Colin Dyer - Chief Executive Officer Christie Kelly - Chief Financial Officer.

David Gold - Sidoti & Co. Mitch Germain - JMP Securities Brad Burke - Goldman Sachs Brandon Dobell - William Blair David Ridley-Lane - Bank of America Merrill Lynch Michael Mueller - JP Morgan.

Welcome to the Second Quarter 2015 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, 2014, and in our other reports filed with the SEC.

The company disclaims any undertaking to publicly update or revise any forward-looking statements. Now we'll turn to Colin Dyer, Chief Executive Officer, for opening remarks..

Thank you, Tim and welcome to everybody joining this review of our results for the second quarter and first half of 2015. With me today is Christie Kelly, our Chief Financial Officer, and Christie will, as is customary, provide details about performance in a few minutes. We had an excellent second quarter and first half of the year.

We are seeing the benefits of our decade long program of disciplined strategic investments in both client facing and support platform functions aimed at profitable growth across the broad sweep of our business.

Thanks to these long-term investments in people and platform, second quarter fee revenue reached a record $1.2 billion, up 17% in local currency, 9% in U.S. dollars, compared with the second quarter of 2014. Year-to-date fee revenue totaled $2.2 billion, a 20% year-on-year increase in local currency, 13% in U.S. dollars.

Adjusted earnings per share reached $2.01 in the quarter, 20% above the second quarter 2014 levels and a new record despite $0.15 negative foreign exchange impact. We recorded year-to-date margin expansion across all our segments.

LaSalle Investment Management continued to provide outstanding performance to clients raising $3 billion of capital in the first half and delivering healthy transaction and incentive fees plus significant equity earnings to the firm.

We saw a continued momentum in capital markets and our corporate solutions business is having an excellent year, taking market share and building strong pipelines for the rest of 2015. For example, during the quarter we won $80 of every $100 of potential revenue on new business pursuits in our Americas corporate business.

To put our current performance in context. The quarter's revenue and adjusted earnings per share are in line with the compound annual growth rates we've achieved since 2010, and that is 11% compound growth on revenue and 20% on adjusted earnings per share over that five-year period.

Our history of growth and superior performance was confirmed in June when we joined the Fortune 500 and reconfirmed yesterday when Standard and Poor's upgraded JLL to BBB+, acknowledging that we can provide market leading growth and financial discipline.

These results were produced in an environment of continued steady economic progress across the world with global GDP expected to maintain a three-year trend growth of 3.2% this year. The slides that we've posted in the investor relations section of jll.com summarize current conditions in global real estate markets.

Slide 2 shows trends in capital markets and leasing volumes. There are three key messages here. First, momentum and confidence are continuing to build in commercial real estate markets worldwide. Second, capital markets activity is sustained and growing globally.

And, thirdly, growth is now increasingly heading corporate agendas so leasing market demand fundamentals strengthened further in the quarter along with rental rates. And globally Q2 leasing market growth, it matched investment sales volume growth for the first time in this current cycle.

In the capital markets second quarter market transaction volumes reached $177 billion which is a 9% increase. Year-to-date volumes also came in 9% higher at $333 billion with larger deals and portfolio transactions contributing to the increase. Remember the strength of the U.S. dollar masks the true level of transaction activity around the world.

The U.S. stood up with first half volumes up 29%, Germany and the U.K. also had strong first halves, and China bounced back during the second quarter. Our own investment sales revenue outperformed the market in all three regions.

Investment demand for real estate continued to reduce yields, cap rates to new lows, compressing rather surprisingly at their fastest pace in five years. Investor demand pushed yields down 25 basis points in London and 10 to 20 basis point compression was seen in North American gateway cities.

Leasing volumes grew by 8% compared with the second quarter a year ago, reaching their highest level in more than three years with the greatest increases coming in selected Asia Pacific markets. JLL revenues outperformed the market in EMEA, performed in line with the market in the Americas and matched the most important markets in Asia Pacific.

As a further indication of demand strength, vacancy rates continued to fall down to 12.5% across 98 key global markets and, importantly, rents on prime offices in 24 markets around the world grew 3% and much faster in key business centers like London, Hong Kong and San Francisco.

So against that background for a summary of our performance in this positive market environment, I'll turn the call over to Christie..

Thank you, Colin and welcome to everyone on our call. As Colin noted, our firm reported excellent performance for the second quarter and first half of 2015. We delivered double-digit second quarter fee revenue and adjusted earnings per share growth over last year.

Our performance continues to demonstrate the diversity and strength of our platform which starts with our brand and is realized every day by our people who remain focused on our clients and investors. We continue to see in our results the benefits of increased recurring revenue, investments, acquisitions and our focus on productivity.

