15 May 2024
SAVILLS PLC
("Savills" or "the
Company")
Trading update
Ahead of its
Annual General Meeting (AGM) to be held at 12 noon today at
Savills, 33 Margaret Street, London W1G 0JD, Savills plc, the
international real estate advisor issues the following trading
update:
For the year to date, Savills has traded in
line with expectations and comfortably ahead of the comparable
period last year.
Highlights:
· Whilst global
capital transaction activity is improving, volumes remain subdued ;
however values have adjusted in some markets such as the UK and are
recalibrating elsewhere.
· Leasing markets
have remained more resilient across most sectors, although office
take up remains heavily skewed to prime stock with strong
sustainability credentials which continues to drive rental
growth.
· Most prime
residential markets have remained resilient with volumes traded
marginally lower than last year, as expected .
· Savills' less
transactional businesses have performed in line with expectations,
underpinning our overall performance.
· As previously
indicated, H1 2024 will be impacted by the ongoing recalibration of
values but underlying activity levels are improving, and we
continue to expect progressive improvement in the second half of
the year as market recovery takes hold.
Mark Ridley, Chief Executive,
commented:
"I am
delighted with the performance of our teams worldwide in helping
clients facing challenging circumstances and in seeking longer term
business development initiatives, which our strong balance sheet
enables us to pursue. The strength of our less
transactional businesses continues to underpin our performance
overall and we continue to anticipate progressively improving
volumes through the second half of the
year."
Trading
Update
In the Asia Pacific region, Vietnam, Japan and
Korea have traded well. We have increased market share again in
Hong Kong, albeit off small volumes and markets are correcting to
the prevailing level of interest rates. Our substantial Property
and Facilities Management business in the region continues to
perform well.
In the UK, we have continued to perform well,
and we have maintained market share gains made in 2023 in prime
transactional markets. This has mitigated the impact of reduced
transaction volumes compared with the same period last year.
Meanwhile, our less transactional service lines have performed in
line with our expectations. During the period we have bolstered our
WorkThere flexible office advisory business with the acquisition of
Situu, a largely landlord-facing flex advisory business.
Overall, our Continental Europe and Middle East
(CEME) business has shown marginal improvement year on year in line
with our expectations. Savills is highly dependent upon
transactional activity in CEME where capital transaction volumes,
particularly in the major markets of Germany and France, remain
very compromised. Leasing momentum is a little stronger due to
demand for prime stock. In the Middle East market conditions are
much stronger and we have grown our Prime Residential brokerage in
UAE during the period. In addition, we raised our equity stake in
Riviera Estates, a prime residential business in the South of
France, to 75%.
In North America, where the Group is
substantially dependent upon leasing activity by corporate
occupiers, our business performance has been in line with our
expectations and substantially improved year-on-year. We have
concluded a number of significant "HQ" type transactions and
continue to take advantage of dislocation in the markets with the
hiring of individuals and teams in Canada and the more active
markets of Texas and Florida.
Savills Investment Management has traded in
line with our expectations in an environment which remains
challenging for the deployment of equity capital as valuations
continue to adjust. We have successfully held first closes on two
new funds; an equity fund and Registered Provider focused on the UK
affordable homes sector and a pan European whole loan debt fund,
both benefiting from initial seed capital from Samsung.
Outlook
Savills has traded in line with our
expectations for the period to date and comfortably ahead of the
same period last year. Our less transactional
businesses continue to provide a solid platform for the Group with
a resilient earnings stream
There remains significant investor interest in
the secure income characteristics of real estate, where pricing has
corrected sufficiently. While we have yet to see a significant
amount of re-financing driven activity, we do expect that to
increase through the second half of the year. Meanwhile occupiers
are clearly focused on improving the sustainability characteristics
of their portfolios as well as creating environments in which their
work forces can thrive.
We continue to develop our business through
selective recruitment and acquisitions supported by a strong
balance sheet and we maintain our expectation of continued
improvement in market conditions through the second half of the
year.
We anticipate announcing the Group's Half Year
Results for the six months to 30 June on 8 August 2024.
For further
information, contact:
Savills
020 7409 8934
Mark Ridley, Group Chief Executive
Simon Shaw, Group Chief Financial
Officer
Teneo
020 7353 4200
Elizabeth Snow
Jo Blackshaw