Management pay cuts and furlough returns revealed by high-end agency

Savills has revealed the measures it has taken to mitigate the impact of the Coronavirus on its activities and balance sheet.

The agency - well-known here for its high end residential - is primarily an international real estate consultancy majoring in commercial property. Some 90 per cent of its offices worldwide are now open and working either on a rota system or are fully operational.

“We have adopted the same principle as in the Global Financial Crisis [of 2008/9] which is to maintain our staffing levels to ensure we can continue to provide comprehensive, high quality, timely real estate advice in circumstances where clients have needed it more than ever” says a statement from the agency to its shareholders.

Amongst the specific actions it has taken to mitigate the Covid-19 impact are senior management salary cuts for 2020 of 20 per cent across the group; reducing and deferring capital spending on “long term data and digitisation projects; and cancelling shareholders’ 2019 final dividend.

On furlough it says it took “limited acceptance of Government Support Schemes, restricted to those business lines expressly prevented from operating during lockdown, principally our UK Residential Transaction business. The majority of team members have now returned from furlough.”

In a comment on recent trading, Savills’ statement says: “Our [UK] performance has been very resilient despite significant reductions in transactional activity during lock down. This is due to the strength and breadth of our less transactional businesses in an environment where clients of all types have needed high quality advice and property management services. 

“We have also concluded a number of significant transactions which generally reflected the strength of our pipeline coming into 2020. 

“Since the recent lifting of estate agency restrictions in England, we have seen substantial increases in all measures of activity in our Residential Transaction business, although it is too early to determine the relative effects of the realisation of pent-up demand built over the lock down period and new business through genuinely improved sentiment.”