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Jones Lang Lasalle Inc (NYSE:JLL)
Q4 2019 Earnings Call
Feb 11, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. At this time, I would like to welcome everyone to the Jones Lang LaSalle Incorporated Fourth Quarter Earnings Conference Call. For your information, this conference call is being recorded. [Operator Instructions] Thank you.

I would now like to turn the conference over to Chris Stent, Executive Managing Director of Investor Relations. Please go ahead.

Chris Stent -- Executive Managing Director of Investor Relations

Thank you, and good morning. Welcome to our fourth quarter 2019 conference call for Jones Lang LaSalle Incorporated. Earlier this morning, we issued our earnings release which is available on the Investor Relations section of our website, along with the slide presentation intended to supplement our prepared remarks. Please visit ir.jll.com.

During the call, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures to GAAP in our earnings release and supplemental slides. As a reminder, today's call is being webcast live and recorded. The transcript of this conference call will also be posted on our website.

Any statements made about future results and performance, plans, expectations and objectives are forward-looking statements. Actual results and performance may differ from those forward-looking statements as a result of factors discussed in the annual report on Form 10-K of the fiscal year ended December 31, 2019, and in other reports filed with the SEC. The company disclaims any undertaking to publicly update or revise any forward-looking statements.

And with that, I would like to turn the call over to Christian Ulbrich, our President and Chief Executive Officer for opening remarks.

Christian Ulbrich -- President and Chief Executive Officer

Thank you, Chris. And welcome everyone to this review of our results for the full year and fourth quarter 2019. Stephanie Plaines, our CFO will share details of our financial performance following my introductory remarks.

2019 was a very exciting year for JLL, with significant achievements on our Beyond strategy capped off by strong financial performance. For the full year, we reached record adjusted EPS of $14.09, 16% growth over prior year in local currency. We delivered adjusted EBITDA of over $1.1 billion, representing 18% growth over 2018 and outpacing fee revenue growth of 12%. In the fourth quarter 2019, adjusted earnings per share was $6.35, 7% higher in local currency than in Q4 2018. Adjusted EBITDA was $494 million for the quarter, a 19% increase in local currency. These excellent results are product of strong Americas performance combined with robust contribution from LaSalle Investment Management.

To put our performance into context, real estate fundamentals remain strong amid a cautious global environment. GDP growth is lending at 2.6% for the year. Slide 2 in our supplemental slides show overall real estate market activity. Global investment volumes achieved a record year, with a total of $800 billion, up 4% over 2018. Rising allocations to real estate, healthy supply and demand fundamentals, and low interest rates continue to support a robust global real estate investment environment. Leasing volumes remained healthy for the year, down 5% from a record of 2018, but still above historical averages. The global office vacancy rate of 10.7% remains near historic lows and leasing fundamentals remain favorable.

Reflecting on 2019, we continue to execute against our Beyond strategy with notable achievements and at the same time delivered our financial targets we set for the year. We generated organic revenue growth of 6% in our Real Estate Services business. Adjusted EBITDA margin of 15.6% as reported and digital revenues of well over $100 million, all while simultaneously executing and integrating our largest acquisition to date. This performance puts us solidly on the path to achieving our 2025 targets.

Completion of the HFF acquisition marks a transformational action in delivering on our Beyond strategy of doubling our capital markets revenue. The strategic combination will continue to accelerate the growth and differentiation of our full service capital markets offer globally, providing our clients with seamless expertise and all aspects of the investment process. The acquisition firmly established JLL as one of the top two commercial real estate firms by US investment sales activity according to Real Capital Analytics and created a market leading debt and equity or origination platform.

We are overall very pleased with the integration progress and realization of synergies, that definitely we'll discuss in more detail in just a couple of moments. Broker attrition has been higher than anticipated, we underestimated the opportunity for cross-selling with other service lines. Therefore, we remain confident that those cross-selling opportunities will more than offset any short-term impact due to broker losses. Illustrating the power of the combined platform, we had several transactions in the first six months were JLL was awarded the mandate for not only the sale and financing, but the leasing assignment as well.

Additionally, we announced the formation of JLL Technologies in 2019. JLL Technologies brings together all of JLL's technology products and services to help our clients tap into our digital expertise, rich data pool, and vast resources to navigate key real estate needs. It's a clear differentiator that will enhance future market share gains and revenue growth, while driving margin expansion opportunities for JLL.

In summary, I'm very pleased with our performance this year and I'm confident our team will continue to execute and deliver in 2020.

