Brexit sees Savills UK commercial revenues halve but shares edge up on international sales

Upmarket estate agent still faring better than peers Foxtons and Countrywide

Despite the losses, Savills has weathered the Brexit storm better than several other estate agents (Getty)

Savills’ profits slipped three per cent in the first half of the year, making the upmarket estate agent the latest in the industry to report declining profits.

The company’s UK commercial property arm was particularly hard hit with profits down 54 per cent in the first half of the year, buffeted by uncertainty in the run-up to the referendum and its immediate aftermath. Savills said many sovereign wealth funds stopped buying UK property, but claimed the market had now normalised.

Underlying profits at the firm rose 11.5 per cent to £42.8m in the period. Commercial property was one of the first sectors to be hit by Brexit turmoil as investors pulled billions from funds, forcing many to be closed. Savills’ shares edged up one per cent in morning trading on Tuesday.

Savills said it was not changing its full-year expectations but that “the range of potential outcomes has broadened over recent weeks”.

Jeremy Helsby, chief executive, said: “In the traditionally quieter summer period and so soon after the EU referendum result, it is not possible to obtain a clear read on the direction of activity.” The boss said, however, he was confident that “the fundamental attributes of real estate as an investment class remain strong”.

The company said it anticipated a period of “lower volumes which may present opportunities for investors into the UK”.

Further growth will be pursued in the US and globally, through “significant recruitment” and more acquisitions, Helsby said. “In addition, we continue to investigate selective development opportunities for our businesses worldwide.”

“Our substantial portfolio of less transactional businesses, significant overseas earnings and strong market shares in many of our most important transactional locations position the group well, not only to withstand short-term reductions in local activity, but also to capitalise on the opportunities which we expect to emerge,” Helsby said.

Savills, which makes about 60 per cent of its revenues outside of Britain, has weathered the Brexit storm with less damage than several other estate agents.

London-focused Foxtons reported profits down 42 per cent in July, while Countrywide profits also tumbled 25 per cent year on year. Both blamed the referendum vote as well as additional taxes on high-value homes and buy-to-let investments.

Additional reporting by Reuters