We finished the second quarter with record consolidated fee revenue of $1.2 billion, up 17% over last year, and adjusted earnings per share of $2.01 on adjusted net income of $92 million, up 20% over last year despite a $0.15 negative impact due to currency translation.

All three of our geographic segments and LaSalle delivered year-over-year increased performance for the quarter and first half. Capital Markets and Hotels revenue increased 33% on a local currency basis led by a strong quarter in EMEA and the Americas.

We delivered these results while continuing to selectively invest in and profitably grow our capital markets business in alignment with our strategic plan. Our annuity based property and facility management business revenue grew steadily at 7% for the second quarter and 9% year-to-date in local currency over a tough comparable last year.

The 29% increase in project and development services is a result of continued investment in our Tetris offering in EMEA as well as a focus on cross-selling within our business. LaSalle Investment Management grew advisory, transaction, and incentive fees and generated significant equity earnings from performance for clients.

LaSalle continued its successful capital-raising track record in the second quarter raising an additional $948 million of equity commitments bringing the year-to-date capital raise to $3 billion.

Adjusted operating income margin calculated on a fee revenue basis was 8.9%, essentially flat for the quarter in comparison to 2014 driven by transaction timing as well as platform investments such as innovative data technology for our future.

Importantly, year-to-date adjusted operating income margin calculated on a fee revenue basis increased 120 basis points to 7.2%, as we continuously focus on driving profitable revenue growth and productivity initiatives to capture margin enhancing opportunities We have over 100 productivity initiatives underway focused on people, process and pricing goals.

These projects range from small quick-win projects to larger, longer-term efforts designed to further enhance revenue and margin performance as well as our client experience. We will begin our review of the segment results with the Americas, where second quarter fee revenue increased 11% in local currency over second quarter 2014.

Revenue growth was partially driven by gains in capital markets and hotels, which had a 30% fee revenue increase as well as a 22% fee revenue increase in project and development services Our leasing business continued its strong momentum, achieving 6% growth for the quarter and 13% year-to-date.

The growth in our business was driven by strong performance in a majority of our U.S. markets where we are seeing the ramp up of investments and are benefiting from cross-selling throughout the platform. Our corporate solutions business continued to win new assignments while increasing the scope of existing mandates with longstanding clients.

Our pipeline of activity remained strong across all of our businesses. From an investment perspective, the Americas continued to attract and develop top talent and have announced key acquisitions in retail and energy and sustainability, as we continue to grow share and strengthen our platforms.

We also continue to invest in technology to support our clients such as our real estate data and hirise implementations that Colin will touch on in a moment. Operating margins in the Americas were lower in the quarter due primarily to transaction timing in our ongoing investments and remain up on a year-to-date basis.

Operating margins on a year-to-date basis increased 70 basis points to 7.8%, and adjusted EBITDA margin increased 60 basis points to 10.7%. We continue to plan for future growth in the Americas by capitalizing on our strong brand and our financial strength to invest strategically, increase productivity and enhance our talented and diverse workforce.

In our EMEA business, second quarter fee revenue increased 21% in local currency over second quarter 2014 and was broad-based across service lines and countries. EMEA's leasing revenue for the quarter was up 12% in local currency and capital markets and hotels was up 38%.

Capital Markets and Hotels performance was bolstered by the continuing momentum across European investment markets, particularly in the U.K., France, Sweden, and Central and Eastern Europe. Project and development services fee revenue for the second quarter increased 36%.

EMEA's fee-based operating income margin improved 180 basis points for the quarter to 9.8% and 130 basis points for the year to 5%. Adjusted EBITDA margin also improved 130 basis points for the year to 7%.

We continued to invest selectively for profitable growth and we have welcomed acquisitions in Sweden for our tenant representation business, Poland for our Tetris business and as reported yesterday, Turkey for our retail property management business.

Our EMEA business also was driving solid organic growth supported by our strong brand, market leading positions and focused productivity initiatives. Our balanced business mix across countries, service lines, asset classes, and client types is a strong tamping down to the effects of political and economic uncertainties in some parts of the regions.

The sentiment across our EMEA business remains positive as we look forward to the second half of the year. Moving on to our Asia Pacific business. Second quarter fee revenue increased 18% in local currency over 2014. Our annuity business is growing steadily.

The broad recovery in corporate confidence is demonstrated in each of our leasing and capital markets businesses. Asia Pacific's property and facility management business for the quarter was up 13% in local currency. Leasing revenue for the quarter was up 11% in local currency.