With that, I will turn the call over to Stephanie, who will discuss our results in more detail.

Stephanie Plaines -- Global Chief Financial Officer

Thank you, Christian, and welcome to everyone on our call. I'm pleased to report that JLL delivered record full year results across fee revenue, adjusted EBITDA and adjusted earnings per share, driven by solid Real Estate Services organic growth, contributions from the acquired HFF business and exceptional results from LaSalle.

Before I get into more specifics, a quick reminder that we report percentage changes in local currency, unless otherwise noted.

For the year, consolidated revenue totaled $18 billion, and consolidated fee revenue reached $7.1 billion, each representing 12% growth against 2018. As Christian noted, our full-year 2019 adjusted EBITDA surpassed the $1 billion mark for the first time coming in at $1.1 billion. This represents a tremendous accomplishment, made possible by our 93,000 JLL employees around the world. Real Estate Services fee revenue increased 13% for the year and was balanced between organic growth and contributions from recent acquisitions. Organic growth of 6% was broad based, with the most notable increases in leasing and project and development services. New client wins and expansion of mandates with Corporate Solutions clients generated 7% growth in our outsourcing business.

Fourth quarter fee revenue growth of 13% was led by the Americas, which benefited from the HFF acquisition and strong results in both growth project and development services, and advisory and consulting across all geographic segments.

Our LaSalle business had an exceptional quarter, achieving nearly 30% advisory fee growth combined with significant incentive fees. A record top line results converted well to an impressive adjusted EBITDA margin of 20.8% in Q4 and 15.6% for the year, which was near the top of the 14% to 16% target range we provided to you last quarter. For the year, the 90 basis point net expansion reflected contributions primarily from organic RES growth and HFF, combined with investments in growth initiatives including client-facing technology. Please refer to Slide 5 of our supplemental slides for further details.

Turning to our balance sheet. Net debt was $861 million, an increase from a year ago reflecting cash outflows to acquire HFF, partially offset by fourth quarter debt repayment. Cash flow from operations totaled $735 million for the quarter, of which approximately 80% was utilized for debt repayment, consistent with our cash use priorities previously communicated. We finished the year well positioned with net debt to adjusted EBITDA of 0.8 times, a decline from 1.4 times in the third quarter. We did not repurchase any shares during the fourth quarter. As we move to 2020, we will continue to prioritize debt repayment and remain committed to maintaining an investment grade balance sheet.

For the year, cash flow from operations was $484 million, representing approximately 70% of adjusted net income. Compared to 2018, cash flow from operations declined by $120 million, primarily due to HFF integration and acquisition charges and higher tax payments in previous years.

Moving to our segment results. Americas fee revenue increased 22% for both the fourth quarter and full-year, with growth achieved across all our service lines. Excluding 2019 M&A contributions, fee revenue improved 3% for the quarter and 9% for the year. For the quarter, growth was led by both project and development services and advisory and consulting, which speaks to JLL's ability to offer diversified strategic services to our clients.

Our Leasing business achieved strong full-year growth across all major asset classes with increased average deal size. Leasing fee revenue was relatively flat this quarter, reflecting resilience against a double digit decline in office market growth absorption and a steep prior-year comparable of 35%. On a full-year basis leasing led the 9% organic growth achieved in the Americas.

Capital Markets fee revenue more than doubled in the fourth quarter, as a result of combining our legacy business with HFF. For the fourth quarter, HFF contributed fee revenue of $209 million and since the July 1 acquisition, $395 million. As Christian noted, the HFF integration is going well. We are encouraged by the strong first six months performance. We made good progress identifying and realizing a portion of the synergies and are on track to achieve our stated targeted annual run rate EBITDA synergies of $28 million in the first 12 months and $60 million over two years to three years. For 2019, we met our goal of generating $10 million in synergies, primarily through cost reductions. Savings were generated through office combinations and by eliminating duplicative research, marketing and public company costs. Last month, we successfully completed the transition of HFF financial and HR system, resulting in unified platform.

Americas adjusted EBITDA margin was an impressive 22.6% for the quarter and 18.4% for the year, an improvement versus the prior year of 330 basis points and 210 basis points respectively. Margin expansion for the year was evenly balanced between positive organic gains and accretion related to the contribution from HFF. It's worth highlighting that the Americas has more than doubled full-year adjusted EBITDA since 2016.

