Jones Lang LaSalle Inc (JLL) 2005 Q3 法說會逐字稿

Good day, and welcome to the third quarter 2005 earnings release conference call for Jones Lang LaSalle Inc. Today's call is being recorded. Any statements made about future results and performance or about plans, expectations and objectives are forward-looking statements. Actual results and performance may differ from those included in the forward-looking statements as a result of factors discussed in the Company's annual report on form 10-K for the year ended December 31, 2004 and in our other reports filed with the SEC. The Company disclaims any undertaking to update or revise any forward-looking statements. A transcript of this call will be posted and available on the Company's website within two days of this call.

At this time I would like to turn the call over to Mr. Colin Dyer, Chief Executive Officer for opening remarks. Please go ahead, sir.

Good morning, everybody and thank you for joining us on this review of results for the third quarter and for the first nine months of 2005. With me on today's call is Lauralee Martin, our Chief Financial and Operating Officer. And Lauralee will discuss our financial performance in detail in a moment. I will then discuss market conditions and report on the results of our continued investments in growth at Jones Lang LaSalle. Finally, we will be happy to take your questions.

To frame this morning's discussion, let me review several highlights related to our strong third-quarter performance. Firstly, revenues grew by 21% in both U.S. dollars and local currencies during the quarter, rising to $326.4 million compared to $270 million a year ago. Year-to-date revenues increased 18% in U.S. dollars and 16% in local currencies, totaling $891.6 million. This compares to $754.6 million for the first three quarters of 2004.

Net income for the quarter totaled $20.6 million or $0.51 per share of common stock. Net income for the same period in 2004 was $15.3 million, equivalent to 47% (ph) a share. And even as we invested in the business, we continued to pay down debt. As of September 30 this year, net debt stood at $71 million and $96 million reduction from the same date in 2004. And finally, we celebrated a milestone when we declared our initial semi-annual dividend to shareholders during the quarter and paid it out on the 14th of October.

I'd also like to mention one more and very significant highlight this year. You may have seen that on Monday we announced the two distinguished individuals have joined our Board of Directors. Alain Monie will serve as an independent, nonexecutive director and Lauralee Martin will serve as a management director. Alain Monie is Executive Vice President of Ingram Micro Inc. and President of its Asia-Pacific subsidiary. Ingram Micro is the largest global IT wholesale distributor with sales in 2004 of more than $25 billion. Prior to this appointment Alain was President of the Latin America division of Honeywell International and before that he managed the Asia-Pacific operations of Allied Signal. We believe that Alain's wealth of international experience and knowledge of global markets will serve the Board very well as we continue to expand our global presence.

Lauralee has been instrumental in creating significant shareholder value by strengthening the balance sheet of our Company and that in turn has enabled us to make critical investments in our operations and our service delivery capabilities. Lauralee accepted the additional roll of COO earlier this year and is making similar progress towards achieving one of our five global strategic priorities. That is creating a world-class infrastructure for the firm. Lauralee is quite simply a great asset to our Company and I and the rest of the Board feel privileged and very fortunate to have her as a board colleague. With that we will turn the call over to the aforementioned Lauralee Martin.

Thank you, Colin, and good morning to everyone on the call. As Colin has just covered, we enjoyed another solid quarter across both businesses and geographies. I will start my discussion with our investor and occupier services businesses, which we organized by geographical region. In the Americas region we reported third-quarter revenues of 103 million, a 24% year-over-year increase and year-to-date revenues of 271 million, an increase of 19% over 2004.

The revenue growth in the region came from management services revenues, which increased 25% for the quarter and 21% year-to-date, as well as implementation services revenues, which increased 22% for the quarter and 15% year-to-date over 2004. The corporate solutions product offerings of project and development services and public institutions drove the management services revenue growth. Project and development services grew 36% for the quarter and 29% year-to-date, while revenues from public institutions increased 21% for the quarter and 40% year-to-date.

Tenant representation partially offset this growth where lower client alliance activity resulted in a decline in revenue. Overall, corporate solutions, which generates over half of the region's revenues, grew 7% for the quarter and 13% year-to-date over 2004. The growth in implementation services revenues was driven by capital markets as we continued to expand market coverage. Revenues increased for both the quarter and year-to-date over the prior year by more than 100% for both periods.

