Cushman & Wakefield Ltd. · NYSE:CWK
Cushman & Wakefield — Investor Presentation (2025)
35 slides from Cushman & Wakefield's investor presentation, Feb 18, 2025
Slide 1: Construction Insights Winter 2025
Hl | CUSHMAN & WI WAKEFIELD ~ GLOBAL OCCUPIER SERVICES CONSTRUCTION INSIGHTS WINTER 2025 Better never settles
Slide 2: Contents
CONTENTS O01 ECONOMIC DRIVERS 02 CONSTRUCTION COSTS 03 CONSTRUCTION EMPLOYMENT 04 SECTOR SPOTLIGHTS 05 COUNTRY DEEP DIVE: UNITED STATES Cushman & Wakefield
Slide 3: Introduction
INTRODUCTION Uncertainty is the keyword as 2025 begins. A new administration in the U.S. has indicated that they plan to use tariffs to bolster the economy. However, without a clear policy in place, uncertainty has hit a crescendo. Prices have begun to preemptively increase as some providers prepare
Slide 4: Economic Drivers
ECONOMIC DRIVERS
Slide 5: Global Stress Ticks Up Again
GLOBAL STRESS TICKS UP AGAIN Increasing global tension has increased global supply chain stress, but stress remains below long-term averages * Continued geopolitical tensions have placed upward pressure on global supply chains. As of December 2024, global supply chain stress dipped back into negativ
Slide 6: Global Disinflation
GLOBAL DISINFLATION Inflation to moderate in developed economies Consumer Price Index YOY Change 12% 10% 8% 6% 4% 2% 0% -2% -4% 20011 200104 2002Q3 2003Q2 2004Q1 200404 2005Q3 2006Q2 2007Q1 20074 2008Q3 2009Q2 2010Q1 201004 2011Q3 2012Q2 2013Q) 201304 201403 Forecast Euro Zone —China, People’s Repub
Slide 7: Interest Rate Cuts Slow
INTEREST RATE CUTS SLOW Rates are expected to decline in the next few years 6% 5% 4% 3% 1% (% p.a., NSA) 0% Interest Rate: Government Bond Yield - 10 Year, -1% SYIMYABIMASYIMOATINAZTMAGTIMARYTMAGTMASY SE9IGGZGGSSGICIGGGGGGGLEGGSaGGGSGGGGG ant DORRAHDEFLAMTIFHOERLCASCORINMTHLG SaoQokoooQoozsCog gop 5
Slide 8: Construction Costs
CONSTRUCTION COSTS
Slide 9: Energy and Commodities
ENERGY AND COMMODITIES Energy prices continue to trend downward 180 160 140 § 120 Zz 8 100 i 5 80 g Ay 3 60 £ 40 20 ° sM aM aM BESZgses xegxgaga Forecast Source: The World Bank; Moody's Analytics Cushman & Wakefield 2018Q3 2019Q1 201903 2020Q1 202003 —Energy Prices 2021Q1 2021Q3 2022Q1 2022Q3 2023Q1
Slide 10: Construction Costs Moderate
CONSTRUCTION COSTS MODERATE Cost increases have decelerated across most countries YOY Change in Construction Costs South Korea Australia Canada ‘Germany United States Source: Moody's Analytics Cushman & Wakefield As of the third quarter of 2024, costs across these representative countries rose an av
Slide 11: Nonresidential Permitting
NONRESIDENTIAL PERMITTING A mixed picture 15% 10% 5% 4.1% | 8% ox _ -5% -10% Change in 12-Month Rolling Average -15% -20% Canada Cushman & Wakefield ‘orl 1.0% -2.7% France * Both Canada and South Africa saw 12.9% nonresidential permitting increase ona quarterly and annual basis, with a strong QOQ 9.
Slide 12: Construction Employment
O03 CONSTRUCTION © EMPLOYMENT
Slide 13: Construction Employment
CONSTRUCTION EMPLOYMENT Remains challenging around the globe 5% 3% 1% -1% -3% Construction Employmert Growth 5% 7% =Q0Q "YOY lyr F 2-yr F Australia 2.7% 2.7% 2.0% 3.8% Brazil 0.2% -0.4% -3.7% 6.9% Source: Moody's Analytics Cushman & Wakefield Canada 1.0% -0.1% -0.8% -0.1% China 0.7% 1.2% 1.2% “1.8%
Slide 14: Labor Constraints Persist
LABOR CONSTRAINTS PERSIST Labor and skills shortages continue to limit construction activity + Labor and skills shortages continue to plague the global construction sector. Based on the Royal Institution of Chartered Surveyors (RICS) Q3 2024 survey of over 2,500 companies across the globe, labor con
Slide 15: Sector Spotlights
SECTOR SPOTLIGHTS
Slide 16: Total Global Office Deliveries Flat YOY
TOTAL GLOBAL OFFICE DELIVERIES FLAT YOY The construction pipeline has shrunk, as leasing, costs and labor challenges continue to impact global markets Office Deliveries by Region 300 280 260 240 220 200 180 160 140 120 100 80 MSF Source: Cushi 35% 30% Under Construction as a % of Inventory 25% 20% 1
Slide 17: Industrial Deliveries Decelerated in 2024
INDUSTRIAL DELIVERIES DECELERATED IN 2024 The construction pipeline contracted in the Americas and EMEA due to shifting market fundamentals, while rising demand has led to growth in APAC Industrial Deliveries by Region Under Construction as a % of Inventory 1,000 16% 900 800 14% 700 12% 600 10% 500
Slide 18: Country Deep Dive: United States
[MaKe COUNTRY DEEP DIVE UNITED STATES
Slide 19: Construction Costs
CONSTRUCTION COSTS Cushman & Wakefield The U.S. construction industry is experiencing significant uncertainty in 2025. While sentiment improved after the presidential election, recent tariff announcements have raised concerns about inflation. Prices have started to rise, and expectations of further
Slide 20: Price Increases Likely to Accelerate in 2025
