In an update issued to the City yesterday, Savills plc has reported that it is well ahead of its 2023 trading figures and its UK-based operations have performed particularly strongly.

It says it is ‘a good performance’ given the significant volatility in transactional market sentiment over the course of 2024, which is now recovering in most markets.

Recovery shallower than anticipated

The company notes, however, that the trajectory of that recovery was shallower than anticipated at the start of the year as a result of various macroeconomic and geopolitical events, including the impact of elections in key markets, significant volatility in bond yields and the expectation that interest rates would remain ‘higher for longer’.

Those same factors, Savills says, also took some of the urgency out of transactions for corporate occupiers.

With the exception of a subdued Chinese market, the company says its overseas businesses have performed well. But, supported by the resilience of its prime residential business, its core UK operations performed particularly strongly.

Savills Investment Management (“SIM”), which invests in real estate assets, traded broadly in line with expectations in a year that the company describes as ‘the nadir for core and core plus style investment managers,’ with prices correcting and bonds/fixed income providing more attractive short-term returns and pricing certainty.

Despite the conditions, SIM successfully raised c.£2bn and launched two new pooled fund products (one debt; one equity).

The Group’s strength across less transactional service lines reportedly continued to provide a resilient earnings stream, with the consultancy and property management businesses performing well in aggregate.

The challenging macro conditions are expected to continue for some time.”

Savills says of the year ahead: “The challenging macro conditions are expected to continue for some time; however, most markets are in recovery and as we enter 2025, whilst current financial markets are characterised by uncertainty, sentiment has turned to expectations of progressive reductions in the cost of capital being likely during the year.

“We expect re-financing driven activity, the sustainability agenda and the trend towards corporates requiring greater office attendance for staff, to continue to be positive for transaction volumes. These factors lead us to expect continued improvement through 2025”.

Savills is aiming to report its full 2024 results on 13 March 2025.