The Americas hotels business also had a robust third quarter as the result of its leadership position in a strong market, as well as the acquisition of a hotel real estate broker and advisory firm in the second quarter of this year. Operating income of 12.5 million was up 28% for the quarter, but remained below the prior year level due to the planned strategic investments we have made year-to-date.

In Europe revenues for the quarter increased to 111 million, growing 11% and year-to-date revenues increased to 316 million, a growth of 8% over 2004. The third-quarter performance in Europe continued to see improvement in the German business where both market and economic conditions continued to improve for real estate services. Revenues were up in U.S. dollars for both the quarter and year-to-date compared to 2004 by 35 and 37%, respectively.

Our French business, having closed several large capital markets and agency leasing transactions in 2004, had a revenue decline year-over-year. Year-to-date, the English business, our largest business in Europe, continued its solid performance with revenues up 10%, driven by capital markets. Strong market conditions continue to exist for capital markets across Europe, and the firm benefited from its leading position with continued strength from both within countries and in our pan-European activities.

Third-quarter revenues in Asia-Pacific increased to 63 million, an increase of 13% in U.S. dollars, 9% in local currency. Year-to-date Asia-Pacific revenues increased to 181 million, an increase of 22% in U.S. dollars, 18% in local currencies over the prior year. Third-quarter revenues improved over the prior year despite slippage of several significant transactions into the fourth quarter of 2005. As was the case with the Americas, revenue growth in Asia-Pacific came from both implementation services, which was up 7% for the quarter and 23% year-to-date and from management services, which was up 26% for the quarter and 21% year-to-date, principally driven by the growth in our highly successful property management businesses across the region.

The growth markets of China, Japan and India were particularly strong once again for the quarter and year-to-date revenues have increased 44% over 2004. Our continuing leading position in Hong Kong has led to momentum across all business lines, particularly in transactional services. Revenues in Hong Kong increased 12% for the quarter and 22% year-to-date. Increased transaction volumes, together with an increased market share, resulted in our Asia hotels business having another very strong quarter.

Operating income was 8.3 million year-to-date, a 6.6 million year-over-year improvement. As detailed in our press release, Asia-Pacific's results reflect the refinement to an accounting presentation policy. Excluding this expense reclassification, Asia-Pacific would have shown a $7.7 million improvement in operating income year-over-year.

La Salle Investment Management, our global money management business, had a very healthy increase in third-quarter revenues, including equity earnings compared to last year. Third-quarter revenues decreased over 60% and were up approximately 35% year-to-date over the prior year, bringing revenues to 52 million and 131 million, respectively. Incentive fees increased year-over-year for both the quarter and year-to-date. For the quarter, incentivize sees increased 10.1 million to $13.2 million and year-to-date increased 12.5 million to $16.9 million. The increases were the result of asset sales with the continued liquidation of income and growth to fund, the liquidation of the medical office fund as well as portfolio performance producing strong investment returns for several separate account clients.

Equity earnings increased quarter-over-quarter by 1.1 million. On a year-to-date basis equity earnings were below 2004 by 3.7 million as 2004 included several large transactions it closed in the first nine months of the year. Continued focus on increasing annuity revenue, which represent at least two-thirds of La Salle Investment Management's total revenue, has again led to growth in our advisory fees, which were up 32% for the quarter and 25% year-to-date.

For the firm as a whole operating expenses were 300 million for the third quarter compared to 249 million for the same period in 2004, an increase of 21% in both U.S. dollars and local currencies. Year-to-date operating expenses increased 17% in U.S. dollars, 15% in local currency to 845 million. The increase was driven by investments made to strengthen positions in key local and regional markets and extend our global service lines, as well as increases in accrued incentive compensation, which resulted from accelerated timing of revenues.

Beginning this quarter, as a refinement to an accounting presentation policy, we reclassified non-recurring items to operating expenses for segment reporting purposes only. This did not have any impact on consolidated operating expenses or consolidated operating income. We previously excluded non-recurring and restructuring charges from segment operating expenses. Going forward we will continue to exclude just restructuring charges from segment results.

