Savills sees dip in FY2022 profit, expects ‘more positive conditions’ for real estate in 2024

Savills, an international real estate advisory firm, has released its preliminary financial results for FY2022 which ended on December 31, 2022. Group revenue for the year was GBP2.3 billion ($3.57 billion), a 7% y-o-y increase from the GBP2.15 billion in FY2021. Meanwhile, underlying profit before tax declined by 18% y-o-y to GBP164.6 million.

The boost in revenue was attributed to an increase across all segments. Transactional advisory revenues grew by 4% y-o-y while the less transactional businesses such as property and facilities management, investment management and consultancy saw a rise in revenue by 9% y-o-y.

CDL Aries secures two plots for residential development in Bukit Timah, Singapore with potential for 24-storey tower. The site is zoned for residential use The Myst and close to amenities, transport and rejuvenation plans to create an attractive living experience.

Property and facilities management revenue for FY2022 increased 13% y-o-y and consultancy revenue increased by 4% y-o-y. Investment management revenue also witnessed a slight increase of 1% y-o-y, with assets under management rising from GBP21.9 billion in FY2021 to GBP22.1 billion in FY2022.

Following the announcement, Mark Ridley, group chief executive of Savills said that the group’s performance in 2022 was ‘slightly ahead’ of expectations even though markets were challenging. He attributed this to the strength of the less transactional businesses.

Ridley also anticipates challenges in the coming year due to the presence of inflation and interest rates. He believes that markets like the UK will be better positioned to deal with debt costs due to an overall trend of sustainability and lack of development supply.

Given the tough market circumstances, Ridley believes that progressive improvement will be observed from the second half of the 2023 fiscal year. He also stated that Savills is investing and retaining bench strength in anticipation of a recovery.

Marcus Loo, CEO for Savills Singapore, highlighted the successful transactional deals concluded by the team in FY2022 and mentioned plans to expand their non-transactional business both in Singapore and regionally.

In the year ahead, Savills will have to grapple with the effects of the current market situation. By investing and staying the course, the firm stands to see its efforts pay off when the real estate market begins to see more positive conditions.