Savills is taking steps to further reduce its presence and cost base in a number of non-core continental European markets.
In a trading update issued this morning the agent reported improved commercial transaction activity year-on-year in Germany and the Nordic region, but macroeconomic issues have curtailed activity in other countries.
It said it had continued to invest in teams and individuals in the core markets of Paris, the principal German cities, Sweden and Poland.
Savills still expects its full-year performance to be in line with expectations, despite the “major issues facing individual countries, regions and the global economy”.
It said that since June the business overall has performed in line with expectations, with prime London residential and Asia Pacific performing well and “compensating for underperformance in continental Europe”.
Its UK commercial, fund management and US businesses have also “continued to perform as anticipated”.
Savills said: “As we enter the final weeks of the year, when a significant part of the group’s annual profit is earned, it is clear that there are major issues facing individual countries, regions and the global economy.
“The property markets are not immune to these challenges. To date our strength in the prime markets of London and Asia has sheltered the group from the reduction in activity in mainstream markets and compensated for underperformance in continental Europe.
“We do see a reduction in volumes in some regional pipelines but any short-term risk in our principal commercial markets is more related to the timing of completions than to a lack of underlying activity.”
Commenting on the UK commercial market, Savills said activity continued to focus on prime assets, and added that the substantial amount of stock on the market is an opportunity for investors but will also test the strength of international demand.
In the rental markets, the City office market has continued to see weak take-up; however the West End has proved to be resilient.
Its UK residential agency business has “continued to perform well” since June, driven by a strong prime London market. It noted signs of increased activity in the South East country market while the pace of activity in the prime London market has become less frenetic.
bridget.oconnell@estatesgazette.com