Interest expense for the third quarter was 1.3 million, which was slightly higher than the prior year. Year-to-date interest expense was 3 million compared to 20 million for the same period a year ago. The prior year included an $11.6 million expense to redeem our 9% senior notes. As a result of this redemption, our year-to-date effective interest rate decreased significantly from the prior year.

We continue to reduce our net debt and at the end of the third quarter as Colin mentioned our net debt stood at 71 million, a $96 million reduction from this time last year. Year-to-date we have repurchased approximately 1 million shares at a cost of $43 million. And have also received approval from our Board of Directors for a new share repurchase program that will allow for the repurchase of up to a total of 2 million shares, including the shares remaining to be repurchased under the current program.

And finally, we continue to sustain our effective tax rate at 25.4% compared to 28% for the same period one year ago. We continue to benefit from favorable market conditions and increased investment allocations to real estate, while seasonal industry patterns concentrate profits in the fourth quarter we continue to emphasize growth in annuity revenues as well as an enhancement to the profit margins of all our product and service lines. We plan to achieve our previously announced subjective of making strategic investments of approximately $12 million this year, balancing the achievement of our current performance with our ambitious, long-term growth objectives.

This concludes my discussion of our third-quarter and year-to-date results, and let me turn the call back to Colin.

Thank you, Lauralee. First, let me review market conditions around the world. Capital flows to our sector remain high. Research indicates that in the U.S. through to the end of September total volume of real estate capital flows increased to nearly $187 billion, up more than 60% (ph) from the same period last year. In Europe we forecast total market volume of more than EUR$100 billion for the full year, exceeding 2004 levels of EUR99 billion.

In Asia-Pacific investor interests continues to focus on the North Asian markets of Japan and Korea due to ongoing attractive yield to cost rates in those markets. Weak activity in Asia is also spreading and today 23 REITs (ph) are listed on the Tokyo and (indiscernible) stock exchanges with a total market capitalization of around $23 billion. As we will see in a moment, our global and regional capital markets teams are well positioned to take advantage of the significant capital flows in all parts of the world.

In regional office leasing markets, vacancy rates continued to trend downwards in the U.S. during the third quarter as job growth strengthened in most markets. Rental rates are rising in select markets, although tenant improvement allowances are still generous in most. In Europe sluggish economic growth in some markets continues to dampen the occupied segment, tick up in Europe was recorded at 2.5 million square meters, equivalent to 27 million square feet during the third quarter, about the same level as in the second quarter but up from 2.1 million square meters in the third quarter of last year.

Third-quarter growth in our Asian office markets were similar to the second quarter. With tight supply, new demand, expansions and relocations all producing a trend to higher rents. The main beneficiaries have been key financial centers Hong Kong, Singapore and Tokyo. I would now like to discuss the progress we are making as we continue to fuel growth in our Company by investing across our operations. As I have said on previous calls, we're focusing on five main areas. Firstly, strengthening our local and regional service operations, expanding our three global service delivery lines, global corporate solutions, global capital markets and La Salle Investment Management and finally establishing the world's standard for client service infrastructure. Our strength in local and regional markets collectively determines the strength of our global service capabilities. It also goes without saying that our financial performance depends in great part on business which we source and execute locally in more than 100 markets around the world.

So here then are a few recent examples of our local and regional market activity. In the Americas we had a good example of collaboration across the business lines during the quarter. Our capital markets team was retained by La Salle Investment Management on behalf of its Florida Office Property Company fund to sell an asset which we have also leased and managed, namely the urban center one and two in Tampa, Florida. Leasing and management and capital markets professionals worked together to present the asset to capital sources, and we were subsequently retained for leasing and management by the new owner, TIAA-CREF.

BP, the global energy company, expanded our Americas' relationship significantly during the quarter, awarding us their 9.2 million square feet office industrial and land portfolio in the U.S., Canada, Latin America and the Caribbean. The work will include tenant representation, land acquisition and disposition, lease administration and facilities management.

