Overseas investors boost UK revenues at Savills
WEALTHY overseas investors buying up prime London homes have helped up-market property adviser Savills shrug off the malaise affecting much of the sector.
While the lack of mortgage lending remained a “significant obstacle” for the wider market, Savills said foreign investors increasingly saw central London as “a store of value in turbulent economic conditions”.
The strong market in London drove a 9% increase in revenue at the group’s UK residential transactions business, while profits rose 11% to �14.8 million.
Savills reported growing signs that homeowners in London, where prices have bucked the national declines in recent years, are now considering moving to the home counties where they will enjoy “purchasing power” in more depressed markets.
It benefited from the popularity of new upmarket projects such as One Hyde Park and said prime central London postcodes continue to be in strong demand at the start of 2012, with multiple cash buyers for each home. It expects this to continue unless there are changes to property tax.
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Savills’ UK commercial business saw profits fall 40% to �4.6 million despite growing its share of a declining market. And its continental European commercial business doubled its losses to �8.8 million as revenues fell amid the eurozone debt crisis.
However, overall revenues rose 7% to �721.5 million and pre-tax profits lifted 9% to �40 million, helped by 43% growth in profits in mainland China.
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Savills expects the central London commercial and residential markets to remain stable this year although it said it is too early to see a sustained recovery in Europe.
Mark Oliver, head of Savills’ Ipswich office, said: “Savills in Suffolk has transacted some significant residential deals in the past year including Sparrows Farm, Great Henny and Lodge Farm, Wetheringsett and looks forward to further opportunities in these areas in 2012.
“Following a strong second half of 2011 our rural agency and professional teams have started well this year with more land transactions expected in Suffolk than there have been in the last three to five years. Last year was a good year for our commercial team with strong transaction levels. 2012 also looks set to be a busy year.”