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Savills say UK "shows no sign of improvement" as shares plunge on trading update
Savills today warned that the housing downturn was spreading to many parts of Europe and Asia as the credit squeeze took its toll, with its UK business suffering "significant" falls.
The warning sent its shares plunging 29.75p to 185p on the news, a fall of nearly 14%.
In London, the number of residential transactions was down 45% on a year ago, with prices falling by 7.5% in central London in the first half of the year. Upmarket properties outside London were initially less affected but are now following suit. Only the very top end of the market — properties worth £5m and more — has proved relatively immune to the downturn, Savills said. It is cutting costs in an attempt to cope with the downturn in business.
The estate agent said: "Europe's major commercial property markets are increasingly feeling the impact of the global credit squeeze." Transactions have fallen "significantly" because companies find it hard to get debt finance from their banks and deals are taking longer to complete. The credit crunch and economic uncertainty are also starting to impact on Asia, in particular Australia and Japan. Hong Kong and Singapore have remained stable, with property transactions similar to last year's levels.
The UK financial services division has suffered a 40% fall in deals due to a lack of liquidity, tightening underwriting criteria and higher funding costs.
Savills said the outlook for its UK businesses "continues to depend on how quickly confidence returns to financial markets, which currently show no sign of improvement".
The warning sent its shares plunging 29.75p to 185p on the news, a fall of nearly 14%.
In London, the number of residential transactions was down 45% on a year ago, with prices falling by 7.5% in central London in the first half of the year. Upmarket properties outside London were initially less affected but are now following suit. Only the very top end of the market — properties worth £5m and more — has proved relatively immune to the downturn, Savills said. It is cutting costs in an attempt to cope with the downturn in business.
The estate agent said: "Europe's major commercial property markets are increasingly feeling the impact of the global credit squeeze." Transactions have fallen "significantly" because companies find it hard to get debt finance from their banks and deals are taking longer to complete. The credit crunch and economic uncertainty are also starting to impact on Asia, in particular Australia and Japan. Hong Kong and Singapore have remained stable, with property transactions similar to last year's levels.
The UK financial services division has suffered a 40% fall in deals due to a lack of liquidity, tightening underwriting criteria and higher funding costs.
Savills said the outlook for its UK businesses "continues to depend on how quickly confidence returns to financial markets, which currently show no sign of improvement".
Tue, 8th Jul 2008