International property agency Savills has reported a 9% increase in group revenue for the first half of the year, with growth recorded across all business divisions, according to the company’s interim results statement.
The results contrast with broader challenges facing estate agencies in the current market environment.
UK market activity slows
Despite the overall positive performance, Savills acknowledged that activity in the British market decelerated during the second quarter following a strong start to the year.
“Sentiment in the UK market was more affected by the escalation of the Middle East conflict and its impact on interest rates, and after a positive Q1, activity slowed as investors assessed its implications and latterly those of anticipated political change in the UK,” the company stated.
UK investment volumes declined by 12% in the first half, with transaction timeframes remaining extended and investor demand selective. The firm noted strong pipelines but limited new stock entering the market, reflecting wider conditions of subdued market activity.
Eastdil Secured acquisition
The group completed its acquisition of investment bank Eastdil Secured last month, expanding its capabilities in the investment sector.
Simon Shaw, Group Chief Executive at Savills, said: “I am delighted with the significant improvement in Savills performance, and for this, I thank our people for their focus on delivering sound advice and rigorous execution, and our clients for their trust.”
Shaw added that the enlarged group’s pipelines are strong, though he acknowledged that transaction timelines remain difficult to predict in the current environment.
UK residential performance
In May, Savills reported delays to property transaction completion times, though the company saw no increase in fall-throughs.
Earlier this year, the firm revealed that group revenue rose 6.1% to £2.55 billion in the previous year, with underlying profit before tax increasing 11% to £145.3 million. However, UK residential transactional revenue fell 4% to £199.7 million, with underlying profit declining 9% to £18.1 million.
Britain remains a core market for the business, accounting for approximately 40% of group revenue, whilst the British residential agency operation represents 68% of the company’s residential transactional revenues.
The mixed performance reflects the challenges facing the UK property sector, where transaction costs have increased whilst market conditions remain uncertain.
