Welcome to Jones Lang LaSalle Incorporated’s First Quarter 2016 Earnings Conference Call. For your information this conference is being recorded. I would now like to turn the conference over to your host Grace Chang, Managing Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning and welcome to the first quarter 2016 earnings conference call for Jones Lang LaSalle Incorporated. As a reminder, today’s call is being recorded. A transcript will be posted in the Investor Relations section at jll.com. 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 fiscal year ended December 31, 2015 and in other reports filed with the SEC. The Company disclaims any undertaking to publicly update or revise any forward-looking statements. Now with that, I would like to turn the call over to Colin Dyer, Chief Executive Officer, for opening remarks.

Thank you, Grace. And welcome to everyone joining this review of our results for the first quarter of 2016. Christie Kelly, our CFO will review our financial results in detail in a few minutes. But to summarize our performance, we are pleased with the strong first quarter, which came despite a weak start to the year for global real estate markets. We saw record first quarter revenue across all three JLL geographic segments and at LaSalle. Gross revenue in local currency increased 14% to $1.3 billion compared with the first quarter a year-ago. Fee revenue rose 11% to $1.1 billion. Adjusted net income totaled $37 million for the quarter or $0.82 per share compared with $44 million or $0.97 per share in what was an exceptional first quarter of 2015. We continued to invest in future growth closing 11 acquisitions to date this year and our balance sheet remains strong, we increased our dividend to $0.31 per share. We are particularly pleased with these results because they came in a market environment which earlier in the quarter was anxious and unsettled. Financial market volatility, depressed lower prices and concerns about both the Chinese economy and the approaching Brexit vote in the UK, caused investors to hesitate and corporate tenants to hold back expansion and relocation plans. But as we predicted on our February call, this to be a pause, not a trend. Equity market started to rebound in mid-February, Chinese economy has stabilized and the slide in oil prices was arrested. While Brexit remains a concern for the UK we have seen real estate markets find more confidence in this more positive environment. The slides that we posted in the Investor Relations section of jll.com summarize current market conditions. Slide 2, shows the effects of the year’s slow start in global investment sales markets, which were down 14% compared to 2015’s record first quarter. JLL’s own investment sales volume, Tribeca down 3% by comparison. Yields in major office markets remain stable, indeed compressing by 4.8% down - compressing to 4.8% down 20 basis points from a year-ago. Leasing market volumes were down marginally for the quarter 1% lower than the first quarter of 2015. While JLL leasing revenues increased by 6% globally. The global office vacancy rate edged up slightly rising 20 basis points to 12.2% and prime office rents in 26 major markets increased by a healthy 4.5% year-on-year in the quarter. All of these fundamental trends led us to confidently restate the positive outlook that we described on our Q4 2015 call. So to discuss our performance in this market, I will turn the call over Christie.

Thank you, Colin, and welcome to everyone on our call. For the first quarter of this year I am pleased to report strong financial results for our Company. We delivered broad based revenue growth across all geographic regions in LaSalle and we generated solid adjusted operating income performance reflecting the strength of our global organization and market leadership. As Colin said, we finished the first quarter with reported consolidated revenue of $1.3 billion, up 14%, fee revenue of $1.1 billion, up 11% in local currency over last year, and adjusted earnings per share of $0.82. Adjusted operating income margin calculated on a fee revenue basis was 3.6% for the quarter at constant rate, a change of 180 basis points from prior year and 2.7%, up 90 basis points from the first quarter 2014. Adjusted EBITDA margin on a fee revenue basis decreased 150 basis points to 7.2% for the quarter from 2015 and up 100 basis points from the first quarter of 2014. The margin performance in comparison to the first quarter of last year primarily reflects the impact of changes in service mix between our transaction and annuity businesses. We experienced relatively lower growth in our capital markets business as the slow start to the year drove lower overall market volume. On the other hand, are annuity related businesses such as property and facility management and project and development services continued their positive momentum. This change in mix reflects the increasing diversity of our revenue streams and demonstrates our platform's ability to grow revenues despite a slower transactional market. To further illustrate, 92% of our first quarter incremental revenue growth of $74 million was generated from our non-transactional real estate services businesses. Our margins also reflect our commitment to investments in technology, data, shared service centers, procurement efficiencies and…