Overall, domestic demand in Asia Pacific for leasing services remained strong, especially in Australia, China, India, and Hong Kong. Capital Markets and hotels revenue for the quarter increased 25% in local currency.

Market activity levels in the region are expected to remain steady in the second half of the year and our capital markets pipelines remain solid. Operating margins in Asia Pacific were lower in the quarter due to the timing of transactions that moved to the third quarter but remain up for the year-to-date.

Operating margins on a year-to-date basis increased 50 basis points to 4.9% and adjusted EBITDA margin increased 60 basis points to 6.6%. During the quarter, we made numerous key hires across the region and acquired an excellent facilities management business in Australia.

We continue to invest in technology and to recruit, develop and retain top talent to drive continued profitable growth across our business. Our Asia Pacific team has a strong pipeline of work in hand going into the second half of the year and remains confident in capturing the momentum created.

LaSalle Investment Management had an outstanding quarter with local currency growth and advisory transaction and incentive fees compared to a year ago, as well as significant equity earnings. Capital values are rising in most areas leading to accelerated and higher sales prices that generate incentive fees and equity earnings.

The business generated $12 million of incentive fees during the quarter as a result of strong investment performance across all geographies particularly in EMEA. We see potential for additional incentive fees as mature funds continue to liquidate over the next several quarters.

If markets remain stable and the pace of asset sales continue, it's possible that 2015 incentive fees could meet or exceed 2014 levels. We continue to invest alongside our clients with a net $7 million invested in the quarter. $12 million in the first half of the year.

Previous co-investment alongside LaSalle's investors resulted in $25 million of equity earnings in the second quarter primarily driven by sales of legacy investments. We continue to deploy capital in a market where demand for quality assets outweighs supply. Regarding our investment grade balance sheet.

Total net debt was $522 million at the end of the quarter, a decrease of $24 million from the first quarter of 2015 while we also continued to invest in the business.

We plan to finance recently announced acquisitions as well as pipeline transactions upon completion using our bank facility capacity, while maintaining our leverage profile over the long term at two times net debt to EBITDA or less.

We are extremely pleased that Standard and Poor's raised our investment grade credit rating from BBB to BBB+, which along with our Baa2 rating from Moody's recognizes our operating discipline as well as the increasing strength of our annuity businesses and our overall global platforms.

To sum up, we had an excellent second quarter and first half of 2015. While the momentum continues in 2015, it's worth noting we could see roughly a 7% negative currency translation impact compared with 2014 if the strength of the U.S. dollar continues. As we look forward, our pipelines are strong and outlook remains positive.

Before turning over to Colin, I would like to express my sincere appreciation to my JLL colleagues around the world for their values, collaboration, and continued contribution. I'll now turn the call back over to Colin..

Thanks, Christie. Slide 3 in our investor deck shows a sample of recent business wins across service lines and geographies. In our corporate solutions business, we've won 36 new assignments to date in 2015, expanding existing relationships with 30 clients and we renewed 21 contracts.

These 87 wins total 196 million square feet across all of our regions. And as I said earlier, we're having a very good year in our corporate services business. During the quarter we won new business or expanded existing relationships with major corporate clients.

In addition to the companies shown on the slide, they include a major North American bank, global biopharma and insurance clients, a large Australian government agency, several leading computer hardware and software companies, major health care insurers, a large clothing manufacturer and one of the world's leading consumer products companies.

Our integrated portfolio services business, which serves corporate clients who purchase real estate services locally, continued to grow in the first half winning 29 assignments totaling more than 88 million square feet of space. Turning to investment sales transactions.

In Chicago, in a transaction announced just last week we represented Piedmont Office Realty Trust in the pending $712 million sale of the Aon Center. In central London, we advised on a £600 million acquisition of an extensive student housing portfolio.

And we negotiated the 635 million Australian dollar sale of Waterfront Place and Eagle Street Pier in Brisbane, which was Australia's largest single office sale since 2009.

Second quarter leasing highlights included completing a 1.1 million square foot industrial lease for Amazon.com in New Jersey; representing AXA Belgium on 106,000 square foot office lease in Brussels; and securing 440,000 square feet of new Class A space in Shanghai's Central Business District for WPP Group, the largest -ever CBD leasing transaction in Shanghai.

As I mentioned in my introduction and Christie discussed in more detail, LaSalle Investment Management delivered an excellent first half for its clients and our firm. Assets under management increased to $56 billion at the end of the quarter.

With its $3 billion capital raise this year, LaSalle has raised nearly $12 billion in the past 18 months giving it significant growth potential. Christie and I have both referred to continued investment in growth across our business. On Monday we completed the acquisition of AVM Partners, a leading retail management and leasing company in Istanbul.

