9th Jan 2007 07:00
Savills PLC09 January 2007 For immediate release9 January 2007 SAVILLS PLC ("Savills" or "the Company") Full Year Trading Update Savills, the international property advisor, is pleased to announce a tradingupdate for the year ending 31 December 2006 prior to the announcement ofpreliminary results on 14 March 2007. Background When we released our results for the six months ended 30 June 2006 on 5September 2006, the Chairman reported that despite rising global interest rates,the general economic outlook remained positive and should provide generalsupport for the property market. Main Business Streams Transactional The Investment and Agency businesses have outperformed last year with continuedhigh demand for property from private and institutional buyers both in the UKand overseas. The Commercial Investment business benefited from strong markets in both the UKand Europe with no signs of a slowdown in these investment markets despiteconcerns about rising interest rates and availability of stock. The biggest change in the leasing and development market this year has been therecovery in the London and South East office markets. Following their downturnin 2001-2003, tenant demand is back to average annual levels and this is drivinga renewed interest in office development in these markets. The residential markets have shown strength throughout the year, despite higherinterest rates, with price growth approaching 10% during 2006 and substantiallyhigher turnover than in 2005. London and the South East have seen the strongestmarkets, most notably in prime central London markets where price growth reachedan average of 23.9% over the year. In December, we announced the acquisition ofChesterfield which will increase our market presence in the prime Central Londonsector. In Asia, our Investment team continued to hold market share and generate feesdespite a cooling market on the back of rising US interest rates. In Japan, therising economy lead to increased activity for our Tokyo office and a newresidential office was opened. Consultancy Savills' Consultancy business made excellent progress in 2006, particularly inBuilding Consultancy, Valuation and Hotels on the back of more active marketsand our growing market share. In Asia, the Valuation team was particularly successful in capturing a largeproportion of the REIT listing valuation and consultancy services. Property Management Our Property and Facilities Management business secured new instructions andtheir revenue base continued to grow, despite constant competition on fees.This was further strengthened by the addition of our Korean business, continuingour commitment to increase our market share. The Property Management business in the UK continued to win new contracts andour European businesses in Paris, Madrid and Berlin performed in line withexpectations. Financial Services The residential mortgage market remained strong and the business continued totrade well, despite higher compliance and training costs resulting from thechanging regulatory environment. Fund Management Cordea Savills continued to grow funds under management with products includingServiced Land No.1 and Cordea Savills Student Hall Fund closing in the firsthalf of the year. Some abortive costs were incurred in the second half relatingto products that did not launch. Other new funds were launched in the secondhalf of 2006, including Italian Opportunities No.1 and Serviced Land No.2 which,along with a pipeline of other planned products, are expected to have afavourable impact on the 2007 results. Trammell Crow Company (TCC) It was announced on 21 December 2006 that, following the acquisition of TCC byCBRE, the Strategic Alliance Agreement between TCC and Savills had beenterminated. Overview Activity in commercial investment markets has remained high, driven bycontinuing strong demand from both domestic and international investors,together with a reasonable supply of properties coming onto the market. Primeresidential markets, particularly in London, have performed extremely wellthroughout the year, with volumes holding up at levels better than thoseanticipated in the early Autumn. We have seen a strong finish to the yearresulting in the profit for the year ended 31 December 2006 expected to benicely ahead of expectation. We are confident for the prospects of the Group in 2007. Ends For further information Savills plc Aubrey Adams (Group Chief Executive) +44 (0)20 7409 9923 Citigate Dewe Rogerson Sarah Gestetner +44 (0)20 7638 9571 George Cazenove This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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