PRICE INCREASES LIKELY TO ACCELERATE IN 2025 January 2025 prices rose across most segments As of January 2025, nonresidential structure prices 1-Month YOY Prior Year* % Change were up 1.7% YOY. Overall, structure prices were up % Change % Change % Change Jan-2020 1.3% YOY, giving back the 1.1% price
Slide 21: Commodity Pricing Trending Higher
COMMODITY PRICING TRENDING HIGHER Some commodity prices declined in 2024; however, all prices are expected to accelerate in 2025 Commodity prices increased 3.2% on a YOY basis as of January 2025, significantly higher than the prior year’s prices. Some commodities saw price declines on a YOY basis, i
Slide 22: Equipment Price Increases Decelerate
EQUIPMENT PRICE INCREASES DECELERATE Prices for most equipment increased less in 2024 than a year ago January equipment prices increased 3.2% YOY, slower than the 4.3% growth from the prior year. Pumps and compressors experienced the largest easing in pricing, up 3.5% YOY versus a 5.5% increase the
Slide 23: Construction Costs Continue to Moderate
CONSTRUCTION COSTS CONTINUE TO MODERATE December costs increased nominally month-over-month Lower inflation translated to slower construction cost increases in December. Costs were below their 10-year averages, as measured by the two cost indices produced by Engineering News-Record, Construction and
Slide 24: New Construction Starts Increased YOY
NEW CONSTRUCTION STARTS INCREASED YOY Data centers and warehouse demand increased commercial construction starts December 2024 new construction starts rose 5.5% YOY, while they fell 2.2% MOM after a strong November. At year-end 2024, starts were above their long-term trend. Nonresidential building s
Slide 25: Metro Level Costs Decelerate
METRO LEVEL COSTS DECELERATE Annual construction cost increases have slowed On a QOQ basis, construction costs increased an average of 1.1% across these 12 metros. On a YOY basis, costs increased an average of 4.7% in the fourth quarter of 2024, slowing from the 5.9% increase a year ago. YOY costs i
Slide 26: Executive Confidence Grows
EXECUTIVE CONFIDENCE GROWS Some clarity improves confidence The quarterly survey results from ENR, conducted among U.S. executives of leading general contractors, subcontractors and design firms, rose significantly in the fourth quarter of 2024. Executive confidence posted the strongest reading from
Slide 27: Labor
LABOR Cushman & Wakefield Wage growth tempered slightly in December, but little relief is expected in 2025. Labor availability remains a concern, as the current administration’s immigration policies may further contribute to the sector facing additional labor shortages. 27
Slide 28: Robust Hiring Growth as Challenges Persist
ROBUST HIRING GROWTH AS CHALLENGES PERSIST U.S. construction firms continue to add jobs at a pace higher than the overall economy The nonresidential construction industry added 22,900 jobs in the last 12 months, through December 2024. This is a 2.5% YOY increase that exceeds the overall employment s
Slide 29: Wage Growth Remains High
WAGE GROWTH REMAINS HIGH Construction costs follow Construction wages continue to outpace other sectors. As of December 2024, construction and mining wages grew 5.4%, while overall employment wages grew 4.7%. As most sectors trend down toward the 3.5% Fed target, construction wage growth remains stu
Slide 30: Job Growth More Evenly Distributed
JOB GROWTH MORE EVENLY DISTRIBUTED Texas and Florida top job growth The South led construction employment growth, . claiming the top three spots, but by year-end 2024, Total Gain/Loss as of Q4 2024 the top 10 markets were more geographically GAIN Loss diverse than in previous years. Midwest markets
Slide 31: Project Timelines
PROJECT TIMELINES Cushman & Wakefield
Slide 32: Project Timelines: Equipment Lead Times
PROJECT TIMELINES Equipment lead times While some delays remain, equipment lead times continue to improve. * Small format CRAC units lead times have improved from 8-35 weeks last year to 8-20 weeks this year, giving projects back at least 15 weeks on the high end. * Fan coil unit lead times are also
Slide 33: The Construction Backlog Fell at Year-End 2024
THE CONSTRUCTION BACKLOG FELL AT YEAR-END 2024 A forward look at commercial and institutional construction work under contract The Associated Builders and Contractors (ABC) construction backlog for commercial and institutional projects totaled 8.2 months as of December 2024. On a YOY basis, the back
Slide 34: Architectural Billings Soften Further
ARCHITECTURAL BILLINGS SOFTEN FURTHER Commercial and Industrial billings have trended lower since 2022 Commercial and industrial architectural billings fell significantly in December, down 11% on a MOM basis, and down just 5% YOY. Billings were below 50 for all of 2024, indicating a continued declin
Slide 35: Cushman & Wakefield Contacts
CUSHMAN & WAKEFIELD TYLER PAYTAS Global Head of GOS Project Management tyler.paytas@cushwake.com CARRIE BOEGEMAN Head of Platform Operations GOS Project Management carrie.boegeman@cushwake.com SANDY ROMERO “| Research Manager, Global Research r sandy.romero@cushwake.com ABOUT CUSHMAN & WAKEFIELD Cus