As a result, we now manage nearly 11 million square feet of retail space in Turkey. Our approach to AVM and all ten of the acquisitions we've announced in 2015 was guided by the approach that has served us well for the past 10 years. We acquire companies selectively with comprehensive due diligence.

We evaluate finances for operating risk and strategic and cultural and client fit, and maintain our pricing discipline. We focus on high profit, high margin opportunities and we aim to minimize operational overlap that can destroy value. We plan carefully for integration and we are skilled and confident acquirers.

e make no apologies for this rigorous approach and as a measure of success, we have taken no write-offs on the 70 transactions, large and small, that we've completed since 2005. We also have the industry's strongest investment grade balance sheet, and as Christie said, this was reinforced with our rating upgrade to BBB+.

Finally, we have ample unused borrowing capacity with our banks. That means that we have the full confidence of our partner banks and can move quickly when we identify deals which meet our criteria.

Looking forward, we have a healthy pipeline of M&A transactions and are planning for a growing level in M&A activity in the second half in both volume and value. As Christie noted in her comments, we are also continuing to make significant investment in IT, data and analytics.

This covers both our internal systems and our commercial and client-facing platforms. Consider two products Christie mentioned which we recently brought to market. Hirise is a US-based, one of a kind marketplace, for which we have a patent pending.

It enables tenants to find future space and complete entire lease transactions online in as few as seven days. RED, Real Estate Data, is our corporate real estate's first open and scalable data and analytics platform.

RED integrates corporate real estate data with sales, workforce, finance, economic and other business data to improve operational efficiency, business performance and productivity levels in the workplace. RED contributed to several recent client wins and is fast becoming the industry reference for corporate real estate systems.

New technology solutions like hirise and RED are adding value to our clients and winning business for our firm. Looking ahead to the second half of the year. Slide 2 shows our researchers' market projections for investment sales and leasing volumes.

We are maintaining our full-year forecast for investment sales volumes at $750 billion to $760 billion, 5% above 2014 levels. Again, remember the projections are translated to U.S. dollars which could make the local currency growth we see everywhere into negative numbers.

We also forecast up to 5% growth in full-year gross leasing volumes with the greatest increases in Asia Pacific. Expansion is clearly back on the agendas of corporates worldwide and we see this translating to a 15% to 20% increase in global net absorption in the year.

In funds management, strong capital flows and high deal velocity will continue throughout the year as high levels of available equity drive demand supported by significant debt availability and low interest rates.

In this environment, LaSalle is well positioned to continue to attract and invest institutional capital and deliver great returns to clients and increase equity and incentive earnings for JLL. Moving on, our performance in the first half, our own outlook also remains very positive.

Our pipelines are robust across all of our geographies and service lines. Our strong balance sheet supports continued platform investments to improve the range and quality of services we provide to clients. And finally and most importantly, there is solid confidence and momentum both across our firm and in markets globally.

Part of our confidence comes from the knowledge that we can look to an extremely knowledgeable, experienced and diverse board of directors for insight, advice, and of course, good governance. We are very careful in the way we plan our board membership and succession.

In line with that, our two newest directors who joined in May continue this trend of excellence. Sam Di Piazza is the former global CEO of PricewaterhouseCoopers International; and Ann Marie Petach is the former CFO of BlackRock, Inc. We welcome Sam and Ann Marie to the JLL board.

Currently, three of our eight independent directors and 35% of all of our employees are women. Starting with the board and extending throughout JLL and LaSalle, we continue to increase these numbers. We are making good progress. Early in July, Diversity MBA magazine recognized us in the U.S.

as one of the top employers for diverse managers and women, naming JLL to its 2015 list of best places for women and diverse managers to work. Our aim is for JLL to be the go-to employer for women and minorities in real estate globally. Here is a further sample of awards which we won during the quarter. For the fourth consecutive year, the U.S.

Environmental Protection Agency recognized JLL with the 2015 ENERGY STAR Partner of the Year Sustained Excellence Award. In Germany, also for the fourth consecutive year, we were voted top real estate employer in an Immobilien Zeitung poll.

In the U.K., we were named international sales agency of the year at Property Week's 2015 residential awards, and at the 2015 Asia Pacific Property Awards, we won 13 awards including best property consultancy in China. So with that comprehensive overview of markets and our business, let's now take your questions.

Operator, could you please explain the process..

[Operator Instructions] Our first question or comment comes from the line of David Gold from Sidoti. Your line is open..

