion in dry powder across funds, including alternatives and credit, positions Colliers to benefit from capital deployment as market conditions improve. Fundraising remains strong, with $4.4 billion raised year-to-date and new vintages launching soon.
3. Real Estate Services: Broad-Based Recovery and Operating Leverage
Capital markets and leasing are both rebounding globally, though activity remains below historical peaks. Colliers’ balanced footprint across primary and secondary markets allows it to capture upside as the cycle progresses. Outsourcing, especially valuation and advisory, is a steady contributor. The company’s ability to recruit and retain top talent, even at the cost of near-term margin, is seen as a differentiator that supports recurring and transactional revenue growth.
4. Data Centers and Technical Services Differentiation
Colliers is uniquely positioned in the data center value chain, offering not just real estate services but also design, entitlement, project management, and direct investment. The company views data centers as a strategic growth area, though not yet material in revenue contribution. Management is disciplined on M&A valuations, preferring to build organically and through tuck-in deals rather than paying premium multiples for technical capabilities.
5. M&A and Talent Acquisition as Growth Catalysts
Acquisitions remain a core strategy, particularly in engineering and recurring real estate services. Recent deals in Australia and Canada expand Colliers’ reach and add specialized capabilities. Recruiting top professionals is equally prioritized, with dedicated teams focused on filling geographic and asset class gaps, even as this creates ongoing margin pressure.
Key Considerations
This quarter reinforces Colliers’ multi-engine growth model, where engineering, real estate services, and investment management each play distinct but complementary roles. Investors should focus on the sustainability of organic growth in engineering, the pace and cost of integration in investment management, and the company’s ability to deploy capital into accretive opportunities as market cycles turn.
Key Considerations:
- Engineering Scale and White Space: Colliers’ platform is well-positioned for further expansion in the U.S., Europe, and Asia, with management targeting a potential doubling of the segment.
- Investment Management Margin Path: Integration costs are expected to persist for two to three quarters, with margin recovery dependent on successful platform unification and capital deployment.
- Capital Markets and Leasing Upside: Activity is recovering globally but remains below prior highs, offering future revenue and margin tailwinds as investor confidence and rate stability return.
- Recruiting and Retention Investment: Ongoing talent acquisition supports growth but will continue to pressure margins, reflecting a deliberate tradeoff for long-term capability building.
Risks
Integration costs and margin pressure in investment management could persist longer than expected, especially if fundraising or deployment slows. Macroeconomic uncertainty, particularly around interest rates and capital markets activity, remains a risk to transaction-driven revenues. High M&A valuations in hot sectors like data centers could limit inorganic growth or dilute returns if discipline is not maintained. Management’s emphasis on long-term value creation may result in near-term margin volatility.
Forward Outlook
For Q4 2025, Colliers guided to:
- Engineering and real estate services potentially exceeding previous full-year guidance.
- Investment management tracking slightly below prior outlook due to integration costs and fundraising timing.
For full-year 2025, management maintained consolidated guidance:
- Midpoint of $5 to $8 billion fundraising target expected to be achieved.
Management highlighted several factors that will shape results:
- Solid backlogs and pipelines in engineering and capital markets provide visibility into 2026.
- Integration costs in investment management will continue for two to three quarters, with margin normalization expected thereafter.
Takeaways
Colliers’ Q3 results demonstrate the strength of its multi-pronged growth strategy, with engineering scale, real estate services recovery, and investment management integration all contributing to the story.
- Engineering Momentum: Acquisitions and organic growth are transforming Colliers into a global engineering leader, with significant white space ahead.
- Margin Management: Integration and recruiting costs are being absorbed to build long-term capability, but investors should monitor the timeline for margin recovery, especially in investment management.
- Capital Deployment Watch: $9 billion in dry powder is a key lever, with successful deployment and fee activation likely to drive future earnings growth as markets recover.
Conclusion
Colliers continues to deliver on its diversified growth strategy, leveraging engineering expansion, real estate services recovery, and disciplined investment management integration. While margin headwinds persist, the company’s long-term positioning and capital flexibility provide multiple avenues for value creation into 2026 and beyond.
Industry Read-Through
Colliers’ results underscore a broad-based recovery in real estate services and capital markets, but also highlight that activity remains below pre-cycle highs, signaling further upside for the industry as rate stability and investor confidence return. The company’s engineering expansion and full-cycle data center strategy differentiate it from peers focused solely on transactional services. Integration costs and talent investment are common sector themes, with Colliers’ willingness to trade near-term margin for long-term capability likely to be echoed by other consolidators in both real estate services and asset management. Investors across the sector should watch for ongoing consolidation, platform integration, and the deployment of dry powder as the next phase of growth unfolds.