Property consultancy firms are hoping to boost revenues from management, advisory and valuation business to compensate for falling incomes from providing services in the investment sector. When the investment market was robust in 2007 and the first half of last year, firms collected substantial revenues from commissions for advising and brokering on large transactions. But those 'good old days' are now gone, say industry players. In the risk-averse and credit-strapped market triggered by the global financial crisis, there is now likely to be a sustained decline in property investment. Raymond Lee, the managing director of Savills Hong Kong, said: 'Commissions from the investment market will continue to drop sharply this year, following a fall in the second half of last year.' Typically, as an adviser on an investment deal a consultancy will earn a commission of 1 per cent of the value of the deal. In anticipation of the sharp earnings decline, Savills would now put more resources into expanding its property management businesses in the hope of maintaining its total earnings achieved last year, Mr Lee said. The firm reported pre-tax profit of HK$160 million last year, down from HK$180 million in 2007. More than 70 per cent of its revenue came from investment commissions, with the remainder from rental transaction fees and property management business. 'With the slowdown of the investment market, the income mix will see a big change. Just 20 or 30 per cent of income will arise from commissions on property transactions this year,' Mr Lee said. He said Savills had teamed up with the University of Hong Kong to upgrade its maintenance services and had also improved its computer systems for the management of serviced apartments. Jones Lang LaSalle, DTZ and CB Richard Ellis also said business from non-transaction-related services such as valuation, property management, and building and consultancy would grow amid a tough market. 'People need professional advice when times are tougher,' said David Watt, the chairman of DTZ North Asia. However, he said the firm had not overly relied on transaction income. Income from transactional business accounted for 45 per cent of the firm's total, he added. Fung Kin-keung, the managing director of Jones Lang LaSalle Hong Kong, agreed. He expected growth from property management and corporate business, in which it advises large corporations' real estate strategy such as the timing to discuss renewal. '[Corporations] did not care about it as they have made a lot of money in good times,' Mr Fung said. 'But now they will be careful to manage costs. So they need us. I hope the anticipated growth can remedy the potential decline from the transactional business.' Transaction business accounts for about a third of the group's business. Craig Shute, a senior managing director of CB Richard Ellis Hong Kong and Taiwan, said income from property transactions accounted for only 10 to 15 per cent of the firm's diversified business portfolio and revenues were therefore not likely to be significantly hit because of the market downturn. But all property consultants admitted that they had taken cost-cutting action in the face of the economic and property downturn.