Terrific detail. A couple of points of follow-up. First, there were a couple of spots where -- a couple of geographies where you referenced deals where timing was a factor and presumably were delayed into the third quarter. And I was curious if you could add a little bit of color there.

Is it just traditional slower activity on the deal front which happens from time to time or particularly, I think with regard to Asia Pacific, do you see some effect there from the economies?.

Thanks for the question, David. I think in that context, look back as well as forward. You'll remember, we had a very strong Quarter one. And so looking at the two quarters together, it may be some deals fell into the first quarter and not into the second. But for sure we've got some.

With the intensity or velocity of deals we're seeing across most markets now, and that includes leasing now as well as capital market transactions, so we've had intensity and velocity, you know, you inevitably see timing shift on large deals from quarter-to-quarter. So I wouldn't read too much into it. We don't.

We just think it's just normal course of business noise..

And the only thing I'd add to that, David, is as it relates to timing, particularly in Asia Pacific, we've been having a fantastic year as we noted. And specifically there are timing of transactions that fell into the third quarter.

They're executed, which are really nice in fees and to address the timing that we were talking about in our hotels, specifically as it relates to our hotels business..

Got you. Okay.

So presumably we expect some catch up there then?.

Yes..

Okay, perfect. And then, Christie, if you could speak a little bit as to the technology investments going on in the Americas.

If you can update us on, a, impact so far, and b, how much is left to do there? When that sort of runs off?.

From a technology perspective, David, we have ongoing investments in the business overall that last year were averaging around 70 basis points. Now we're graduating up a little bit to 100 basis points based on our strategic plan, and we expect that to continue. The Americas is very in line with that plan, so it's ongoing..

Okay, okay. Fair enough. Just one left that I can, Colin, I'd note for the first time in my memory that you actually made a note in the release about how many acquisitions you've done year-to-date and, obviously, have given some additional color.

But I was curious, as you think about that in a go-forward basis, is it a function of geographies that you'd like to add to or service lines, or a little bit of both?.

Well, I used the phrase, I think in my comments, the investments and the acquisitions were across the board sweep of our business and so they're not focused in any one area.

We don't have an excessive focus on any one geography or part of our business strategies to grow across the board sweep of our geographies and service lines because we think that growth is available to us. So you've heard of acquisitions from Sweden down to Australia and across the U.S. and across most of our business sectors.

So that's an ongoing policy. We'll continue with that acquisition pipeline we're looking at in both value and numbers of transactions reflects a similar sort of profile. As to geographical growth, we said before that that is selective. We are moving across China at the rate of about one opening per year.

It's limited by availability of our own resources and skilled people rather than our interest in investing capital there. And we are expanding too in Africa. We opened last year in Lagos and we opened just this quarter in Nairobi, Kenya. So we're building gradually across our Africa platform as well.

That's more incremental following our,- particularly our corporate clients' need for us to build in the continent..

Thank you. Our next question or comment comes from the line of Mitch Germain from JMP Securities. Your line is open..

We're hearing a lot about, especially in the Americas region, strength and some of the broadening into some of the secondary markets.

And I was just curious how you guys are positioned to benefit from that broadening of trends?.

Across the Americas?.

I mean, specifically the Americas is kind of what I'm referencing, but I know that it's happening more on a global basis as well..

Yes, it's true. Across the U.S. transaction activity is spreading from -- the intensity of transaction activity is increasing across the broad sweep of smaller and medium sized markets.

We are not typically in the smaller cities across the U.S., but if you go down the list of the significant business centers, Boston, Chicago, Los Angeles, Dallas, Silicon Valley, Atlanta, Charlotte, we are in all of those significant places where still, in value terms, the bulk of business gets done and certainly those are the cities where the major investors are present and the major corporate clients are also present and active.

So we don't feel disadvantaged. We think our Americas business is extremely strongly represented across the sweep of the States. We have probably the largest tenant rep business in the U.S. market. So we've got full strength across the leasing and tenant rep activity areas.

And as we said, with 30%-plus growth rates in our capital markets business, we've been investing in teams and acquisitions to build that part of our U.S. service portfolio. So we believe we're in good shape and we're growing strongly..

Great, that's very helpful. Christie, I know you mentioned about 100 productivity initiatives and I know you kind of introduced some of these initiatives, give or take, about a year ago.

And I'm curious how you measure the progress and how should we interpret that measurement in terms of these initiatives?.

From the perspective of measuring the progress, Mitch, there are a couple of different things. First of all, we're focused on driving productivity across three primary levers, which include price, process and people. And specifically on the price, we're looking to drive incremental price to combat steep revenue pressures.

