REG - Savills PLC - AGM Statement

SavillsAnnouncement

15/05/2024 10:15

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RNS Number : 5406O  Savills PLC  15 May 2024

 

15 May 2024

SAVILLS PLC

("Savills" or "the Company")

Trading update

 

Ahead of its Annual General Meeting (AGM) to be held at 12 noon today at
Savills, 33 Margaret Street, London W1G 0JD, Savills plc, the international
real estate advisor issues the following trading update:

 

For the year to date, Savills has traded in line with expectations and
comfortably ahead of the comparable period last year.

 

Highlights:

 

·      Whilst global capital transaction activity is improving, volumes
remain subdued ; however values have adjusted in some markets such as the UK
and are recalibrating elsewhere.

·      Leasing markets have remained more resilient across most sectors,
although office take up remains heavily skewed to prime stock with strong
sustainability credentials which continues to drive rental growth.

·      Most prime residential markets have remained resilient with
volumes traded marginally lower than last year, as expected .

·      Savills' less transactional businesses have performed in line
with expectations, underpinning our overall performance.

·      As previously indicated, H1 2024 will be impacted by the ongoing
recalibration of values but underlying activity levels are improving, and we
continue to expect progressive improvement in the second half of the year as
market recovery takes hold.

 

Mark Ridley, Chief Executive, commented:

 

"I am delighted with the performance of our teams worldwide in helping clients
facing challenging circumstances and in seeking longer term business
development initiatives, which our strong balance sheet enables us to pursue.
The strength of our less transactional businesses continues to underpin our
performance overall and we continue to anticipate progressively improving
volumes through the second half of the year."

 

Trading Update

 

In the Asia Pacific region, Vietnam, Japan and Korea have traded well. We have
increased market share again in Hong Kong, albeit off small volumes and
markets are correcting to the prevailing level of interest rates. Our
substantial Property and Facilities Management business in the region
continues to perform well.

 

In the UK, we have continued to perform well, and we have maintained market
share gains made in 2023 in prime transactional markets. This has mitigated
the impact of reduced transaction volumes compared with the same period last
year. Meanwhile, our less transactional service lines have performed in line
with our expectations. During the period we have bolstered our WorkThere
flexible office advisory business with the acquisition of Situu, a largely
landlord-facing flex advisory business.

 

 

Overall, our Continental Europe and Middle East (CEME) business has shown
marginal improvement year on year in line with our expectations.  Savills is
highly dependent upon transactional activity in CEME where capital transaction
volumes, particularly in the major markets of Germany and France, remain very
compromised. Leasing momentum is a little stronger due to demand for prime
stock. In the Middle East market conditions are much stronger and we have
grown our Prime Residential brokerage in UAE during the period. In addition,
we raised our equity stake in Riviera Estates, a prime residential business in
the South of France, to 75%.

 

In North America, where the Group is substantially dependent upon leasing
activity by corporate occupiers, our business performance has been in line
with our expectations and substantially improved year-on-year. We have
concluded a number of significant "HQ" type transactions and continue to take
advantage of dislocation in the markets with the hiring of individuals and
teams in Canada and the more active markets of Texas and Florida.

 

Savills Investment Management has traded in line with our expectations in an
environment which remains challenging for the deployment of equity capital as
valuations continue to adjust. We have successfully held first closes on two
new funds; an equity fund and Registered Provider focused on the UK affordable
homes sector and a pan European whole loan debt fund, both benefiting from
initial seed capital from Samsung.

 

Outlook

 

Savills has traded in line with our expectations for the period to date and
comfortably ahead of the same period last year. Our less transactional
businesses continue to provide a solid platform for the Group with a resilient
earnings stream

 

There remains significant investor interest in the secure income
characteristics of real estate, where pricing has corrected sufficiently.
While we have yet to see a significant amount of re-financing driven activity,
we do expect that to increase through the second half of the year. Meanwhile
occupiers are clearly focused on improving the sustainability characteristics
of their portfolios as well as creating environments in which their work
forces can thrive.

 

We continue to develop our business through selective recruitment and
acquisitions supported by a strong balance sheet and we maintain our
expectation of continued improvement in market conditions through the second
half of the year.

 

We anticipate announcing the Group's Half Year Results for the six months to
30 June on 8 August 2024.

 

For further information, contact:

 

Savills
 
020 7409 8934

Mark Ridley, Group Chief Executive

Simon Shaw, Group Chief Financial Officer

 

Teneo
 
                        020 7353 4200

Elizabeth Snow

Jo Blackshaw

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