Savills Regulatory News (SVS)

18 November 2014

SAVILLS PLC

("Savills" or the "Group")

Trading Update

Savills plc, the international real estate advisor, publishes the following Trading Update for the period from 1 July 2014 to date.

Overview

Since June Savills has continued to perform well. The anticipated reduction in commercial trading volumes in Hong Kong has continued, but our strength in Japan and other Asia Pacific markets continues partially to mitigate the overall impact on the Group. The UK markets have continued to perform as anticipated with commercial and residential growth outside London largely balancing the impact of the expected moderating of the London residential market ahead of next year's General Election. Savills Studley in the US has performed ahead of our expectations since its acquisition on 30th May 2014 and our Investment Management and Continental European businesses have performed in line with our expectations.

Transactional Advice

Commercial

In the UK, investment activity has continued to show good momentum in the Central London market and the strong increase in transaction volumes outside London has been maintained. Occupier markets in the City have benefited from take up in the Professional Services, Insurance and TMT sectors and there has been a positive improvement in leasing activity in tier one cities outside London as anticipated.

The investment markets in Hong Kong have remained very subdued, in line with our expectations, but leasing and tenant representation volumes have remained relatively stable. Elsewhere in the Asia Pacific region, the transactional markets of Japan and Australia have been robust. Both businesses have shown substantial period-on-period revenue growth and we have increased market share. In Mainland China investment markets remain weak with volumes largely based on owner occupier transactions. In general, other regions have benefited from overseas diversification by Chinese and Hong Kong developers.

Our Continental European teams have increased transaction revenues year-on-year, particularly in Ireland, Germany, the Netherlands and Spain. In Germany and France, core investors are active, whilst Southern Europe, the Netherlands and Ireland have seen strong levels of demand from international private equity investors.

In the US Savills Studley is performing ahead of our expectations and both the US and other countries are benefiting from the combined Group's ability to assist occupier clients worldwide. In the investment markets, we have also seen the benefit of incoming investment activity with sizeable cross border transactions concluded on both seaboards.

Residential

Our UK Residential Agency business has continued to trade well since June, with a resilient performance from the prime London markets, which have moderated in recent weeks in line with our expectations. The General Election and the potential implementation of a "Mansion Tax" thereafter has had the expected subduing effect on buyers, albeit that we have seen registered buyers per listed property rise since the low point around the Scottish independence vote in the summer. The Country market has seen the rise in activity that we had anticipated and demand is focused clearly in the sub £2m market. Residential Development sales have continued to perform strongly.

In the Asia Pacific region, cumulative control measures over the last few years in certain markets, culminating in the imposition of substantial stamp duty charges on residential investors in Hong Kong and Singapore, continue to have a significant effect on residential sales volumes. In the prime market volume has remained relatively stable as developers adjust pricing to current market conditions.

Consultancy

Our Consultancy services business has continued to perform strongly, driven primarily by improved activity in Continental Europe and stronger development markets in the UK regions. In the UK, Valuation, Planning, and Development have all shown significant improvement as regional activity levels have accelerated. This bodes well for continued recovery in these markets.

Property Management

Our Property Management business has continued to perform well. UK Property Management has benefited from further Commercial contract wins and revenue growth in Residential Management (including lettings). In Mainland China and Hong Kong, where Property Management is a substantial proportion of our business, we have continued to see good growth in revenues. In Continental Europe, we have stabilised the business and begun to win new contracts in many countries.

Investment Management

Cordea Savills is performing in line with our expectations. The business has continued to make good progress during the period, with significant growth in committed fund inflows. Since 30th June, Assets Under Management (AUM) have risen by approximately 6% to €6.7bn. Our open ended funds continue to attract equity inflows and we anticipate having substantial investment capacity going into 2015.

Summary Outlook

Overall, we have had a robust period of trading and have benefited from the diversity of our service lines and regional locations, and our acquisition of Studley in the US.

Looking ahead, whilst we retain our cautious stance on the timing of recovery in Hong Kong and, as previously indicated, we expect the UK residential markets to remain somewhat subdued during the extended pre-election period, the strength of our enhanced US operations, our regional UK business and improvements in Europe and Japan, lead us to anticipate that our underlying result for the year will at least meet our previous expectations.

For further information, contact:

Savills 020 7409 8934

Jeremy Helsby, Group Chief Executive

Simon Shaw, Group Chief Financial Officer

Tulchan Communications 020 7353 4200

Peter Hewer

Forward looking statements

Certain information included within this statement is forward-looking and by its nature involve risks and uncertainties because it relates to events and depends on circumstances that will occur in future. 

Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions, market estimates, the Company's plans and objectives for future operations, including future revenues, financial plans and expected expenditures and divestments.

There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward looking statements including a number of factors outside the Company's control. All forward-looking statements in this statement are based upon information known to the Company on the date hereof. The Company gives no undertaking to update forward looking statements whether as a result of new information, future events or otherwise.