Turning to the Asia-Pacific region, in India we were retained by the RM Vit (ph) Corporation to serve as construction manager for a 2.7 million square feet IT facility in Chennai. RM Vit is one of India's largest and most active developers. Our transactional business over in Hong Kong also continued to generate strong results during the quarter. In August, for example we successfully sold storehouse shopping center and also leased 154,000 square feet of office space to Deloitte. In Europe we extended our relationship with WPP, the leading global communications service group, for transactional and project management services. We have worked with WPP for ten years now, and we and now as we have advised our client on due diligence issues relating to continued acquisitions, we've seen the portfolio under management in Europe grow from 5 million to 6.5 million square feet.

We extended another client relationship when London, won its bid to host the 2012 Olympic Games. We had previously worked alongside the London organizers as they prepared for their bid and when it was successful, we expanded our role providing commercial property advice for which properties to be -- for what promises to be the largest sporting event in the history of the UK.

To continue to grow our local and regional businesses, we need to have the right people in the right places. As we previously announced our former European CEO, Robert Orr, having done an excellent job running Europe has moved to our new international capital group. And Alastair Hughes, former head of the English operations, has taken over as head of our European businesses and will continue to be responsible for English operations.

Now the accelerated trend of globalization and global outsourcing drove our decision to build a truly global corporate solutions business. On the one hand, this service delivery capability helps us create new client relationships, while at the same time existing corporate clients are continuing to demand multiregional capabilities of uniform standard from their service providers. One new client, Federal-Mogul, which is a $6 billion automobile parts company based in the U.S. has named us a preferred provider for its non manufacturing, 9 million square feet global real estate portfolio.

In Japan we were appointed by Citigroup to provide that financial services firm with facility management services for their 800,000 square feet portfolio in that country. We were appointed by v/Customer, a global call center technology provider to provide global tenant representation, project development, corporate property and lease administration services. This project covers approximately one million square feet across 15 locations in the U.S., India and the Philippines.

And finally, and pending the signing of definitive agreements, we have expanded our relationship with both a major global technology company and a leading worldwide financial services firm, adding global services delivery to our current national responsibilities for both clients. Our investment in pursuing major cross-border capital markets business is continuing to be rewarded with significant competitive wins of major instructions. For example, we are currently marketing the aerospace building in Washington, D.C. on behalf of Heinz and Sarafin (ph) and 181 West Madison in Chicago for Prudential. In both cases our ability to access a wide audience of international buyers was decisive in securing the instruction to sell.

In Europe through to the end of the third quarter our European capital markets team has completed transactions with a gross value of $13 billion, of which nearly 75% were cross-border transactions. As an example of that, acting on behalf of the European developer Gaseley (ph) our pan-European team worked closely with French, German and Belgian capital markets teams to advise on the sale of the portfolio of nine prime logistics warehouses spread across Germany, France and Belgium. That transaction represented the largest ever pan-European logistics deal.

In addition, Jones Lang LaSalle hotels continued to expand its leadership position in global hotel transactions. We had previously announced to you the sale of the intercontinental hotel group UK portfolio, which was a portfolio of 73 hotels and a record-breaking one million pound transaction. More recently, we also advised IHG (ph) on the disposition of a ten prophecy portfolio in Australia, New Zealand and Fiji. In the U.S. our hotels team arranged for the sale of two major assets in Chicago, the $230 million disposition of the Palmer House Hilton on behalf of Hilton Hotels Corporation and the a $155 million sale of Fairmount Chicago for the suite company. Those transactions were respectively the largest and third-largest hotel sales in Chicago history.

At La Salle Investment Management our global money management business, we set new records for both total capital raised and total capital invested. More than $2.5 billion of equity has been raised for five new funds so far this year, and that includes new separate accounts and co-mingled funds around the world. In turn, La Salle's teams have invested over $5 billion capital for our clients in more than 100 individual transactions spanning the world. New product launches for LaSalle include a German retail venture, a joint venture between LaSalle Investment Company and the British Columbia Investment Management Corp., a major Canadian institution investor. The fund will invest EUR450 million in high yielding assets and indeed we have already secured or have under due diligence approximately EUR250 million worth of assets.

Capitalizing on the growing appetite for investing in nondomestic real estate, we have also recorded great success in our global securities business. As an example of this, we have formed partnership with Skandia Investment Management UK to establish and run the global real estate securities open-ended fund.

