Savills profits soar 88% as wealthy buyers move into central London

Sales at One Hyde Park and other luxury London property developments helped boost upmarket estate agency Savills in 2010, as it recorded an 88% rise in underlying profits.

Growth in China was also strong, as overseas revenues overtook UK revenues for the first time.

Revenues rose 21% to £677m, while underlying profits before tax were £47m, up from £25m last year. The group issued a special extra 4p dividend on the back of the numbers.

Savills said the London market was still buoyant in the top postcodes – central districts favoured by wealthy foreign buyers. "The level of activity in London continued to be significantly influenced by overseas buyers, for whom London's market transparency, liquidity and political stability represent an attractive investment destination," it said.

Earlier this week fresh figures emerged on sales at One Hyde Park in central London. Four flats in the complex developed by the Candy brothers have been sold for a total of £62m. Savills is one of the selling agents on the glitzy development.

City rents on commercial properties have also surged ahead in the last year, and Savills said it expected those rents to increase a further 5%-10% in 2011.

Elsewhere in the UK, Savills said a lack of mortgage finance had held the property market back.

"Away from London it's impossible to generalise," said Jeremy Helsby, chief executive of Savills. "But we are not seeing the same levels of growth, we don't have the same demand for space. If the economy starts to improve, demand for space follows on from general confidence."

Huge growth for Savills in the Asia-Pacific region means it now makes 40% of its revenues there – as much as it makes from the UK market. Commercial transaction revenues, boosted by Hong Kong in particular, grew nearly 80%.

Rob McKellar, chief executive of the Asia Pacific division, said it was too early to understand the impact of the Japanese earthquake and tsunami on the group. Savills has 80 staff in Tokyo, and of the four foreign nationals working there only one is still there: one has moved out since the disaster and the other two were travelling on business when it happened. "We are providing financial assistance [to those affected]," McKellar said.

The strong profit numbers are likely to mean a rise in bonuses for Savills staff, which totalled £60m last year. The property consultancy will reveal the figures later this month when it issues its annual report.

Shares in Savills were down by 1.6%, falling 6p to 368p.