We're looking at better underwriting processes, we're looking at ways to better design our pricing processes, drive best practices. From a process perspective, it's all about driving improvement in the way we work. And then from a people perspective, we're really looking at opportunities to increase the revenue per head for our team.

And we look at the number of initiatives that we have coming into the business, which are coming from all over. When we first started, we were talking about 50 or 60 initiatives. We started with 20, 30, 50, 60, now we've got almost 120 initiatives around the globe.

We talk about them and review them with our team during our quarterly operating reviews, as well as when I go out to visit our major markets, and I've almost been to all 60 of our major markets at this point. And we also look at the benefits, the quantified benefits for this year, next year and the following year.

So we analyze those benefits on a three-year rolling average basis. And where we are right now, we have almost 120. We've got a lot of upside in that. There are 40% of those projects that still have not been quantified and we're looking at overall benefits on an annual basis of about $40 million in gross margin impacts.

So the targets specifically are driving for approximately a point of incremental margin. It's been great progress and we're having some fun with it too, around the globe..

Great, that's really helpful. And then the last one for me. It seems like hiring has been pretty much on par with last year levels, or at least your appetite to add producers.

I'm just curious in terms of maybe, by geography or by business line, is there a specific focus? It seems like investment sales might be a huge focus, but if you can just provide some perspective there I'd appreciate it..

It's across the broad sweep of our businesses. I made the comment earlier, Mitch, about the acquisition approach which is, again, across the broad sweep because we see opportunities for growth everywhere.

I have to say at this point in the cycle it gets tougher and if anything, the numbers are coming off slightly year-on-year because we're seeing people in their own existing businesses doing well, transacting well with good pipelines. And so it becomes harder to draw them across to our business.

Having said that, we are seeing useful sources of new people, good new people, from some of the consolidations that are either underway or are being planned at this stage. That obviously provides motivation for people to want to make moves and we have been benefiting from that.

So we continue to be open to good people who share our values and in particular want to work in an environment of collaboration with their colleagues, and that open-door policy serves us well. I'd say there are parts of the markets, European investment sales, U.S. leasing activity, the West Coast of the U.S.

where activity is so intense that it's really hard for us to keep up with the level of businesses available to us and hire at the pace to be able to deliver. So challenges of that sort are good challenges to have. They are fairly well spread across our markets globally..

Thank you. Our next question or comment comes from the line of Brad Burke from Goldman Sachs. Your line is open. .

I wanted to ask about M&A, and certainly we see the headlines, it looks like the pace is increasing. The way that it's disclosed in terms of capital expense, it's sometimes difficult to compare apples-to-apples just because of the payout of earn out.

So I don't know if you'd be able to give us some sense of how you are trending this year versus last in terms of the total value of M&A, new incremental M&A. And if you could give us any sense of how we ought to think about that on a go forward basis, I think that would be helpful..

I think if you look at last year versus this year, Brad, we're trending up in terms of the numbers and value of transactions that we have executed as well as announced. And further to that, given the robustness of our pipeline we are expecting, as Colin had discussed in his remarks, for the value and number to continue increasing through the year..

Just on numbers. We did about $155 million of transaction value in the last 18 months and that split roughly $50 million per half year. [indiscernible] value of transactions..

And you'll expect to increase from that level?.

That's what we said..

That's right, yes..

Okay. And then just on the investment management equity income. Christie, you gave us some color on how to think about incentive fees.

Are you able to give a sense of how to think about equity income over the balance of the year versus what was, obviously, a very strong Q2?.

Yes. I think it's consistent with what we've said in the past, Brad..

Okay.

And if you could remind me what that was?.

Consistent with last year's performance..

Got it, okay. And then on the IT investments. One of the things I think that’s just difficult for us is to think about that cash investment and the cash return that you get on it eventually, versus things that are maybe a little bit easier to model, like M&A or co-investments within the investment management business.

So I wanted to get your thoughts on how you think about the incremental return on that and how it compares against other things that you could be investing in? And to the extent that we're looking at the size of those investments, how much of that should we be thinking about is just the cost of entry to keep up with competitors that are also making pretty significant IT investments and how much of that is really offensive market share taking potential investments in IT?.

Well, Brad, we're not keeping up with anybody. We are leading, we believe, across the broad sweep of our businesses, and in particular the corporate sector.

If you go back to Ford's earnings statements yesterday, there's a traditional industry where their CEO talked about a sea change and the disruptive influence that technology is having on the good old traditional automotive sector.

Well, that same phenomenon is happening across all businesses and it's certainly happening now in real estate, arguably sort of later than many other sectors. So a good part of what we're doing is table takes, and by setting the pace we are raising the table stakes for other people.