Our fifth strategic priority is to develop our world standard infrastructure. And to gain momentum and benefit for our other priorities we simply have to have superior operating and support procedures and processes to service our clients and support our people. In that regard, our global consolidation and standardization of finance and HR systems is proceeding on schedule and a very tight and ambitious schedule it is, too.

We are also developing and introducing a range of client facing IT tools and systems. Examples of that include a dashboard tool that consolidates information from multiple systems to track performances of all aspects of a client's real estate portfolio and a first of its type global system that receives, processes and pays real estate related invoices for global clients active in markets around the world.

So to sum this quarter up, we are very pleased with the strong results that our people have generated in the third quarter and indeed throughout the year so far. At the same time we must not forget that successful 2005 demands a successful fourth quarter from all of us. And I would like to thank at this point all of my colleagues for their contributions this year. Together we will continue to focus on our clients and serving a comprehensive real estate service and investment needs on a daily basis for the remainder of this year. So at that point we would like to hold our commentary and take your questions. So operator, would you please explain the process?

(OPERATOR INSTRUCTIONS) Matt Ostrower, Morgan Stanley.

Last quarter I think you guys gave guidance of 240 for the year. Is there some reason why you haven't -- at least as far as I could tell you didn't reiterate that guidance?

Matt, as you know, we gave guidance, but it didn't seem to be what the market thought we were going to do anyhow. We have determined that it is probably best to go back to our not providing guidance, and we will continue to explain the trends in the business. And pretty much you and all the rest of it the analysts and the investors are determining how that fits in the total picture.

Can you give us some sense? I know you spoke in some general terms, but we are a third of the way through the fourth quarter, surely you have some sort of sense of how things are going to end up. Can you give us any sense at all about you sort of did (indiscernible) 30% plus growth in the third quarter. Is there any sense for what kind of growth we should expect in the fourth quarter?

If you will recall, the fourth quarter of last year had some significant events in it with LaSalle Investment Management, which we did highlight at the end of last year. So I think if you will look at the momentum of the business and look at the things that we previously highlighted as lumpy incomes that can occur at any time, and evaluate those separate from the base fundamentals of the business. The base fundamentals of the business continue to perform very well across the board, and we are quite pleased with them. We remain confident in our performance this year and next. But feel it continues to be inappropriate to give guidance because it is a pretty lumpy picture, as you can tell, even from some of the incentive fees we have this quarter.

Yes, I guess on that topic you generated I think this was the best incentive fee results at least I got in my model going back. And then also the capital markets activity in the U.S. seems very strong. Can you just comment about sort of are those -- should we look at those as sort of acceleration of things that might have otherwise happened in the fourth quarter? And would those activities be expected to drop off or the contributions you expect it to drop off in the fourth quarter?

Let me break them in two pieces. LaSalle Investment Management -- and we did discuss in last quarter's call that we expected strong incentive fees in both the third and the fourth quarter. Clearly we had them in the third quarter. We continue to liquidate two funds, both of which, which I highlighted the income and growth 2 and the medical office, both of which are performing at very strongly against the target 2 investors and therefore resulting in significant incentive fees for the firm. And we will continue to liquidate those into the fourth quarter. So we feel very good that LaSalle Investment Management is performing both in terms of asset growth, annuity income, but also being able to deliver strong incentive fees.

We have not had the level of equity gain this year that we had last year. And that will probably continue to be not as robust as last year, but we've made up those differences between acquisition fees and incentive fees. So we feel good about LaSalle Investment Management. The capital markets business in the U.S. is performing very well. It is not as large as our capital markets business, either in Europe or Asia-Pacific, both who are performing strongly. So we expect them to continue throughout the year. It's just when we do the math it is off of a lower base than you would find, for example, in our pan-European operations.

And Matt, you'll recall that we talked this year about strategic investments in sections of our business and the U.S. capital markets operation was one in which we determined at the beginning of the year to make some significant investments. Those have been made, and you see the results beginning to come through.

Okay, great. And you may have mentioned and if I missed it I apologize -- on the infrastructure spending, did you give an indication for how long you expect that to continue?

