Savills has delivered solid revenue growth of 6% to £1.13bn and underlying profit was up 10% to £23.3m, according to its half-year report, but reveals that it’s UK residential operation has been struggling.
Mark Ridley (pictured), Group Chief Executive, says the year has started well for the global company with the first quarter performance comfortably ahead of the previous year, but adds, “the second quarter saw a slowing of transactional activity as occupiers and investors digested the implications of tariffs and geopolitical events.”
On the basis of ever stronger transactional pipelines, we believe the slowdown in our core markets will prove to be temporary.”
“On the basis of ever stronger transactional pipelines, we believe the slowdown in our core markets will prove to be temporary.”
The group’s UK residential business saw overall revenue drop 2%, with re-sales agency revenue coming down by 8% and volumes exchanged by 1%. Prime London was hit harder, where exchanges fell by 7%, though this was offset by 1% growth outside the capital.
Development sales, though, proved more resilient, growing 13% with volumes down 6% but average values were marginally up, which helped offset the re-sales decline. Institutional residential and student housing revenues jumped 32% in the same period.
In the commercial property sector, uncertainty over the October Budget had a dampening effect, with UK real estate investment volumes down 13% period-on-period. But Savills managed to grow commercial transaction fees by 16% with particularly strong growth outside London.
Office recovery
The report also reveals that offices are showing signs of recovery, with £5.1bn traded, a 26% increase on the first half of 2024. Prime central London office take-up was 14% higher than the same period last year, driven by historically low vacancy rates and robust demand.
The group‘s auction business sold over £420m of property during the period, up 8% year-on-year, while flexible office platform Workthere almost doubled its revenue.
Globally, consultancy revenue surged 20% and property management grew 5%, though investment management revenues declined 6%. The group’s less transactional businesses continued to provide resilience, with underlying profit growing 10% to £23.3m.
You can read the full report here.