We said it's about our own internal platforms and making our own people more efficient and to Christie's point, more productive in the way they do their work.

And importantly and a big difference from, say, five to ten years ago, the last cycle, it's systems and applications which are being accessed and used and data that's being fed back to our clients across the broad sweep of our business lines.

In that context, it's a significant help in winning business when we can give clients visibility on how deal flows are taking place, when [indiscernible] expose their investors to up-to-date real time portfolio performance when our corporate solutions business can show these multinational corporations, the performance of their real estate, again, real time.

That helps us with business and makes it harder for others to compete..

Thank you. Our next question or comment comes from the line of Brandon Dobell from William Blair. Your line is open..

I want to focus on LIM for a second. Maybe it's a proxy for what's going on globally.

Some color on where the capital raises are coming from in your geographies and, I guess, maybe product types and what should that tell us about future trends within the property markets and how you guys are positioning the owner and occupier services maybe along what LIM is seeing on a forward basis?.

So the capital raise is across Australia, Japan, broader Asia, Continental Europe, Britain, and the U.S. So just going down the list in my mind, that's all of our geographies. And so it's a broad -- and it's part of this broad trend we're seeing of institutional investors wanting to put money and then more money and more money into real estate.

The pipeline we think, it gives us roughly $12 billion of purchasing power. So $9 billion of equity and a further $3 billion of debt with that. So a significant forward business potential there.

Your question about what are the implications of that? Well for us it means LaSalle business continues its very healthy organic growth helped by the co-investment that Christie referred to across-the-board business area.

We're very pleased that our Asia platform which had a really rough time during and for the few years after the recession, is now back firing on all cylinders, generating incentive fees and attracting a lot of capital. So that's a great success.

And the implications for the broader firm, we run LaSalle operationally separately and that independence and autonomy is something which we, Christie and I both, underlined to the senior managers at a conference in Chicago last month. They have to have that independence for their fiduciary responsibilities to their investors.

Where they want to use the firm, they're welcome to. And they do if they believe that the firm will provide the best services for them in any one market.

But I think the indications of the amount of money going in through LaSalle and other investment vehicles into real estate just says that our industry will continue to grow at the service end as well, because that institutional money needs professional handling at the LaSalle level, but it needs professional handling when it comes to services, i.e., high-quality leasing, high-quality building management, high-quality sales transaction management when that becomes appropriate.

And that professionalization of services and the trend towards the larger brands and the higher-quality brands means that our market should continue to grow positively in the services area for both this cycle but across the next coming few cycles and decades..

Brad, the only thing I'd add there, just to give you a little specificity on what Colin mentioned at the start of his answer to the question, is the capital raised in terms of, by region, was primarily in Europe and the Americas.

And then in terms of product, 50% of the capital raised is in alignment with our separate accounts business and then about 25% between co-mingled funds and the securities business..

Okay.

Do you see any fee pressure on the new money you're raising relative to money you raised last year, a couple of years ago?.

Yes, there's fee pressure, Brandon. As you can imagine, especially as we're driving for bigger funds to drive productivity. Sometimes they're not as lucrative as the smaller funds.

But from the perspective of our business over the long term, our team has been driving productivity in the platform because they saw this coming years and years and years ago.

And I'm really pleased to report that, I didn't put it in my remarks for this quarter as I do usually, but the team drove over 10% productivity in assets under management, and that's on the back of last quarter driving another 14%.

And they're really working on improving the way they work to ensure that they're the best that they can be on behalf of their investors. And the other thing too is, that performance really comes as a result of their investment prowess..

Got it.

As you guys think about trends in America, leasing in particular, newer deals that your guys are working on, are they even are coming with the corporate services umbrella? Do they look any different now than they did a couple of years ago in terms of term structure, how the brokers are being compensated by customers? I just want to get a sense if there's any change in the margin given now we're a couple of years into a decent leasing market?.

Yes. Well, the general trend for leasing across the U.S. is, demand is ramping up and this would actually be a very solid global comment too, certainly for the mature markets. The demand is ramping up. The supply of new space in the office market is relatively restricted and that would be certainly true across Europe and the U.S.

So against that rents are tending to rise and that is in turn beginning to drive more development and delivery of more space in '16, '17, and '18. So that virtuous circle is up [away] [ph] and it's tending to benefit the landlord side of the equation.

So with that the general market dynamics are for better fee structures, in particular, we're seeing that in the major cities across the U.S. where demand is tightening and where therefore from the tenant rep side, our services are valuable and useful to the corporates looking for space..