Turning to EMEA. Fee revenue results for both the quarter and the full-year were largely in line with 2018. For the year growth from property and facility management, project and development services, and advisory and consultancy, largely offset lower transactional activity, particularly in the UK and Germany. Noteworthy during the fourth quarter was the divestiture of our property management businesses in Continental Europe, which impacted our revenue results. Leasing fee revenue declined 5% for both the quarter and the year. Capital markets fee revenue declined 7% for the quarter and 8% for the year for the year. For the year, France and Spain showed the most significant growth. Adjusted EBITDA margin was 13.7% for the quarter and 5.4% for the year, a decrease against 2018 of 450 basis points and 230 basis points respectively. The decrease was largely driven by a notable decline in higher margin transactional fee revenue, particularly in Capital Markets. EMEA leadership team remains very focused on cost management initiatives and driving profitability.

Moving to Asia-Pacific. Performance continues to be positive. Fee revenue increased 2% in Q4 and 6% for the year. Capital Markets fee revenue increased 50% for the quarter and 24% for the year compared with 2018. For the quarter, growth was broad based across all markets and most notable in Japan and Singapore, partially offsetting was the decline in leasing of 15% for the quarter, which reflected slowing market conditions amid geopolitical tensions and following a strong prior-year quarter. For the year, office market gross absorption was down 12%, driven by a combination of economic uncertainty and the impact of continued tight vacancy conditions. Geographically across all service lines, India, Japan and Australia led full-year APAC revenue growth, with offsets from Greater China. Adjusted EBITDA margin expanded to 21.7% for the quarter and 14.3% for the full-year, an improvement against 2018 of 40 basis points and 110 basis points, respectively. The expansion reflected positive service mix from organic growth in Capital Markets as well as continued cost management initiatives.

Turning to our Investment Management business. LaSalle's fee revenue rose 23% for the quarter and was well balanced between incentive and annuity fee growth. Advisory fees, which serve as an annuity measure to the underlying health of our Investment Management business, grew an impressive 27% for the quarter and 21% for the year. Gains were driven by successful capital raising and deployment of LaSalle's margin accretive four open-end funds across the globe. LaSalle raised $2.7 billion for the quarter, bringing the full-year to $8 billion of capital raised. Just under 50% of the new capital raise represented cross border flows.

As noted in our remarks last quarter, we had a few sizable transactions in the pipeline, among them a significant deal in Japan that successfully closed in December, driving incentive fees to $80 million for the quarter and $138 million for the year. Equity earnings for the quarter totaled $3 million and $33 million for the year, largely attributable to fair value adjustments for LaSalle managed publicly traded Japanese REIT. LaSalle's adjusted EBITDA margin was 30% for the quarter and full-year, a strong 490 basis point improvement in Q4. For the quarter, LaSalle benefited from record annuity margins, higher equity earnings, and incentive fee growth although on a full-year basis, incentive fees declined against a record 2018. LaSalle's assets under management totaled $67.6 billion, demonstrating continued strong capital raising efforts and momentum and scalable high margin products.

To summarize, our outstanding 2019 results reflected the strength of our geographically diversified presence along with benefits from the transformational HFF acquisition. Our focus on growth investments, digital innovation, and operational rigor, delivered through our leading integrated global platform positions us well for strong future performance.

Consistent with our 2025 Beyond strategy, in 2020 we expect 6% to 8% organic fee revenue growth in our Real Estate Services business and consolidated adjusted EBITDA margin in the 14% to 16% range.

And now back to Christian for closing remarks. Christian?

Christian Ulbrich -- President and Chief Executive Officer

Thank you, Stephanie. Looking at the 2020 market outlook. Economic and geopolitical uncertainty will continue to impact the global economy with GDP forecasted to moderate by 10 basis points to 2.5%. Most economists forecast the risk of recession to remain low, any impact from the coronavirus needs to be seen.

JLL research outlook for commercial real estate global investment volumes remains elevated, driven by the long-term trend of rising asset allocation in the sector. However research forecast reflects a moderation in those volumes from the record levels seen in 2019. Investors conviction in the performance of the real estate sector remain strong and is supported by robust supply and demand fundamentals in many global markets and healthy spreads to risk free rate.

On leasing, office demand is forecasted to moderate, but remain at a healthy level. In some markets, activity will be constrained by a lack of available space. We remain convinced in our ability to grow our business in this environment, and in 2020 to deliver results consistent with our 2025 long-term growth targets as Stephanie previously mentioned. We remain mindful of our role within the broader context of corporate citizenship. We are very pleased to see that the responsibility of the global corporates and the role businesses have to play more generally has gained tremendous momentum. This responsibility is a critical part of our Beyond strategy and we are very focused on delivering a sustainable future for all of our stakeholders. On the back of our long-standing values, we have rephrased and shorten JLL's purpose to reshape the future of real estate for better world. This helps to explain not what we do, but why we do it and serves as a guiding principle that unites our entire organization. Mitigating climate change and limiting our carbon footprint in line with the aims of the Paris climate agreement is one element of it.

