Savills said it was looking to a stronger second half of the year in a trading update issued ahead of its annual general meeting, to be held at noon today.
The property services firm said that during the first four months of the year it had traded overall in line with expectations, and continued “to anticipate that our financial performance in 2012 will be weighted towards the second half of the year”.
It said that the first quarter saw anticipated slower markets in Asia, a robust performance from the UK residential business and continued strengthening of its US pipeline.
The firm’s UK commercial business “performed well”, particularly in central London.
The markets of continental Europe continued to be weak and, against the backdrop of increasing political and economic uncertainty, transactions were taking longer to complete or being put on hold.
Savills said London’s attraction as an investment location remained firmly established. Fiscal changes announced in this year’s Budget had a short-term effect on transaction volumes in the prime residential market in London, but they appeared to have substantially recovered.
Continued political and economic turbulence in many parts of the world has maintained investor interest in London’s prime residential property.
Outside London, it noted an increase in the volume of activity in the UK country market both in terms of new stock and applicants. In the residential markets of Greater China and Singapore, transaction volumes have been subdued, as anticipated, at this stage in the year.
The agent said its purchase of Gresham Down in January “has supported our commercial transaction business in prime central London, which has out-performed our expectations during the period and reduced the impact of relative weakness in commercial markets outside London”.
In Greater China, particularly in the established markets of Shanghai and Beijing, its commercial transaction advisory pipelines have continued to build strongly, supported by the attention of investors and developers progressively turning to office investment from residential assets.
It said it was too early to call a recovery in Hong Kong, but the banking market had recommenced lending on commercial investment, albeit at relatively modest levels, and this bode well for its performance in the second half of the year.
Globally, its consultancy and property management businesses “have continued to deliver strong revenue and profit growth and Cordea Savills, the group’s fund management business, has performed as anticipated”.
Finally, it said it continued to manage a strong balance sheet.
bridget.o’connell@estatesgazette.com
