Agency enjoys more ‘core’ property sales but fewer high-end deals

Savills has produced a strong ‘half year report’ to shareholders - but with an interesting take on how it’s operating in the prime property market.

Overall figures have been strong: its revenues across all areas, including commercial property and consultancy, are up 6% in the UK during the first half of the year to £435.9m while underlying profits are up 4% to £32.9m.

And its UK residential business revenue is up too - 7% higher at £76.8m, and underlying profits have risen 11% to £5.2m.

Overall sales transactions in the half year are 4% higher than a year earlier, but Savills admits that the average value of London property it sold was lower than before at £2m - this reflects Savills securing a bigger chunk of the ‘core’ market in the capital (selling below £1.5m) even though the company had reduced volumes of sales above that figure. 

Outside London the average value was stable at £1.3m. 

New homes sales revenue declined 22% attributed mostly to slow sales outside London and the south east.

In terms of International residential activity Savills acquired a lettings management business in Switzerland (Verbier Hospitality SA) and increased its shareholding in an agency in the Riviera region of France (Riviera Estates SAS). It also invested significantly in prime residential in the United Arab Emirates and further invested in residential sales in Sydney, Australia.

Mark Ridley, chief executive, tells shareholders in the half year report: “We have improved transaction pipelines in many locations and, with our core bench strength in place to support clients, Savills is well positioned to benefit as markets progressively recover through the next 12 to 18 months. Our expectations for the current year remain unchanged,.”