Thank you, Christie. Turning to Slide 2 on our website, this shows a sample of recent business wins - sorry that’s Slide 3 across our service lines and geographies. During the quarter our corporate services business won 34 new assignments and expanded existing relationships with another 23 clients and renewed 13 contracts. Unless scoring the strength and value of our relationships with corporate clients, our success rate for renewals was close to 100%. Our combined 70 wins totaled 170 million square feet across all regions, and our overall win rate reached 71%. One notable expansion came from Lenovo. We will now provide the leading computer maker with services covering 60 sites in 30 countries across the Americas and Europe. Additional wins not shown on the slide included a major North American airline and a leading global industrial company. Turning to capital markets, the quarter’s highlights included the €215 million sale of the Ellipse Tower in Brussels, and the US$285 million sale, over 50% interest, in the World Square Shopping Center in Sydney. Fee leasing transactions included a 665,000 square-foot lease restructure and extension for healthcare insurer CareFirst in Owings Mills, Maryland, and the completion of a 215,000 square-foot lease for Commerzbank in Hamburg. LaSalle Investment Management had a very strong quarter. As Christie noted in her comments, assets under management increased to a record $58.3 billion. The Jones Lang LaSalle Income Property Trust which LaSalle manages, raised over $125 million in the quarter and the fund’s total assets have grown to about $1.6 billion by the quarter end which is a 75% increase over the last 12 months. And as Christie also noted, in February, the IPO of the LaSalle Logiport REIT, which invests in Japanese logistic facilities was launched with an initial capitalization of $1.4 billion. The offering which…

[Operator Instructions] And our first question comes from the line of David Gold with Sidoti & Company. Your line is now open.

Hey good morning.

Good morning.

Hi, David.

A couple of questions for you but the first one, which maybe is an easy one or hard one, is Collin, I would love for you to give us a broader update on where you think, and obviously, first quarter may make it a little difficult with the starts and the stops, but where you think we are in this cycle based on everything that you now know a quarter later.

So the easy questions first Dave. I’ve said on previous calls, with nearly seven years into this recovery cycle, it’s been an interestingly different one from previous ones in the sense that it has been slow and hesitant and it hasn’t been accompanied by the usual interest rate raises that you see as a cycle matures. Indeed in many countries, the interest rates have been going the other way and in the U.S. the increases have been very hesitant. We will await the feds call this afternoon. So it’s been a seven year recovery process but it’s been slow and gentle. And if you look around, in our markets, and indeed more broadly across business markets, there’s been, there is very good sign of the usual bottlenecks that emerge in cycles, in production capacity or shipping capacity we need in our markets, a scarcity of space. And whilst we see a slow increase in the overall global levels of occupancy, it is very gradual indicating that supply and demand are remaining broadly in line. So there’s nothing really out there, which at this point says that even though we are in the fourth quarter here, there is anything imminent that suggests that this cycle is about to win. That’s partly why we were so clear in quarter one by saying that the quarter one developments, the first half of the first quarter if you like, were a pause and not a trend. Now I think the progress since that mid-February low point of markets as a whole, and indeed real estate markets, has been solid and sort of bears out that prediction. As to cloud, only thing that currently is clearly a problem for us and for the real estate markets as a whole, is this whole question of the British vote eight weeks away to stay or go in the European community and that is an issue for Britain and you've seen the impact. Britain was the only country in our European portfolio of some 28 countries, apart from Russia, that showed the revenue decline, and it was quite significant, it was sort of around 10% and Christie and I described the way in that - especially the capital markets and leasing markets for high margin areas. That’s the only cloud, we won’t predict what happens to that particular vote, but clearly for the next one quarter and possibly into the third quarter there is going to be a negative impact on British trading.

Gotcha. Okay, perfect. That's helpful. And just following up on that, when we look at the capital markets business, excluding the British impact, I guess commentary sounds like you are back to life across the board in all geographies for the most part.

