Savills confident despite risky macro backdrop

Real estate and property service provider Savills said in an update on Wednesday that its businesses were performing in line with expectations, although the war in Ukraine, inflation and a rising interest rate cycle had recently tempered transactional activity.

The FTSE 250 company said that was particularly evident in smaller lot sizes, both in terms of capital transactions and leasing take-up, with activity skewed towards larger transactions.

It said UK residential markets in the UK were performing well, although stock availability was still “significantly reduced” compared with a year ago.

Continued Covid-19 and travel restrictions, particularly in Hong Kong and mainland China, had reduced activity in both the leasing and capital transaction markets.

Subject to the exacerbation of current geopolitical risks and any potential further waves of Covid-related restrictions, Savills said it remained confident in its expectations for the full year.

“2022 has presented a number of heightened macro-economic, geopolitical, supply chain and, in some locations, continued Covid-related risks both to investors and corporates and to people's personal lives,” said chief executive officer Mark Ridley.

“I am delighted with the responses of our people and our clients specifically in respect of support for Ukraine, but also for their resilient approach to doing business in challenging circumstances.

“We have performed well so far this year and, with our strong balance sheet, we are continuing to undertake a variety of business development activities across the group to further enhance our service to clients worldwide.”

Savills said it would announce its results for the six months ending 30 June on 11 August.

At 1140 BST, shares in Savills were up 1.95% at 995.5p.

Reporting by Josh White at Sharecast.com.