Strong London demand help drive Savills' UK revenue above £1 billion for first time

Strong demand for office space in central London and a resilient high end residential property market have helped drive higher profits at agents Savills.

The company’s revenue rose 7 per cent to £2.4 billion, while its underlying pre-tax profit was by 38 per cent to £130.4 million.

Revenue from the UK passed the £1 billion mark for the first time in the firm’s history despite activity volumes still not returning to pre-pandemic levels.

Chief executive Mark Ridley said rents in the City in particular were being driven by “very robust” demand for top quality Grade A office space while interest in the West End was also still strong. Prime rent in the City rose 7.5% last year.

Take-up in the London office market was 2% up year-on-year, and only 5% below the long-term average.

In the prime residential sector continuing international demand for properties “for living in London” helped keep pricing solid though average prices in Prime Central London fell 1.9% during the year.

In London the average lot size was down 7% to £2.06 million.

Stamp duty changes in April are likely to lead to “a muted market for a while” although a “significant reduction in volume” is not expected.

The group’s residential lettings saw revenues increasing 2%, driven by the Prime London market, which represents around 70% of the business.

The FTSE 250-listed company upped its dividend by 32 per cent to 30.2p.

The expected recovery in property markets last year was delayed by “macroeconomic and geopolitical events including the impact of elections in key markets, significant volatility in bond yields and, latterly, the interest rate expectation being 'higher for longer'”

Boss Mark Ridley said: “Savills improved performance in 2024 reflects the robust earnings provided by our less transactional businesses together with the effect of our inherent operating leverage in the early recovery of transactional markets.

“Most markets were in recovery as we entered 2025 and, whilst uncertainty continues, there remains the expectation of reductions in the cost of capital during the year.”

For 2025, he said the group expects "re-financing driven activity and the trend towards corporates requiring greater office attendance for staff to continue to be positive for transaction volumes".