Emma E. Giamartino
Global Chief Financial Officer at CBRE Group
Thank you, Bob. As Bob mentioned, the diversification of our business and rigorous financial discipline were key to producing Q1 results that were slightly better than the expectations we set forth for each of our segments in late February, despite some market environment becoming more challenging. I'll review each segment now, starting with Advisory Services on slide six. Results in the first quarter were supported by stability in our valuations, loan servicing and property management lines of business, with revenue relatively flat compared to prior year.
We also benefited from cost mitigation efforts, we initiated last year that decreased advisory operating expenses by 2.5%. So these benefits were offset by a greater decline in our property sales business than expected. Capital markets, property sales and loan origination combined declined 40%, a slightly greater decline than expectations. Within property sales, all major reasons saw revenue decline with Asia Pacific performing the best, down 30%, and the Americas falling more than 40%.
Most sales activity today involves industrial and multifamily -- with office understandably drawing little capital activity. Significant capital is ready to be deployed, but we do not expect activity to improve until borrowing costs decline and market pricing clarity improved. Leasing revenue declined 8%, in line with expectations against the nearly 50% increase in the first quarter last year. Across geographies, leasing performance diverged, with the Americas down 10% and EMEA down 5% and APAC up 26%, all in local currency.
This is consistent with our expectations for non-U.S. markets, especially APAC, to perform relatively better in light of regional economic outlooks and improved office utilization levels. Now please turn to slide seven. Our GWS business continues to grow impressively with both facilities management and project management net revenue up by double digits, exceeding our expectations. Growth was driven by several of the large facilities management contract wins achieved last year and strong organic growth within project management, driven by large project mandates.
Our pipeline of new business reached a record level at the end of the first quarter as both existing clients and first-generation outsourcers are increasingly focused on cost reduction. GWS's margin on net revenue of 10.8% was in line with our expectations and will improve throughout the year as our cost reduction efforts to phase in. Please turn to slide eight. Overall, REI results met our expectations, and we continue to expect full year results to meet our original guidance. Q1 development results were supported by large asset sales, which occurred in January, consistent with what we discussed last quarter.
For the balance of the year, we expect our asset sales to be heavily weighted to industrial projects such as monetized in the fourth quarter. We have pulled back only slightly on planned construction starts for 2023. We do anticipate that well-conceived projects we got in the current environment will come online in supply-constrained markets, most notably for industrial. For the same reason, we are focused on carefully building our land position so that we can benefit from a first-mover advantage coming out of the downturn, a position that has historically provided significant rewards.
Additionally, our Telford U.K. development business is tracking in line with our expectations, and we continue to expect improvement from 2022 results.
Within Investment Management, profit was roughly flat versus prior year, excluding the mark-to-market impact on our co-investment portfolio, which was a significant positive in the prior year. For context, co-investment gains made up less than 1% of this business line's operating profit in the trailing 12 months. AUM declined modestly from the fourth quarter as net capital inflows and foreign currency effects offset most of the loss of market value. Turning to slide nine.
We believe the current environment is an attractive time to deploy capital. Our M&A pipeline is strong with multiple attractive opportunities, some large that could transform CBRE's existing offerings and drive meaningful shareholder value. We reduced share repurchases in the quarter as we continue to evaluate these opportunities. If we are unable to convert our larger pursuits we will accelerate our share repurchase activity well above Q1 levels. In any event, we expect to deploy more capital in the next 12 months than in the prior 12 months while maintaining an appropriately conservative level of leverage. We expect to generate in excess of $1 billion of free cash flow this year.
When combining this expected free cash flow with our lightly levered balance sheet, we could invest as much as $5.5 billion this year, while maintaining leverage below two turns. I'll conclude with our outlook. Our original 2023 outlook contemplated our recovery from the current downturn in the back half of the year. We now expect a delayed recovery due to more constrained debt liquidity and heightened market uncertainties. Our sales and leasing businesses are most impacted by the changed economic environment.
And as a result, we now anticipate property sales to fall by nearly 20%, which would represent a more than 25% decline from peak 2021 levels. We also expect leasing activity to be down by high single digits this year. As Bob indicated, we are maintaining our full year outlook, with core earnings per share expected to decline by low- to mid-double digits this year. Stronger growth than we originally anticipated in our resilient lines of business described earlier and incremental cost reduction efforts will largely offset the impact of our weaker outlook for capital markets and leasing transactions.
However, there is more uncertainty in this outlook than there was when we first presented it in late February. We continue to expect core EPS to exceed the prior peak in 2024. And as a reminder, our outlook is informed by our view that there will be a moderate recession this year, followed by a rebound in economic activity in 2024 as the Fed reduces interest rates. With that, operator, we'll open the line for questions.