We formed our Global Sustainability Report in 2012 and started to run a major global sustainability campaign in 2015, under the headline of building a better tomorrow. Having achieved our current round of environmental targets well ahead of schedule, we are setting new science based targets. In line with those efforts, we joined the World Economic Forum's Alliance of CEO Climate Leaders. I met recently with this group of fellow business leaders in Davos to discuss global efforts to reach net zero carbon emissions by 2050 and set initiatives in advance of the 2020 United Nations Climate Change COP26 that will be held in the UK in November.

Also at Davos, JLL was unveiled as one of the five founding partners in the launch of Bloomberg Green, a major multi-platform global initiative focused on climate change news, analysis and solutions. We believe it is essential for the business community to pool knowledge, resources, and best practices to help address the management and mitigation of climate change damaging emission. Our involvement in Bloomberg Green is an example of JLL working with other leading global businesses to address climate change. JLL will play a full and energetic part consistent with our core commitment to shaping the future of real estate for better world.

Finally, we are delighted that JLL has again been included on Fortune's annual list of the World's Most Admired Companies, which was announced last month.

To close these prepared remarks, I would like to recognize and thank all of our people around the world for continuing to serve our clients, and shareholders, and JLL, so well. In particular, I would like to recognize Trish Maxson, our Chief Administrative Officer and Global Executive Board Member for her incredible work at JLL. She recently announced her decision to retire at the end of March after an impressive and wide ranging career. She has played a key role at JLL in the development of the Beyond strategic vision, sustainability ambition, and the execution of our transformation program as well as being a trusted advisor to the Board of Directors and to me personally. Thank you Trish, for your contribution to JLL over the past eight years and wishing you the very best on the next chapter.

Now, let's take your questions. Operator, please explain the Q&A process.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from Anthony Paolone from JP Morgan. Your line is open.

Anthony Paolone -- JP Morgan -- Analyst

Thank you and good morning. So I was wondering if we could start on Asia-Pacific. How should we think about, say at least the next couple of quarters given the geopolitical disruption in Hong Kong and the virus, like how do we think about that in your broader growth forecast for 2020?

Christian Ulbrich -- President and Chief Executive Officer

It's Christian here. I think it's too early to really call on that. We are right at the start of situation, which is very hard to read from the outside. When we look back to the [Indecipherable] bureaus, the markets rebounded very, very quickly at the time. So it didn't really impacted the longer-term performance in that year in the real estate markets, but we don't know whether we have a comparable situation to SARS virus or whether it is different. And so for the time being as a bit of a pause in the market, our people are working from home as most companies keep their people at home. But we will come back to that topic after the first quarter.

Stephanie Plaines -- Global Chief Financial Officer

I'd add a bit to Christian's remarks. A reminder, our business in Asia-Pacific is well diversified. So we've -- more than 50% of the business is annuity based. So as we're probably seeing the largest impacts happen in the transactional side, short term, on the capital Markets on the leasing, but we're pretty balanced there and China represents a little less than -- less 5% of our total fee revenue across the globe.

Anthony Paolone -- JP Morgan -- Analyst

Okay. And on -- just another follow-up on Asia. I think you mentioned properties and facilities management in the annuity fee stream, I think that was impacted I think by some contract timing in the fourth quarter, does that self-correct in 1Q or 2Q or do you have some tough comps for a couple of quarters there?

Stephanie Plaines -- Global Chief Financial Officer

Yeah, that is a timing issue on that one, you're exactly right, Tony. So that should self-correct in 2020 on that one.

Anthony Paolone -- JP Morgan -- Analyst

Okay. And then more broadly, you mentioned the 14% to 16% margins for Real Estate Services component. I don't have all the data in front of me to make that comparison precisely with 2019. Can you maybe just talk about some of the puts and takes that we should expect in 2020?

