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Savills reports unpredictability in the regional property market
HIGH-END property company Savills reported a leap in 2007 profits yesterday, but said its prospects for this year would depend on how swiftly financial markets can recover from the global credit crisis.
The group reported a 14 per cent rise in underlying pre-tax profits to 85.5m, but said it is expecting low property turnover and flat house price growth in 2008 following the credit crunch.
Chairman Peter Smith said: "The outlook for our UK and US commercial businesses and our UK residential and mortgage broking businesses continues to depend on how quickly confidence returns to financial markets."
The group said its Yorkshire business is unpredictable at the moment. "Just when you think nothing is happening, you get two or three offers for a house," said Ben Pridden, head of residential sales at Savills' York office. "Houses at more than 1m are selling, the hottest market is in and around York city centre. The country house market is picking up as the daffodils come out and the climate becomes more clement."
He added that the last quarter of 2007 had been very difficult, but so far this year it has been "encouragingly busy".
Matthew Jones, the Leeds' director of residential development, described current trading as challenging.
"Leeds city centre has borne the brunt of falling prices and talk about the market not being sustainable. I'd say the market is finding its equilibrium."
On the commercial side, the Leeds planning team is working on the high profile Wellington Place project, a 2m sq ft mixed use development in the new 'West End' of Leeds.
In London the group said uncertainty over City bonuses had driven a 2 per cent fall in prices among prime central London properties in the final three months of 2007.
Savills has benefited from a wider geographical spread as its Asian and European businesses proved more resilient. The group's Asia Pacific business showed strong growth in revenue, spurred by strong residential occupier demand in hotspots such as Hong Kong, China, Australia and Singapore.
Incoming chief executive Jeremy Helsby said Savills' strong financial position and cost controls mean it is well placed to take advantage of possible opportunities thrown up by the credit crunch through either acquisitions or lower commercial property prices.
But the economic uncertainty also means the pace of growth at its UK residential arm – which accounts for around 20 per cent of revenues – will slow this year.
Mr Helsby said 2008 would be challenging for the property sector, but added that demand for office space in the UK regions remained stable.
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Saturday 11 February 2012
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