Savills sees full-year results at upper end of expectations
By Michele Maatouk
Date: Monday 13 Jan 2020
(Sharecast News) - Savills said on Monday that underlying results for the year to the end of December are set to be at the upper end of the board's expectations following an "excellent" performance in the UK.
The FTSE 250 real estate advisor said in a trading update that the effect of Brexit and political uncertainty in the UK suppressed market activity in both the commercial and residential transactional markets until mid-December. However, the outcome of the General Election "prompted a strong close to the year as confidence to transact returned to the market".
Despite an uncertain backdrop, the UK performed well across all business lines and the residential segment continued to outperform overall market conditions, taking share in the core London market.
In Hong Kong, another of its key markets, political unrest severely reduced the volume of trading activity from mid-year and continues to do so, it said.
The Asia Pacific business performed slightly below Savills' original expectations, mainly due to difficulties in Hong Kong and as the recruitment drive in Australia took longer than expected to bear fruit.
In Continental Europe, the performance was broadly in line with expectations in the context of a decline in the volume of transactions in some major markets. In North America, meanwhile, Savills said it delivered "significant" growth in the Occupier Service business and its capital markets teams improved profits year-on-year. This led to a "much-improved" performance overall.
The group's investment management division performed ahead of its expectations.
"Looking to the year ahead, increased political stability in the UK should maintain improved sentiment in real estate markets. Global investor demand for secure income, restricted supply and expectations of continued low interest rates suggest that the medium and long-term dynamics of the UK real estate market should remain largely positive," the company said.
"Nevertheless, some caution may remain until the full impact of Brexit is better understood. Certain other global markets continue to be overshadowed by macro-economic and political uncertainties. As a result of these factors, at this early stage in the year the Board's expectations for 2020 remain unchanged."
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