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(Alliance News) - Savills PLC said Thursday, ahead of its annual general meeting, that its performance for 2020 is dependent on how much regional transactional markets recover in the second half, following the Covid-19 outbreak.
The FTSE 250 real estate advisor said the pandemic has had a significant impact on global real estate markets, starting from the Asia Pacific region. The impact of lockdowns around the world, including the prohibition on site viewings has led to a significant reduction into the volume of transactional activity which could be conducted.
However, the less transactional businesses of Consultancy and Property Management have performed well to date, with improved revenue and profitability over the year before mitigating the effect of reduced transactional activity.
Regionally, in Asia Pacific, there was reduced advisory activity in Greater China, Japan, Korea and Singapore, however, several of these countries have started to recover in the second quarter as they emerge from lockdown.
In North America, where the group is more dependent on leasing activity by corporate occupiers, Savills said it has been significantly hit by lockdowns in major cities such as New York, Chicago and San Francisco.
Savills's performance remained resilient in the UK, as less transactional businesses continued to trade well, while transactional activity started to recover amid an easing lockdown. Meanwhile, results in Continental Europe were buoyed by strong pipelines in Germany, Spain, the Netherlands and Belgium.
Looking ahead, Savills said its overall performance for the year is highly dependent on transactional markets, however, the wider context for real estate investment is largely positive with the expectation of low interest rates for longer and continued investor demand.
Despite this, the group said the Covid-19 outbreak means that the environment remains highly uncertain, and as a result cannot give any meaningful guidance for the year.
Savills will publish its interim results on August 6.
Shares in Savills were down 2.5% at 809.50 pence on Thursday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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