Savills cautious about Asian property market
Upmarket property firm Savills expects fewer transactions in Asia in 2011 following the Japan disaster and curbs on property speculation elsewhere in the region.
Uncertainty: Hong Kong is among countries putting curbs on property speculation
'In the near term, it is unclear how markets will react to the recent catastrophic events in Japan, particularly at a time of unprecedented global economic and political change,' said chief executive Jeremy Helsby.
'For the markets of mainland China, Hong Kong and Singapore these events come on top of government measures of the last 12 months to address property speculation.'
He said it was too soon to be certain, but any slowdown in Asia should be largely offset by improved performance elsewhere.
The company's 2010 results benefited from strong markets in London and Asian capitals, while conditions got better in the US, France and Germany.
Savills reported an 88% jump in underlying profits to £47.3m and a 19% rise in revenues to £677m.
Revenues from advising on residential transactions in the UK increased 22% to £86.8m in 2010, as overseas investors saw property in London as an attractive investment, although a shortage of mortgages hindered growth elsewhere.
The company also racked up a 35% increase in revenues from advising on commercial UK sales to £48.2m.
The group's Asia Pacific arm delivered an 'outstanding performance' with revenues up 33% to a record £280m.
Savills hiked its annual dividend from 9p to 13p per share – including a supplement of 4p.
Its stock fell 4p to 370p in trading today.
Analysts at broker Oriel Securities said Savills' results were 'very strong', although underlying profits just missed their forecast of £47.5m.
Broker Collins Stewart commented: 'For the first time, less than 50% of turnover came from the UK. We note that the group is confident of an improvement in the US market in particular and expects any adverse impact from the disasters in Japan to be offset by gains elsewhere.
'We had assumed that profits would slip a little next year but it now looks as if this may be too pessimistic.'
Savills employs 20,000 people across 200 offices worldwide.
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