It feels like it. And our research has produced that number of high 600s billions of dollars of transaction activity that’s based on the recovery that you saw towards the backend of the quarter, our overall confidence in the fundamentals. Again, equity still flowing in, unspent capital committed to real estate, still waiting to be spent. Our investment management company, LaSalle, reports that after that hesitant first quarter driven by financial market volatility, business has gone back to normal and trading is happening on the both the buy and sell side. So overall, it’s a positive outlook.

Perfect. And then just one last one, if I may. Christie, update us if you can on your expectation on these on the investment management side, presumably still first half weighted for the year. Would that still be your expectation?

Yes, David I would say still first half weighted, but as it relates to our overall outlook I mean the business is performing exceedingly well, we’ve got very strong acquisition performance together with the drive for productivity in the business, so overall, very strong outlook.

Perfect. Thank you both.

Thanks, David.

Thank you. And our next question comes from the line of Mitch Germain with JMP Securities. Your line is now open.

Good morning. Thanks for your time.

Hi, Mitch.

Christie, you mentioned moderating pace of hiring. Care to maybe elaborate a little further on that?

Sure. Depending on the market and the geography Mitch, we’ve taken a look at the productivity of our capital markets and leasing folks. And while we’re still investing as we always do in the best people around the markets. We started to moderate a little bit particularly as it relates to capital markets. We had invested consistently over the past couple of years and have just pulled back a bit. Also from an investment perspective, we’ve had, as Colin noted, significant investment as it relates to technology and data. And while we’re continuing that at a healthy pace of over 100 basis points year-over-year, we’re looking at specifically where we have opportunities to drive productivity and exceptional payback in alignment with our strategy.

So it is safe to say there will be net additions on the year in staffing or likely kind of flattish with just kind of filling in some holes and gaps where necessary?

Mitch, there will be increases on the year. This is not a stop or a reduction in numbers, it’s just a sort of easing back and raising our quality standards even further particularly in Asia and Europe. And what you see in our businesses, if you have a market which is hesitant, as we described the capital markets and people very quickly react and pull back on hiring. As for the Americas, there has been and will be continued solid growth across the region.

Great. And then maybe, Colin, while I have you, has there been any change in the acquisition environment? I know you guys have been extremely active for the last year in change. Has there been any change in pricing expectation?

You get three parts through the cycle and everyone thinks that property is worth top dollar. So you tend to get a little bit more tension in the pricing discussions. In general, we are not involved in competitive situations. So people who we acquire a merchant to our organization they differentially pay obviously for acquisitions, but beneath the merger and both parties get equal say with the key jobs. But when parties join our organization, they tend to expect pre-selected our platform rather than other places that they could build. And so that means that we have a relatively amicable process of price discovery and deal agreement.

Thank you.

Thanks, Mitch.

Thank you. And our next question comes from the line of David Ridley-Lane with Bank of America Merrill Lynch. Your line is now open.

Sure. So trying to understand maybe some of the mechanics that are driving global leasing down a bit, now projected flat to up 5%, the bulk of the cities and regions are seeing rent increases. Your own global rent monitor is sort of in the 3% to 4% growth range. You have still got job growth in the U.S. and Europe. I'm just wondering, what are the mechanics that could keep leasing volumes flat in 2016.

Well, that’s flat going to our projections, but they are flat with a pretty high level and sustained this high output for the last three year’s which is a good healthy levels to be out at this point in the cycle. What’s driving it well on the demand side the general level of corporate confidence as you can see from business surveys globally is high, corporates are well funded, they still retain a little cash in the balance sheet, they have adequate access to relatively cheap debt globally, and the general center of corporate CEOs may deal with and generally - the general corporate clients is positive. So there an expansion remote rather than contraction and rationalization, so that’s on the demand side broad brush that it’s the global situation. It’s not euphoric I said this earlier, which has been a steady, calm relatively conservative recovery certainly on the corporate side and people are investing - whether investing or doing it carefully. On the supply side, particularly in offices there has been globally a restrained level of development, with the level of delivery if office stock is still below the 2007 and 2001 peak levels. And so you haven’t got a boom of supply hitting the markets and tending to depress pricing. And so you’ve got conservative demand relatively restrain supply, where there is a little bit of new product come to market or which leads to these price increases in rental rates, which you’ve noted on our Slide 4 of generally in the 9% to 10% range, which is good and healthy for this point in the cycle. So those are some of the dynamics, you obviously get different positions in different cities. There is a lot of - more construction going on in London than there is in New York for example and it hardly all in Paris, so you’ve got very different levels of deliveries around this major mature market cities, whereas in China and India you see cities like Beijing, Shanghai, Delhi and Mumbai with 10% to 20% of the office stock being delivered annually for each of the next three years where you got there obviously a very strong supply, you also have a very hectic level of demand, so very different dynamic everywhere, but the board brush is where as I described.

