11th Jan 2006 07:00
Savills PLC11 January 2006 For immediate release 11 January 2006 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 2005. Background When we released our results for the six months ended 30 June 2005 on 7September 2005 the Chairman reported a particularly good performance in thecommercial markets, both in the UK and overseas. Whilst the UK primeresidential markets had a slow start to the year, the London prime marketimproved in the second quarter and the Board remained confident that the growingspread of Savills' business both on a geographical and product basis meant thatwe were well placed to achieve good results for the full year. That confidencewas justified and we set out below an update of our trading position for theyear ended 31 December 2005, prior to the announcement of the preliminaryresults on 8 March 2006. Main Business Streams Transactional Office markets in London and the South East showed increasing signs of recoveryin the final quarter of the year and the regional markets remain stable. Tenantdemand for the best retail schemes, both in and outside of town centres,remained strong. Commercial investment markets remained very active in 2005, with demandcontinuing to outstrip supply. As a result commercial property investment yieldshave hardened. Investors still see commercial property as an attractive assetclass and demand remains strong; Savills has been well placed to take advantageof these excellent market conditions. After a slow start to the year, momentum in the prime residential marketsstrengthened in the second half of 2005, with a marked upturn in activity in thelast quarter and our under offer book ahead of the same period in 2004.Savills' focus on high quality products in prime markets should provide somebuffer against the impact of any downturn in the new homes market. In Asia, resurgence in property prices during 2005 has had a significant impacton transaction volumes and both our commercial and residential investment salesteams have enjoyed considerable success. Consultancy Savills' consultancy business has continued to make excellent progress acrossthe board in 2005. The valuation business expanded substantially during theyear and has grown its revenue streams. In Hong Kong and China, we recruited avaluation team of 35 professionals who are well respected in the region. Theyhave integrated well in to the business and are making a good contribution. Property Management Income from the Property Management business continued to grow and we are nowbeginning to see a real contribution from this expanded area of activity. Ourportfolio of shopping centres under management grew by nearly 40% in the UK.During the year we also acquired property management businesses in Paris andBerlin and, as announced on 19 December 2005 recently acquired a 50% share intwo Korean businesses with over 10m square feet of Grade A office space undermanagement. Financial Services Despite difficult market conditions, Savills Private Finance had anotheroutstanding year and performed ahead of plan. The overall mortgage market hasretracted slightly but despite this the business continues to grow. After theopening of a number of new offices in 2004, this last year saw the businessconsolidate its position. A new office opened in Leeds, providing SavillsPrivate Finance with a presence in a key UK regional market. Fund Management The last six month period has been marked by significant fund and infrastructuredevelopment. In Italy, the €283m equity raised for Europa Immobiliare No 1 hasnow been invested, a number of senior level appointments have been made, and thebusiness has gained approval from the Bank of Italy for its own SGR (theregulated Italian fund management company). In the UK, Cordea Savills WealthManagement has launched three new funds for the private investor market and newfunds are also under development for the Charities and Institutional segments ofthe UK market. These include a Student Halls Fund where Savills has financedthe purchase of £64m of seed assets. Overview Commercial markets have been very active, particularly on the back of stronginvestment demand. Driven by the expectation of a recovery in the office leasingmarket for 2006 we have seen an intensification of investor demand for thissector. There is also a growing interest in development projects and this willcontinue to provide opportunities for our professional teams. Prime residentialmarkets are currently proving considerably more robust than mainstream marketsand, while financial markets remain active, this trend should continue. With anexceptionally strong final month, the results for the year ended 31 December2005 will be ahead of expectations. Ends For further information Savills plcAubrey Adams (Group Chief Executive) + 44 (0)20 7409 9923 Citigate Dewe RogersonSimon Rigby +44 (0)20 7638 9571Sarah Gestetner This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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