Savills warns of tough year but cites ‘particularly strong’ results from Ireland

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Savills warns of tough year but cites ‘particularly strong’ results from Ireland


Savills
Savills

Savills reported a 3pc fall in profits as the estate agency warned of a tough year ahead due to economic and political uncertainty.

The group made a pre-tax profit of £109.4m (€127m) in 2018 compared with £112.4m (€131m) the year earlier.

However, revenue increased 10pc to £1.76bn (€2bn) thanks to recent acquisitions, according to preliminary results from the group.

On an underlying basis, profits rose 2pc to £143.7m (€167m).

The group cited “particularly strong results” from investment teams in Ireland and Germany, as well as strong performances from Hong Kong, Singapore, and South Korea.

Savills said it had made a “solid” start to this year, however it warned that the year ahead is overshadowed by macro-economic and political uncertainties across the world.

“It is difficult accurately to predict the impact of these issues on corporate expansionary activity and investor demand for real estate,” Nicholas Ferguson, chairman of Savills, said.

“At this stage, we expect to see declines in transaction volumes in a number of markets and growth in our less transactional business lines, accordingly we retain our expectations for the group’s performance in 2019,” Mr Ferguson added.

In the UK the group said commercial leasing performed better than anticipated last year, with investors supported by the relative value obtainable in the UK when compared with a number of European real estate markets.

The weakest commercial property sector in the UK last year was the retail sector, where a combination of structural and Brexit-related impacts continued to affect retailer performance and investor confidence, the group said.

Sharp falls in investment turnover in the retail sector contributed to a 5pc year-on-year fall in commercial property investment activity across the UK last year.

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Meanwhile non-domestic investors accounted for 43pc of all of the purchases of commercial property investments last year, and 73pc of London office investments.

(Additional reporting PA)

Online Editors

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