Got it. Okay and then the pricing declines that we have seen on hard assets in the U.S. have tended to be in sort of Tier 1 cities, at least according to some of the price indexes that are out there. So I guess kind of two questions. First, would you agree that where you are seeing price compression is mainly in office? And then second, what percentage of your capital markets business is in office versus other property types?

You say price compression, you mean cap rate?

Sorry cap rate going up, so price is coming down. Sorry.

Yes, there has been very little of that I mean prices in general have been very steady across global investment sales markets I think we talked in the script about just a 10 to 20 basis point compression year-on-year. Where there has been declines, it’s been exceptional Russia, Sao Paulo and Rio in Brazil, and as you mentioned, some Tier 2 cities in China, what’s happening in China is that the growth in the service and retail sector which is the order of 12% is favoring of the larger Tier 1 cities so Shenzhen, Shanghai, Beijing, where we have seen good revenue growth. On the other hand places like Chongqing, Chengdu and Changyang, which are the more traditional industrial cities in the industry as you know not growing it’s even declining, they are having a harder time. We’re seeing less demand for by investors for space, buying assets in those cities. To your question about what proportion of our sales - our investment sales are in office it’s probably over 80% I don’t have an exact number but it’s the vast majority of what we do. Now we are growing in multifamily in America particularly with the Oak Grove acquisition and number of traditional investment sales, activities multifamily. We’re growing in residential particularly in the Europe, Asia and the funds transfer market, we’re growing in industrial globally and have an industrial - global industrial business, which operates on that scale. And we have a retail business which I have mentioned has been championed by Guy Granger in Europe and more recently by Anuj Puri, our India Chief and that is also growing on a global scale. But they are relatively small compared to the traditional office sector which we still dominate across Europe and Asia-Pacific.

Got it. And then just following up on some of your comments around Brexit, I know this is difficult to predict, but that's why I'm asking you. You get the vote in June. Do the deals happen in 2016, assuming the stay vote, or is this kind of a lost year because there is just not enough time to put deals together for 2016?

Well, tomorrow evening, I will be chairing a presentation by Lord Lawson in the Tower of London for about 100 of our clients. He is the Chair in fact of the exit group in Britain. And we brought him in to kind of stir some debate, because vast majority of business leaders, and we polled them over 80% of business leaders believe that the British economy is better off in the European Union and outside it. We as a Company have been very clear. We share that too. Not only from the point of view of our British business, but for the good of the European Union as a whole. So with that sort of broadcast on our position, I’ll just go to your question. It's going to be tough. We've polled our English business, British business talked to Christian Ulbrich yesterday, and the sense is that Q2 is going to be another last quarter, because people will, while the sense is probably the Britain will stay in, people, don’t have to call it, won’t. So investment sales will stay slow and leasing rules will be hesitant. It takes about three - minimum fourth months to get an investment sale underway and even if it’s ready to go by the beginning of Q3, they will struggle to close by the year-end. So for most of [indiscernible] transaction business in Britain and full reductions we’ve seen in Q1 will probably carry on through the rest of the year and then we will see how fast it snaps back in Q4 and Q1 next year.

Got it. All right. Thank you very much.

I hope it helps.

Thank you. And our next question comes from the line of Brad Burke with Goldman Sachs. Your line is now open.

Hi, good morning.

Good morning, Brad.