Stephanie Plaines -- Global Chief Financial Officer

Sure. And just a clarification on that, the 14% to 16% is our total JLL and not just RES. So obviously with 15.6% that we had this year, the kind of puts and takes would be obviously, we're really pleased with the LaSalle performance that's influencing that number, it's our second highest on record performance. So we would not expect -- obviously that would be something that was easily repeated as we head into 2020. So that will represent obviously a detraction from the margin expansion year-on-year. And I think as you heard in our prepared remarks, the Leasing business, particularly in the US, we've been going double digit consecutively growth for the past five quarters. So while we're very enthusiastic about 2020 on that, that's also something that is -- that is hard to repeat and you see that also in our Q4 results in Leasing. So those are the things that are weighing in that mix that would still keep us very comfortable in that 14% to 16% range, if you will for 2020.

Anthony Paolone -- JP Morgan -- Analyst

Okay. You had I think it was 35 basis points of drag from just growth initiatives in 2019, will there be more of those or does that flip the other way or how does that work?

Stephanie Plaines -- Global Chief Financial Officer

Sure. So it doesn't flip the other way. I think what's notable in 2019, we've talked about on previous calls, is our investment in our platform ERP systems. We're cycling that now. So you're seeing a little less spend on the technology investments that's just a function of not repeating those investments. So we would expect going forward to have about a 50%/50% balance in tech and non-tech spend going forward largely will vary a little bit year-on-year.

And then with the cash flows. I think you saw us report, we're heavily investing obviously organically back into the business. So we will keep our foot on the gas with priority investment.

Anthony Paolone -- JP Morgan -- Analyst

Okay, great. Thank you.

Stephanie Plaines -- Global Chief Financial Officer

Thank you.

Operator

Your next question comes from Jade Rahmani from KBW. Your line is open.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Thanks very much. Just wanted to confirm regarding your guidance, what the fee revenue baseline for Real Estate Services is on which you're projecting 6% to 8% growth. Should we take the consolidated summary for Real Estate Services of $6.636 [Phonetic] billion and just multiply that by one plus 6% and 8% respectively, which should be a range of $7.0 billion to $7.2 billion for Real Estate Services fee revenue or should we take the reported results for 2019 and subtract HFF and grow that by 6% to 8%?

Stephanie Plaines -- Global Chief Financial Officer

Yeah, so hi Jade. I would definitely use the former. So that 6% to 8% is organic constant currency, just as a reminder, so we're 6.3. So we're saying that, that is the base and that we intend to stay within that range as our target operating for top line growth RES. So that's the way that I would approach it.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Okay. So the first set of numbers I had mentioned is what you're referring to?

Stephanie Plaines -- Global Chief Financial Officer

Yeah, exactly Jade.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Okay. I was wondering, can you just give some commentary around deal pipelines and how they're shaping up? There has been a lot of news with respect to co-working, there's also -- I'm starting to hear the way VC fund investments are managing their -- their capital spend, their budgets, I feel like there is a pullback brewing. I have also heard some anecdotes about sublease space in certain markets picking up. So would like to get some sense of overall deal pipelines and if there are any areas of concern, with respect to either co-working or VC funded tech companies?

Christian Ulbrich -- President and Chief Executive Officer

Well, as you heard from our ambitions to grow in 2020 6% to 8% top line revenue, deal pipeline is continued to be seen very strong. The dry powder on the Capital Markets front is at a record high and there is a lot of money waiting to get into that asset class and so despite the very strong comps of the last two years, we expect volumes to be about in line with the previous years on the Capital Market side.

On the Leasing side, the picture is slightly more mixed. The US and most markets will continue to be very strong, deal pipeline is very strong. And so we expect that we will see a very nice performance there. Not disregarding Stephanie's earlier comments that we had very, very tough -- we have very, very tough comps, but still about on that level.

In EMEA, it is a bit more market by market. In some markets, it's actually -- the supply side, which is not available to the extent where we could fill it by demand. And so we expect volumes there to be slightly lower than in the previous year, but still very healthy demand.

And so, the only area of concern for us for the time being is actually indeed Greater China and the wider impact of the current situation there, especially in the first quarter. As I said earlier, it's too early to make a call for the whole year. But overall we are quite confident with regards to deal pipeline on the transactional side.

And then your specific question around co-working, we obviously saw a decline in that in the fourth quarter. It was about 4% of our Leasing revenues for JLL. We expect that number to go slightly down. Although the demand from occupiers for flex space continue to grow, but obviously the way we are doing revenues with flex space provider is -- as well -- or the providers we work for them as well as we work for the occupier. Occupier side will continue to grow the flex based providers themselves are slightly more muted in their gross pipeline at the moment.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

In terms of the leasing outlook, overall in the first and second quarters of last year you had double digit growth. I think It was up close to 20% for the first quarter, nearly 13% in the second quarter, should we be projecting positive growth in the leasing business overall and the comps are even tougher in Americas or is it reasonable to expect there would be declines on a year-over-year basis?

