Savills Cambridge upbeat despite global struggles
Property powerhouse Savills says its Cambridge operation continues to defy broader market obstacles as it reveals its annual results.
While globally Savills has taken its share of a coronavirus hit, Rob Sadler – head of office for Savills Cambridge – is upbeat.
Addressing commercial property, he told Business Weekly: “The Cambridge office has remained resilient in the first half of 2020 and transacted some significant deals, despite the ongoing disruption due to Covid-19.
“Although a more subdued market during lockdown, commercial activity continued with the team letting more than 103,000 sq ft of office, lab and mid-tech industrial space, both in the city centre and on key business parks.
“In addition, the sale of a 22-acre industrial site in Sudbury has proven that appetite remains from buyers looking for attractive development opportunities within the region. Looking ahead, we are confident that we can further augment this success into the second half of the year.”
Ed Meyer, head of Cambridge residential for Savills, adds: “From a residential perspective in Cambridge, recent experiences understandably made buyers more cautious – with social distancing and self-isolation rules inhibiting the practicalities of buying and selling a house.
“But since restrictions were relaxed we have seen a large level of resolve return to both the city and country markets. The experience of working from home has made people more aware of the limitations of their existing properties, and increased space – both inside and out – has become an all-important driver of demand.”
As an international player across all elements of the property segment, Savills was subject to major cross-border headwinds in the half-year to June 30 so it was no surprise that group revenue was down £55.6 million to £791.4m. As a result, group profit before tax was down 69 per cent to £7.7m.
Group chief executive Mark Ridley said: “In the context of the significant impact of COVID-19 on global markets in the second quarter, Savills’ resilient interim results highlight the diversity and strength of our global business.
“During this period, our less transactional businesses have provided a solid platform for the group and our transactional business teams have partially mitigated the effect of significantly lower levels of trading activity by winning increased market share.
“Much of this is due to our strategy of remaining open for business throughout, retaining the strength of our teams and focusing resolutely on addressing both the pandemic-related, and longer term, needs of our clients.
“Looking forward, as a consequence of COVID-19 the economic environment remains highly uncertain, chiefly in respect of expected recovery trajectories across the world and the occurrence of second wave outbreaks causing further lockdowns.
“In addition, it is unclear how significantly the longer term economic impact of COVID-19 will weigh on corporate and investor sentiment. That said, the wider context for real estate investment is largely positive with the expectation of low interest rates for longer and continued, or enhanced, investor demand for income reflected in increased allocations to Real Asset backed strategies.
“In recent weeks we have seen signs of recovery in residential markets and a number of commercial transaction markets around the world. Clearly, our performance in the second half of 2020 will be highly dependent upon the extent to which such signs become a sustained recovery for the markets in which we operate.”