Hey good morning, Christie. I wanted to ask a follow-up on the capital markets. When we look at your performance relative to the market, what should we think about as driving the substantial strong relative performance and if you could touch specifically on the Americas, to your point, you were facing a really difficult comp last year and a difficult market environment and you still realized positive growth, so I thought that was surprising.

Well to the Americas point specifically, we outperformed the overall market even without the addition of the Oak Grove Capital revenue. So the positive results you see in the Americas is partly driven by the addition of the acquisitions revenues from growth, but even without that we still outperform the markets as a whole which were down from [69%]. As to the broader question of why we are doing so comparatively well. Well it’s the general point, we say this just generally about our business. We always have great recessions we do really well in a market share and competitive positions since during difficult markets, now this is not a recession. But what’s you do have is a period of time where people are struggling to get deals away. And in those circumstances sellers go for quality they look for the quality brands which can actually complete and deliver a sale at the positive price and that's what we do. We are reviewed in the market is being go to house when markets are difficult I mean you could argue that anyone can sell an asset in the easy market but it gets tough when markets are slow and hesitant as they were at the beginning of the quarter. Our invested principle reasons and one of the reasons we have that skill or that reputation is the global reach of our capital market business has, we have a global capital markets Board, they meet regularly most recently in New York with a group of our top 40 capital markets professionals globally, we handle on major clients in a global relationship management way, we operate our international capital group to bring capital to cross-border transactions and we believe we lead in the sector of the market. So put all that together and it’s the answer to your question.

Okay. I appreciate it. And just maybe an update on how you're looking to deploy capital over the course of the year between M&A and additional investments in the real estate funds. It looks like those increased by maybe $50 million since Q4. And whether you are looking to reduce the outstanding balance on your revolver.

Thanks Brad. I think as we look to the capital allocation strategy in our firm, we’re consistent with where we’ve been performing over the past three years. We are looking to put $0.50 to $0.60 on every dollar into M&A and we are on that track as it relates to capital. And so like we are also focused on keeping that in consistent with our strategy around $0.25 and $0.30 and the rest towards that co-investment. From the perspective of where we’re going for the year, we are very focused on managing our investment grade balance sheet and stay in consistent with the overall leverage profile.

Okay. And Christie, while I have you, the FX headwinds you had previously highlighted 3% to 5% headwinds in 2016 and I was hoping that you could give us an update because, presumably, things are moving a bit more in your favor at this point?

Yes, we are still just for the year Brad I mean depending on kind of where things move in that sort of thing, we are still looking at our 3% to 5%.

Okay.

And we will have more of an update on that as the year unfolds and we see where the pound goes et cetera.

Gotcha. Okay, thank you very much.

Thanks Brad.

Thank you. And our next question comes from the line of Michael Mueller with JP Morgan. Your line is now open.

Hi, thanks. A couple questions. Colin, you mentioned America's capital markets and I think you said you outperformed even without Oak Grove. And I was just curious, even without Oak Grove, would you have had negative comps or would you have broken even?

Yes, would have been slightly negative.

Slightly negative. Okay. And then second question, looking at project and development services, the growth has been pretty big there. I was wondering, can you talk a little bit about the types of tenants that are driving that demand, what the backlog looks like? And then, I think it was Christie who mentioned, you through it in a bucket of an annuity business and what are the attributes of this business where you look at it and say, okay this is annuity like facilities does.

So we’ve been investing in this business area that includes across the world, the work we’ve been doing with our Texas - building our Texas organization, we mentioned the acquisition in Britain as well as Germany and Eastern Europe last year. Of course America has seen healthy growth and demand is across the broad sweep of the country, it’s across all client types including investor types for certain projects. I think it’s probably - it has annuity characteristic and this essentially does continue through the cycle, but it’s particularly strong at this later stage in the cycle and we see a lot of corporate confidence and corporate activity movement in line with the levels of leasing activity which we described earlier on.

Okay, thank you.

Thanks, Michael.

Thank you. And I am not showing any further questions at this time.

All right. Well we’ve no further questions. We will end today’s call. I would like to thank everybody for joining Christie and myself and thank you all for your continued interest in JLL. We look forward to speaking with you again following the second quarter results in the summer. Thank you all.

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.