Christian Ulbrich -- President and Chief Executive Officer

Well, we always plan for growth. We are a growth company and we have shown in the past that we are excellent in taking market share and that is our expectation for 2020 as well. I think we won't see the same type of growth in the Americas, what we have seen over the last couple of quarters, but I'm still very confident that we will see growth. We probably will see as the comparison is slightly easier for us -- we probably see more growth in EMEA. And as I said, we are slightly more concerned around the outlook for Asia-Pacific, not down to JLL, but down to the overall at the moment very uncertain market environment.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Okay. Turning to HFF, is retention of key producers tracking close to your expectations? And are there any early in the year performance compensation payouts that we should be aware of that could impact the purchase?

Christian Ulbrich -- President and Chief Executive Officer

Well, first and foremost, we are incredibly pleased how that integration has been going so far. And as we said in our prepared remarks, we had a slightly higher broker attrition rate than we forecasted before we merged the two companies. But as we also said in our prepared remarks, what we underestimated is our opportunity to take benefit of cross-selling between the different service lines. And so over a slightly longer period, we are absolutely convinced that the loss of revenues, which we will have from broker departure, will be more than offset by those cross selling opportunities. HFF as our legacy business, has shown in the past an enormous resilience and the ability to grow in every market environment. So you will see -- see a more than confident that we are looking forward to a great year from those two merged service lines.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

And in terms of the, the timing of compensation, are there any large payouts early in the year to take place?

Christian Ulbrich -- President and Chief Executive Officer

No, we are very relaxed with regard to the question whether there will be more broker attrition. Every kind of tough decisions behind us with regards to that merger. It is business as usual now, people are all fired up to demonstrate great services to our clients in 2020.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Okay, thanks. Just the last one. I appreciate the comments you made about corporate governance and climate change with the initiatives the company is doing to address that. On the revenue side, is there -- are you thinking about developing or do you currently have advisory consulting services around building owners initiatives to address sustainability and building resiliency? Is this a meaningful revenue opportunity for a company, an integrated full service company like JLL?

Christian Ulbrich -- President and Chief Executive Officer

Well, a company which delivers $18 billion of revenues meaningful is a big word. But it is a very important area for us, it's because it is the right thing to do. And we already bought into a sustainability advisory business back in 2008 in the UK and that business has been growing very fast since then. For the last couple of years, we are trying to expand that to a global business and we have hundreds of experts around that topic who're advising our clients. And yes, it will show very significant growth rates over the next couple of years. But before it will be meaningful within the benchmark of $18 billion it will take some time.

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Thank you very much.

Operator

Your next question comes from Stephen Sheldon from William Blair. Your line is open.

Stephen Sheldon -- William Blair & Co. -- Analyst

Thanks, good morning. Wanted to see if you could provide a little more detail on the slight pickup up in broker attrition, was that more in legacy JLL producer base or the HFF base? Any way to roughly quantify the impact as a percentage of producers and timing wise, I guess when did that start to pick up?

Christian Ulbrich -- President and Chief Executive Officer

It was about twice as high on the JLL legacy side than on the HFF side, which is not surprising as the HFF business, which came in is a very strong business with a very strong leadership and that was the reason why we were so keen to get together with them. It took place kind of over the course of the third quarter and I would say in the first 90 days to 120 days of coming together, it slowed down then in November-December that's why we believe that this is pretty much behind us. And we are not talking about any super disturbing numbers. You see the performance of our Capital Markets business, it's still very strong, though the attrition was slightly higher than we expected, I was still surprised about the revenue per producer because we would have thought that the revenue per producer would be slightly lower in the third quarter and the fourth quarter, but we were positively surprised. And so despite that attrition rate, the numbers are still very strong.

Stephen Sheldon -- William Blair & Co. -- Analyst

Got it. That's helpful. And then second is on -- one of the stand out items in the quarter was the Americas adjusted EBITDA margin, it sounds like roughly half of the margin expansion was driven by cost containment. So wanted to ask generally where you are in terms of driving more efficiency in the Americas operations? Is there still quite a bit of margin expansion potential for standardizing around from the platforms you pulled out as we look out over the next few years?