We have a three-year plan which we have developed and as we said previously, Lauralee is leading that with a group of Chief Operating Officers we have in regions and product areas around the world. As we said in the commentary today, we are on track with that very ambitious plan. But it will continue over the next two calendar years.

I heard that part, but should I assume that sort of the thing you laid out for the year, is that something that you would expect to be sort of consistent over that three-year period?

Well, we mentioned a number of $12 million which covered investment not only in infrastructure, but in other strategic projects to develop our five priorities. We would expect going forward to continue to invest in the -- both the infrastructure and the strategic development of the business. And those are revenue investments, as we've noted. The level we invest at we haven't yet determined. We're going through that annual budgeting and review process at this point. But I would be surprised if we were to spend less next year.

Okay, great. Thank you.

Joel Gomberg with William Blair.

Could you expand a little bit, Lauralee, on the slowdown in tenant rep in the Americas division? And then given some of the timing of transactions I guess what you are saying is LaSalle Investment Management third quarter was a lot stronger. But Asia probably expect a better fourth quarter given some delay in transactions?

First of all, on the tenant representation, we have in excess of 50 alliance clients. And what we have been done very successfully is take those alliance clients and take them from one piece of business into multiple pieces of business. However, we are seeing two things with the corporates. Number one, they are not doing necessarily as large of transactions as we did last year. We're doing a lot of work for them, but a lot of smaller transactions. And they continue to be very savvy about their space. We are a leader in the workplace planning that goes on for a lot of corporates where we help them design how to put more people more efficiently in smaller space. There's no question that corporates are focused on costs. So in total our corporate solutions product offering revenues are up, but the mix is changing, and again, I think it is that consultative approach that we take to our clients. And at the moment that means that we are doing smarter things for them in one place, and that is reducing some of the transactional activity in tenant rep.

Asia, we had a number of significant transactions. One of our largest fees that we've ever earned in Japan slipped into the first week of the fourth quarter. So we are anticipating that Asia will have a trend that was a year-over-year trend that we were on and will stay there. Feel very good about the region. China, India, Japan are all robustly growing. But even the markets that we call our more core markets, Australia and Hong Kong, are having outstanding years. And your last question was LaSalle Investment Management, and I lost the question, Joel.

More had to do with timing going into the fourth quarter assuming that third quarter wasn't stronger than normal and that fourth quarter will tail off, I guess.

No. Actually we think fourth quarter will be a very strong quarter for LaSalle Investment Management. It is subject to the fact that that performance is based on closings of sales in funds that are liquidating. So if those transactions get closed in the fourth quarter, we can have a very strong incentive fee quarter, not necessarily as strong as an equity earnings quarter, but a strong incentive fee quarter.

Joel, to answer a little bit on the tenant representation question in the U.S., we've actually had a very high rate of success on new business pitches in which we participated this year. And the total client base in terms of numbers and size of businesses which we represent is actually up year on year. So the comments we made about the following business year on year is just down to the trends that Lauralee discussed in the activity of our larger clients. And we believe that that is a phenomenon which is for this year and doesn't necessarily represent an ongoing picture.

That's helpful. And then finally, as you look back the Procter & Gamble outsourcing relationship, could you maybe reflect on that, whether it is meeting your hurdles in terms of profitability and what you set out given the size? And then what do you see in that marketplace in terms of outsourcing to that extent?

Well, let's talk about the relationship in a general sense. It continues to be very strong and very healthy. We continue to work together, and indeed occasionally work together in a PR sense, as well. We have been talking to them actively about the integration work around their new acquisitions, both the Wella acquisition from '04 in Germany, and more recent work they are doing merging the Gillette organization into Procter & Gamble. So the relationship continues to be strong, and it continues to develop and to expand. We have invested behind technology for our clients on a worldwide basis. But that technology has been very useful specifically for the Procter & Gamble relationship, and that has been around that payment system which we described in our commentary earlier on. So a healthy relationship, growing healthily and financially we are meeting the requirements which we laid of the relationship early on.

Thank you.

(OPERATOR INSTRUCTIONS) Will Marks, JMP Securities.

