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LONDON (Alliance News) - Savills PLC Wednesday said that it had traded slightly ahead of its own expectations so far in 2015 and substantially ahead of the same months of 2014, although it is still only predicting it will meet its expectations for the year as a whole as the first four months typically make up just a small proportion of the full-year result.
In an update ahead of its Annual general Meeting, the real estate adviser said it has continued to maintain a significant share of the prime Central London investment and leasing markets and volumes are up compared with the first quarter of 2014. It is also continuing to see improved markets outside London and said rental growth has emerged across most sectors of the market.
It said it had seen reduced volumes as expected in the UK prime residential market ahead of last week's General Election, but said the result was positive for market sentiment although it's too soon to gauge how volumes will recover in the second half of the year.
Savills said the year has started more strongly than in 2014 in Hong Kong and China, although trading volumes remain well below 2013 levels. The company has expanded its South East Asian operations by taking a 45% stake in a commercial real estate services business in Malaysia, marking its entry into this market.
It said underlying revenue is up at the Studley business it bought in the US last May, and it has started expanding the Savills Studley platform with the recent acquisition of the Cooper Brady Partnership in Silicon Valley. It has also bought a small consultancy practice in New York and a corporate advisory business in Florida.
"We continue to see significant growth opportunities for Savills Studley in the US," Savills said.
The company added that it has traded slightly ahead of its own expectations in continental Europe so far in 2015, with Spain and Germany experiencing a particularly strong start to the year.
Savills said its global consultancy and property management business, which it bolstered last month with the acquisition of UK rural estate management firm Smith Gore, has delivered continued revenue growth, notably in the UK and Asia, while revenue and profit growth at its Cordea Savills investment management business has been in line with expectations after a strong year in 2014.
"In March, we announced the proposed acquisition of SEB Asset Management AG which will materially increase the size of our investment management business. Completion is subject to a number of approvals and commercial conditions, and is now anticipated to occur at or around the end of June," it said.
"While we have started the year well, typically the first four months represent a disproportionately small element of the expected outturn for the full year. We have continued to develop the business with selective acquisitions and recruitments in a number of our service lines and are focused on integrating these through the remainder of the year," the company said.
"Against a backdrop which remains broadly supportive of global property markets, we anticipate that our performance will continue to be in line with our expectations," it added.
Savills shares were up 1.3% at 911.00 pence Wednesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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