Christian Ulbrich -- President and Chief Executive Officer

Well one -- one element of driving growth into an organization like ours is really taking advantage of scale and our investment into the ERP platforms has been very much driven by that approach that we want to become more cost effective and it increase the overall productivity of our organization. And we are on a journey there and we have a couple of more years where we see opportunity to take costs out. So we are very optimistic with regards to becoming a more efficient organization going forward.

Stephen Sheldon -- William Blair & Co. -- Analyst

Thank you.

Operator

Your next question comes from Jason Weaver from Compass Point. Your line is open.

Jason P Weaver -- Compass Point Research and Trading -- Analyst

Hi, thanks and good morning. Stephanie, I was just going back to the EBITDA margins for a moment, given the 2019 momentum are you still expecting more mix shift away from the transactional business with that 14% to 16% outlook?

Stephanie Plaines -- Global Chief Financial Officer

Hi, Jason. So, no, I think for -- except for the LaSalle mix shift, I think we're pretty comfortable with how the business should shape in 2020, obviously it's early in the year. So it's not something that we give precise guidance on, but we're still expecting the Leasing business to perform well, Capital Markets were coming off of obviously a record volumes, but they are still expected to be strong. And as [Indecipherable], the combination of HFF in Americas legacy business should propel us there. I would say that our Corporate Solutions business is still continuing to really improve on their transformation, Christian referenced that. So we've brought in obviously a new leadership that organizes us as a vertical and we're very focused on product development in that area. So we will continue to see margin expansion come from the Corporate Solutions side of the house.

Jason P Weaver -- Compass Point Research and Trading -- Analyst

And just one further, given the incentive fees that you realized to LaSalle, would I take that to imply you're expecting a weaker pace of realizations coming into 2020?

Stephanie Plaines -- Global Chief Financial Officer

Yeah Jason, it's always very hard to predict the incentive fees. I think it's very fair this year, just to remind everyone we're down 36% versus the prior year and this is our second record. So I think it's reasonable to assume that those will be coming down, it's early days and I think we've committed last time to giving you all updates as soon as we get more precision into the year. But right now, I would assume that, that is not a level that we could repeat going into 2020.

Jason P Weaver -- Compass Point Research and Trading -- Analyst

Okay, thank you. And just one more. Finally, with your leverage down back below one turn, can you expand a bit on your capital return priorities, whether that's dividend or debt repayment or possible new acquisitions? And if so, in what areas?

Stephanie Plaines -- Global Chief Financial Officer

Yeah so, we're definitely very pleased with the cash flow results. We were able to pay down $600 million of about $850 million of the HFF debt, so -- within the first six months. So we'll continue to prioritize that debt repayment to extinguish that in the 2020 year. So that's a high priority for us. And then I think investing it back into the business with organic opportunities. So we'll probably get down to a level that looks something like we did in 2018, once we normalize in 2020. We did launch share repurchase program. So we -- we will evaluate that every quarter. We did not do any repurchases this quarter, but will continue also to keep that on the radar screen. And then we'll announce our plans for dividend later on in the course of the year.

Jason P Weaver -- Compass Point Research and Trading -- Analyst

Okay, thank you.

Operator

Your next question comes from Michael Funk from Bank of America Securities. Your line is open.

Michael Funk -- Bank of America Securities -- Analyst

Hi, good morning. How are you doing? A couple if I -- a couple if I could. First, I know you mentioned that the EMEA growth had been hampered by supply not being there. Wonder if you can comment specifically on the UK market and to kind of what degree Brexit, Brexit uncertainty has maybe affected that market? And if you're seeing any change post vote or separation late last year?

And a follow-on one more there as well. Your guidance, I mean I appreciate that. Just wondering what kind of market share gains are implied in your guidance for 2020? Thank you very much.

Christian Ulbrich -- President and Chief Executive Officer

Well, specifically to the UK after the vote in December there was an immediate uptick in the business. So December came in significantly stronger than otherwise without that vote. For the time being, we expect UK to have a stronger year than it had in 2019, but what waits to be seen is how the conversations between the UK and Europe, well actually the EU, actually will go over the course of the year. So we have to see how the third quarter and the fourth quarter will play out.

Overall, we expect for JLL specifically, a much better performance in 2020 in our EMEA business than in our EMEA business 2019, which is less down to the market, but more down to all the decisions and activities we have been taking in 2019 to prepare ourselves for 2020. And so this is slightly independent of the overall market performance.

Michael Funk -- Bank of America Securities -- Analyst

Okay. And just one more if I could, please. You also mentioned that leasing in the US expectations based obviously on a tight market, any commentary maybe that tightness loosening up in specific markets in 2020? Expectations for more supply may be helping the leasing activity?

