International property group Savills has reported record results following a wave of recovery that has boosted some of the world’s major and emerging real estate markets, but warned of a “hiatus” in the UK housing sector ahead of May’s election.
Savills’ management team led by Jeremy Helsby, said the company had broken through the £1bn group revenue target for the first time in its history in the 2014 results after the housing and office market boomed in the UK and investors snapped up cheap deals in recovering European markets, such as Ireland, Spain and the Netherlands – despite continued economic instability in the eurozone.
However, Mr Helsby admitted that the first half of 2015 would be far quieter in the British residential sector as buyers and sellers wait for the outcome of the general election.
It’s not about who wins, but the uncertainty, he said.
The London-listed company burst on to the commercial property scene in the US last year following its acquisition of American management firm, Studley, helping to drive pre-tax profits for the year to the 31 December to £104.3m, 34pc up on the previous 12 months.
“The US business is our most exciting opportunity for growth,” said Mr Helsby.
The US branch is based in five key centres, New York, Washington, Chicago, Houston and LA but Mr Helsby said he has an eye on Boston, Denver and Dallas.
The firm also reaped the rewards of a surge in residential property sales across many parts of the UK in 2014 following the easing of the availability of credit in the latter stages of 2013 and the Government’s Help to Buy scheme which boosted interest from first-time buyers, stoking sentiment in the market.
Overseas and domestic demand to live in London and the South East generated capital flows across the south of England as the recovery kick-started in the Midlands and the North.
The company also confirmed today that it is taking over German investment management firm SEB Asset Management for €21.5m (£15.6m).
It will be combined with Cordea Savills, its existing investment management operations, to create Savills Investment Management. SEB is based in Frankfurt and Singapore, and has around €10bn (£7.2bn) worth of real estate assets globally.
Last year SEB’s pre-tax profit hit €8.1m (£5.8m), and Savills believes the enlarged group will enable it to broaden its offering to both international and domestic real estate investors.