Good morning, Colin and Lauralee. A couple of questions. One just on guidance and I fully understand what you're talking about. I think last quarter you had guided to full year. It concurred with the Street at 240 and before (indiscernible) the Street was at something like 368, so it's probably a little frustrating that we tend to get so far ahead of you. But I am wondering on a long-term basis, and Trammell Crow has mentioned a 20% EPS growth rate. CB has said 7 to 9% top line turning into high teens to low 20% earnings, 12 to 14% EBITDA. Can you just give us some indication how you look at your business long-term? Is high single digit top line achievable? Is 20% bottom line achievable over the next three to five years?

I think for all of us in the industry top line is very much dependent upon the environment for real estate services. And it has been very strong for the last couple years. And we've all benefited from that. And the key is, which we focused on, is that we translate that revenue into profit growth. For shareholders and investment dollars that we can invest for the future. I think we've done that very successfully. I would say that whatever revenue growth our competitors are going to achieve, we are going to achieve that or more because we have a market share position that we enjoy. And are going to expand on that. And again, off of that revenue growth I think we are very good at achieving the right level of margins focused on profitable business.

For me to predict or for us to predict what the environment is going to be for real estate around the globe consistently and say it's always going to be up, I think we've all been through cycles and know that's not true. But again, I would say if you look at the fundamentals we can fall exactly in those same patterns with the economic forecasts that are out there. The benefit I believe that we have is that we are very global. And we all know that property markets move at different times. And it is our view that the most robust growth in the future is going to be in the money management business and in Asia-Pacific, which is where we've invested a lot of dollars.

On the other hand, we've got strong positions in Americas and Europe and have not forgotten those and have invested to maintain because more and more of our clients want the global delivery. So I think we have been building as much protection into our product offerings through annuity revenues, advisory fees for LaSalle Investment Management, through facility management, which is a bond type characteristic revenue for the firm, putting more robustness into our property management capability, particularly in Asia where it is very predictable and high margin. Such that we can take advantage of when the markets are strong, giving all the robustness, the performance of implementation fees and when the markets slow, having as much protection as possible to have still a solid economic performance.

That was very helpful. Thanks. A couple of other questions. In my endless effort to understand facility management as a business, I know it crosses several lines, can you maybe take an example about 800,000 square foot contract in Japan, and tell us what you're doing for I guess it was Citibank, Citigroup?

Citigroup handling the -- if you take it from one end to the other, moving them into new facilities and moving them out of new facilities in terms of negotiation of the leases, and the financial aspects of those deals with property owners, we're setting them up into new facilities. We are organizing the interiors, rebuilding interiors on a project management basis, we're managing the leases on an ongoing basis, and we are providing people to do the physical management of the interiors of the buildings. Again on an ongoing basis and handling the financial transactions around the ongoing management of the buildings.

Okay, great. And last question, just on investment management, can you just mention -- and maybe you this and I missed it, but you're up to 29 billion now, and what were -- or maybe year-to-date would be best of what are the inflows and outflows of money or is it hard to tell because some clients reinvest?

Without the net -- I think Lauralee will look up the exact numbers here -- we were up a net roughly 2 to $3 billion on the year. And from memory the purchases have been 5 to 6 and the sales have been 2 to 3.

And who are your largest clients and what percent of the 29 billion -- is anyone -- are you very exposed with one particular client at all?

No, we have been -- I mean the largest capital raise that we have done this year I think we've mentioned this to you before, was around one billion U.S. dollars. And it was raised for our Asian opportunity fund, too. And that was raised from a very broad base of investors. So an example of that fund raised from a worldwide variety of investors. Our Canadian fund, our German retail fund, our French office fund, similar stories. So it is a very broad base of investors. We have, as you know, an ongoing and very deep relationship with CalPERS in the U.S. But that is not one to which we are overly exposed. We've been moving the business increasingly towards co-mingled funds and away from single mandates over the period of time. And we've been developing, too, our open-end funds distributed through partners in some cases to the public.

Great. Okay. Thank you very much.

There are no further questions. Are there any closing remarks?

Operator, thank you very much. Since there are no further questions, let's conclude the call today by thanking you all for your participation on the call and for your continued interest in our Company. We look forward to meeting with you again following the fourth quarter. Goodbye, everybody.

This concludes today's Jones Lang LaSalle Inc. conference. You may now disconnect.