Region’s divisions shine as Savills enjoys profits leap

Revenues from advising on residential transactions in the UK increased 22 per cent to £86.8m in 2010, as overseas investors saw property in London as an attractive investment, although a shortage of mortgages hindered growth elsewhere.

The group’s Asia Pacific arm delivered an “outstanding performance” with revenues up 33 per cent to a record £280m but Savills expects transactions in the region to drop in 2011, as China moves to reduce property speculation.

Group sales increased by 19 per cent to £677m in 2010, driven by the recovery of prime property markets in London and China, while underlying profits rose 88 per cent to £47.3m.

Revenues from advising on commercial sales in the UK increased 35 per cent to £48.2m, while underlying profits rose to £7.7m from £1.2m in the previous year, driven by inflation in rents.

The market outside London also showed signs of recovery as a shortage of properties in the capital sparked renewed interest in high end regional retail assets.

Paul Fairhurst, head of Savills Leeds commercial business, said: “Commercially, the Yorkshire region has had a strong year in the investment and management sectors. The business continues to grow and we predict continued success for the year ahead.”

Matthew Jones, head of Savills Leeds residential business, added: “We have had a very strong year in the residential sector in Yorkshire.”

Savills said the UK residential market in London and the Home Counties slowed in the second half of the year after the best properties reached their pre-recession peaks. It is likely to remain slow in the first half of 2011 although it should pick up in the second half of the year.

The catastrophe in Japan could also have an impact on its Asian markets, it warned.

Chief executive Jeremy Helsby said: “In the near term, it is unclear how markets will react to the recent catastrophic events in Japan, particularly at a time of unprecedented global economic and political change.

“For the markets of mainland China, Hong Kong and Singapore these events come on top of Government measures of the last 12 months to address property speculation. The longer term potential of our Asian business remains compelling, but at this stage, we continue to expect a reduced volume of transactions in the region in 2011.”

Analysts at Oriel Securities said the results were “very strong”, although underlying profits were just below their forecast of £47.5m. Bottom-line pre-tax profits increased by 173 per cent to £36.8m. Savills employs 20,000 people across a network of 200 offices worldwide.