Okay. And then a final one for me -- sorry for dragging on here -- Christie, as you think about the sustainability of the incremental margins that you guys have put up the last several quarters which have been pretty strong.

How do we think about the sustainability of either personnel productivity or your ability to hold the line on some of the more G&A focused costs? Or is there growing pressure to spend more in advance of what seems to be some decent growth opportunities for the next couple of years?.

Well, Brandon, I think our performance on a year-to-date basis, we don't run the business by quarter, and over the long term speaks for itself and we've driven significant incremental margin improvement in our firm.

Our business has really focused on ensuring that we have the right comp structures as well as the right tension and balance in our operating expenses.

And so to that point, everybody around the globe has been very focused on making sure that we're getting the appropriate leverage in the business and driving profitable revenue growth on behalf of our shareholders.

We put out there in our guide posts that we are very focused on driving 25 to 35 basis points of incremental margin improvement over the long term. We're on track for that, and from the perspective of going forward, given the strength of this team, the focus on productivity in our clients and being the best that we can be, it's sustainable..

Thank you. Our next question or comment comes from the line of David Ridley-Lane from Bank of America. .

On Projects and Development Services, this is an area where you have a little less visibility in third party data.

So curious if your pipelines would support a continued 20% plus growth in the second half?.

Sort of stumped, David. We don't have that data to hand in that level of detail across the globe. But I'd say, as a generalization, we commented on our pipelines being pretty full across service lines everywhere.

The corporate activity which basically drives the project business in our organization, as we said is ramping up because companies are now investing for growth again, taking space as I described. And that's tending to mean that they're allocating capital to kitting out and expanding their space. So it's a healthy background.

I can't give you the exact pipeline but the trend should be solidly positive throughout the year. It's another area where we're hiring as quickly as we can but where hiring is a challenge as the markets get difficult -- sorry, the market gets tight and active..

Okay. And just to clarify the growth investments drag. The 70 basis points in 2014 and 100 basis points in 2015.

Was that an America specific comment or a total company number?.

Total company. And when you take a look at the Americas, the Americas are really right on track for that as well..

Got it. And global rents, up 3% in the second quarter. We've read some industry reports suggesting the market wide vacancy rate may be less meaningful given changes in occupiers' preferences towards open floor plans. Live, work, play locations and energy efficient buildings.

Curious to get your view on the idea or the thesis that rental rates could accelerate over the next one to two years more than what the vacancy or net absorption would suggest?.

Well, we're certainly seeing the trend to more open space for, call it Google staff space, if you like. Not just in the traditional tech sector but because there are more and more technologists and IT people being hired into traditional corporations, think banks, motor companies, real estate services firms.

Those people are tending to want that sort of forward-looking space inside those traditional organizations as well. And that then spreads to the broader working population. So we are seeing that trend. To say it's at the margin is not to marginalize it, but it's not 60% of all office space is being subject to that trend.

There is still a very large, the very large majority of office space is more traditional style. So, again to that, sort of comment on the transition of space, of types of space, the key drivers for rental demand is that circle I described earlier on. Demand is increasing clearly, new supply is coming on strongly in developing economies.

So there's a top eight cities in terms of scale of pipeline. Seven of those eight cities are in Asia Pacific. And the more mature cities are only adding to their office pipeline or their office stock at the rate of, sort of 3% in the case of New York or 5% in the case of London annually. So a very constricted new supply coming through.

That's pushing rents up and in turn driving for more development deliveries where it, once again, the majority of that delivery on a global basis is coming on in the developing countries, Shanghai, Mexico City, Dubai, Mumbai, Singapore, Beijing, for example.

So what does all that mean when you put it together? It means the markets are shifting globally towards landlord-controlled rather than tenant-controlled.

It means tenants are having to look ahead and think further out about their requirements because the lack of available quality space coming through means they have to look ahead and think three and four years out in terms of their growth requirements and how they're going to satisfy them.

So all that means, put it together in a more active market as we've described, with more space being transacted across the broad sweep of major cities globally.

Is that what you were kind of driving at with your question?.

Yes. Thank you very much..

Thank you. Our next question or comment comes from the line of Michael Mueller from JP Morgan. Your line is open..

I actually tried to get out of the queue. My question was actually the prior one asked on the strong growth on project and development services which I think you tried to answer. So, thank you..

Thank you. I'll now turn the conference back over to management for any closing remarks..

Well, thank you, operator. And thank you everybody for your interest in our company and for joining us on the call today. We look forward to speaking to you again at the end of our third quarter, at the end of September. Thank you very much..

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone have a wonderful day..