Christian Ulbrich -- President and Chief Executive Officer

Well, in the UK specifically the London market is very tight on new quality space, it's pretty much leased out and developers have been very disciplined with coming with new developments to market. Now sure enough with clarity on the political side, there will be more developments coming to market, but it takes a couple of years. So it's nothing, which will be kind of solved overnight and that situation with tight markets is pretty much true all across the mature economies in Europe. And so we expect rental levels to stay very high in Europe in comparison and a healthy market environment for landlords.

Michael Funk -- Bank of America Securities -- Analyst

So taking your comments from the call and into the question today you had there. I mean it sounds like on a multi-year outlook, I understand that you are not giving that guidance for the multi-year outlook, given relatively low cap rates, high occupancy right, leading the tight markets, it feels as if may be kind of flattish to marginally down is a good way to maybe think about the market in general and then you can kind of grow low to mid-single digits top line through market share gains, but is that kind of the market layout that we have right now?

Christian Ulbrich -- President and Chief Executive Officer

Yes, it's a way of describing it. I mean it's not only market share gains, it's -- we are coming with new products on our technology side. We've mentioned earlier sustainability and then specifically down to JLL, we will drive costs down and become more efficient platform and that will help us to drive profit growth going forward.

Michael Funk -- Bank of America Securities -- Analyst

Great, thank you for the time.

Stephanie Plaines -- Global Chief Financial Officer

Thank you, Michael. Welcome as well.

Michael Funk -- Bank of America Securities -- Analyst

Thank you very much.

Operator

Your next question comes from Jade Rahmani from KBW. Your line is open.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

Hi. This is Ryan Tomasello on for Jade. Thanks for taking the follow-up everyone. I'm not sure if Mihir or Yishai are on the call, but was wondering if you could provide an update on adoption of the technologies in JLL's Spark's portfolio by JLL clients? And how have those investments are performing overall? Would you say that those investments in the JLL Spark portfolio are performing in line with expectations?

Christian Ulbrich -- President and Chief Executive Officer

Yeah, we are incredibly pleased with the performance of JLL Technologies, which we have put together on October 1, where we brought all our technology within JLL together, whether it's platform technology, client-facing technology or our investments into the PropTech area. This is something where we see us as a real leader in our industry and a clear differentiator for our clients and the revenue growth, which we are experiencing from those products is very pleasing to us and we have high ambitions going forward on that topic.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

And can you give us an update on, I'm sorry, go ahead Stephanie.

Stephanie Plaines -- Global Chief Financial Officer

Yeah, just to echo on Christian. So we have -- reminder we've ring fenced $100 million to invest in real estate technologies. So through our Spark Funds and so we're progressing with those investments very, very well. And they are already starting to obviously be commercialized and beta tested within our own company and starting to do that with clients. So we're pleased with those developments and the leadership that Mihir and Yishai are bringing to that.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

And can you give us an update on how much of that $100 million has been invested so far and what areas of this PropTech ecosystem you think are areas where you think are most attractive uses of that capital going forward?

Christian Ulbrich -- President and Chief Executive Officer

We have invested roughly 40% so far of that money and the deal flow -- the deal pipeline is very strong and it's such a broad range of areas I think that would kind goes beyond this call here if we were to go into too much detail here, but we are looking at every type of product, which is helping our clients to be more successful with their real estate portfolios or investments that is kind of the key criteria is the technology, which helps our clients to be more successful with the real estate ventures.

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

Great. Thanks for that color and taking the follow-up.

Operator

There are no further questions at this time, I will now turn the call back over to management for closing remarks.

Christian Ulbrich -- President and Chief Executive Officer

Thank you. With no further questions coming in, we will close today's call. Thank you for participating. And Stephanie and I, look forward to speaking with you again following the first quarter.

Operator

[Operator Closing Remarks]

Duration: 45 minutes

Call participants:

Chris Stent -- Executive Managing Director of Investor Relations

Christian Ulbrich -- President and Chief Executive Officer

Stephanie Plaines -- Global Chief Financial Officer

Anthony Paolone -- JP Morgan -- Analyst

Jade J. Rahmani -- Keefe, Bruyette & Woods -- Analyst

Stephen Sheldon -- William Blair & Co. -- Analyst

Jason P Weaver -- Compass Point Research and Trading -- Analyst

Michael Funk -- Bank of America Securities -- Analyst

Ryan Tomasello -- Keefe, Bruyette & Woods -- Analyst

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